| News
Staggering fall in farm incomes reflects reality of
tough trading environment, says NFU
The profitability of UK farming fell by a staggering 29% in 2015, a loss of over
£1.5 billion. This is the biggest year on year fall since the millennium and
latest official statistics shows that farming profitability is at its lowest level
since 2007, highlighting the cash flow crisis facing the agricultural industry.
cocktail of higher production
around the world, subdued
demand due to slowing
economies, the strength of
sterling in 2015 and over 24
months of falling farmgate
prices across the sectors has led to
plummeting profitability.
For many, the cash flow impact has been
exacerbated by the delayed delivery of BPS
payments, with farmers still waiting to receive
their advance payment. This must be resolved
as soon as possible.
NFU chief economist and international affairs
adviser Gail Soutar said: “These figures are
alarming to say the least. They remind us that
farmers up and down the country and across
the majority of sectors are dealing with the
impact of devastating cuts in the value of their
products. Lots of farm businesses find
themselves in a loss-making situation. If prices
and profitability don’t change, it is not just
those farms that are at jeopardy, but our food
processing sector, our rural communities and
the environment.
“The numbers must serve as a wakeup call
A
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to others in the supply chain and government.
We need everyone in the food supply chain to
intensify their efforts to back British farmers. For
example we need longer term relationships that
deliver some certainty on pricing and give
farmers the confidence that food production
can be profitable. And we need government to
do all it can including making sure that farmers
don’t face the same crippling delays to farm
payments that they have in 2015, with
immediate action for those still waiting for 2015
payments to arrive.
“The latest NFU farmer confidence survey of
its members has r ecently also confirmed that
both short and medium-term confidence has
fallen to the lowest level since this 6 monthly
survey began in 2010.
“Profitability and industry confidence are
closely related. That confidence also impacts
investment levels in the agri-food supply chain,
and indirectly on jobs and economic growth.
The effects of the downturn in farming
profitability are not just confined to the sector
itself but will also have a knock-on impact on
the wider economy and rural communities .”
May 2016 | Farming Monthly | 07