By Tim Findlay
As international trade is turned on its head in Donald Trump’s unnecessary global trade war, American farmers have been hitting social media to air their frustration over the lack of demand for their commodities.
But behind the headlines about exports and prices lies another pressure point: the cost of borrowing. Access to affordable finance is often the difference between expanding, consolidating, or exiting the industry.
A look across the world’s major farming economies shows just how uneven the playing field has become—not just in interest rates, but in how much debt farmers are carrying.
United States
In mid-2025, commercial farm real-estate loans in the U.S. average around 7.4 per cent, with operating loans at similar levels. USDA’s Farm Service Agency offers concessional loans at 4.875 per cent to 5.875 per cent, and emergency loans at 3.75 per cent.
Aggregate U.S. farm sector debt is forecast at US$591.8 billion in 2025, up about 5 per cent year over year, with $386.4 billion in real estate debt and $205.4 billion non-real estate debt. (Economic Research Service)
Canada
Farm loans track Canada’s Prime rate (~4.7 per cent) plus margins, giving effective borrowing costs around 5.8-7.8 per cent. Canadian farmers held about C$146 billion in outstanding farm debt as of end-2023.
Europe and the UK
In the euro area, average new loans to non-financial corporates are about 3.4 per cent, but farm-specific rates vary greatly by country depending on national schemes and collateral. In the UK, with the official base rate of 4.0 per cent, farm loans often run between 5.5 per cent and 7.5 per cent depending on risk & term.
New Zealand
Since its OCR (Official Cash Rate) was cut to 3.00 per cent in August 2025, agricultural lending has followed, with typical farm loan rates in the 6.0-8.0 per cent range. Sector risk (e.g. dairy vs horticulture) influences margins significantly.
Brazil & India
Brazil’s commercial loans tied to the Selic rate (currently 15 per cent) are very high, but under Plano Safra many farmers can borrow at heavily subsidised rates—sometimes as low as 0.5 per cent for family farming; larger operations pay between 8.0 per cent and 9 per cent.
In India, the Kisan Credit Card scheme offers credit at 7 per cent, though prompt repayment incentives drop effective cost to around 4 per cent for many.
China
Policy lending is strong. The 1-year Loan Prime Rate is 3.0 per cent, and agriculture/SME relending facilities can go as low as 1.5 per cent, with inclusive rural loan averages around 4.9 per cent. Heavy state support keeps many borrowing costs well under global averages.
Australia
Aggregate lending to the Australian farm sector has been rising: the total value of loans outstanding rose from A$123.6 billion at 30 June 2023 to A$131.4 billion at 30 June 2024, a real-terms increase of approximately 6 per cent. (Dept of Ag, Fisheries & Forestry) Australian agribusinesses typically face between 6.0 per cent and 8 per cent for commercial loans—placing them squarely in the middle of the global pack.
While concessional credit via the Regional Investment Corporation (RIC) at 5.18 per cent provides some relief, Australian farmers are still paying more than their peers in Asia and Europe, and only marginally less than North America. The gap is a reminder that, in an increasingly competitive world, cost of capital can be just as important as commodity prices.
What It Means for Farmers
Farmers in India, China, and parts of Europe enjoy effective borrowing costs closer to 3-5 per cent, while producers in North America, the UK, and Australia face rates nearly double that.
Combined with high aggregate debt burdens—US$500-600B in the U.S., CA$146B in Canada, A$130B+ in Australia—the pressure is real. For Australian farm businesses especially, paying in the middle of the global spectrum still means carrying high debt service costs that can squeeze margins and limit investment.
👉 If you believe your rates are higher than they should be, contact Cato Advisory. We specialise in debt advisory for rural businesses and can help restructure your finance to secure more competitive outcomes.
