Secretary of State for Business Vince Cable was in the Borders at the weekend when farmers made clear their need for better support from banks.
Dr Cable and Borders MP Michael Moore visited sustainable arable farm Woodend, near Duns, on Saturday morning and later met local business people.
NFU Scotland vice president Rob Livesey said Dr Cable seemed to understand the issues farmers faced with banks and that he was keen to cut red tape.
He said: “A lot of the banking issues are not to do with mistakes or miscalculations on business performance, they’re weather-related which is completely outside the control of farmers.
He explained: “The additional costs of the last 12 months and lack of output are the problem. Prices have risen, but (because of the adverse effect of the weather) the amount of each item for selling – livestock, crops, milk – has not been sufficient and that’s made a huge difference to a lot of cash flow through businesses.
“I think he understood. He was encouraging us to look at some of the smaller banks because they can be less risk averse.”
The meeting came after NFU Scotland revealed the results of its weather aid survey last week which found 84 per cent of farmers who replied expected lower sales and output this year and almost half anticipated having to ask for additional finance as the year progresses.
More than 400 producers took part, with two thirds saying they had asked for extensions to their bank loans. One in 10 had been refused an extension on their overdraft.
Union president, Stow livestock farmer Nigel Miller said: “The level of pressure heaped on many farm businesses by the weather of 2012 and the spring of 2013 is extreme.
“It is clear the area of winter crop ploughed in is significant and much of the remaining oil seed rape acreage is compromised at best. Extra feed is still being required on livestock farms and costs will continue to mount over the May period.
“The response on some farms has been the forced sale of livestock earlier than planned to buffer cash flows with others postponing intended investments. That has implications for the industry beyond the farmgate.
“The banks have the ability to provide a bridge out of these difficult times. Without the option to extend credit, there is a danger that viable businesses will be damaged or lost.”
Other issues raised with Dr Cable were red tape and planning regulations.
Mr Moore said: “It was a good opportunity for Dr Cable to hear from successful local businessmen and women about their concerns on bank lending and red tape and the work they are doing to grow and develop their businesses.”