The latest confidence survey from the NFU has shown spiralling costs of production and the phasing out of support payments has led to the lowest business confidence in farmers since before the pandemic.
The survey showed that 88% of respondents are being negatively affected by input costs such as energy, fuel and fertiliser, and 82% said the current farming support payments being phased out is having an impact. This can be seen across the horticulture, livestock and poultry sectors and reflects supply issues seen on supermarket shelves.
Despite this, British farmers’ intention to invest in renewable energy generation and energy efficiency has increased rapidly. This demonstrates a real ambition to future proof farm business resilience and reach British farming’s net zero by 2040 target, as well as the importance of energy security to the nation’s food security. But investment to increase climate-friendly farming capabilities is being hindered by low levels of short and medium term business confidence.
NFU President Minette Batters said: “It is shocking but not surprising that our farmer confidence survey is reporting the lowest levels in three years. During this time, we have experienced a global pandemic, a war in Europe, tumultuous political change and extreme weather. If this lack of confidence and uncertainty is allowed to continue during such challenging times, it has the potential to lead to further shortages on supermarket shelves.
“We know from experience that low confidence indicates that farmers don’t have the means to invest in their food producing businesses, which could result in little to no growth in our domestic food security at a time when we need it most. It is also at odds with the government’s own plans for growth, and the commitments made by Prime Minister Rishi Sunak last year to support British farming by setting a target for the nation’s food security, with a statutory duty to report on domestic food levels.
“As well as food security, energy security is crucial to our nation, and currently 38% of British farmers are using or producing renewable energy. As an industry we have a huge ambition to increase this but confidence in the future is deterring farmers from making this important investment.
“Farmers need to know that government is supporting them through policies that build profitability and resilience into farm businesses to allow us to unlock a thriving food and farming industry. For this we need to see clarity on future farming support policies, including the Environmental Land Management schemes, which will help farmers plan ahead and build financial resilience into their businesses.”