A significant drop in commodity prices is a majorfactor contributing to falling farm incomes, the NFU said this week.
Data from Defra, which focuses on incomefrom March 2014 to February 2015, shows a decline in the profitability ofalmost all farming sectors and emphasises the volatility challenges for farmbusinesses, says the organisation.
Crucially, the NFU points out that these figuresonly paint part of the picture. They do not reflect the more recentshifts in commodity prices which have hit our members hard since February, aspressure on farmgate prices intensified through 2015. This has been seenmost notably in the dramatic downturn in the fortune of the UKs dairyindustry.
NFU Deputy President Minette Batters said: Whilethe short term focus is on income and cash flow, Government must prioritiseworking with the NFU and its partners throughout the food chain ensuring thatwe a achieve a better functioning supply chain, only then will farmers have theconfidence to invest in the future and build resilience.
The opportunities for UK farming are clear inthe longer term global and domestic demand will increase. But for Britishfarmers to benefit, we need the right policy and fiscal environment acrossgovernment which encourages the sector to increase efficiency, develop andembrace technological advances, and take a long-term balanced view toinvestment.
It’s critical that others in the food chain nowrecognise the financial pressures that farmers, as suppliers of raw materials,are facing. There are some positive initiatives out there. More widely thesupply chain can help by working to put in place the mechanisms that helpfarmers manage volatility.
During these challenging times, it is crucial thatthere are no delays to CAP payments, which would only compound cash flowconcerns. This includes ensuring BPS is paid in a timely manner early in thepayment window and also making pillar 2 payments as early as possible. The NFUis disappointed that the options of paying enhanced rates for the initialpillar 2 agri-environment payment this autumn or allowing up to 70% of the BPSpayment to be made from 16 October, as allowed by the European Commission, werenot implemented.