A new survey has revealed regulation, high input costs andthe impact of CAP reform top the list of things farmers believe will havenegative impacts on their businesses this year.
The annual NFU farmer confidence survey reveals that despiteconfidence being up on 2012 overall, 74 per cent thought regulation andlegislation would most likely have a negative impact on their businesses, withinput prices and CAP at 68 per cent and 50 per cent respectively.
NFU chief economist Phil Bicknell said: Farmers are feelingmore positive about the future after the horrendous conditions of 2012.However, looking down the track, farmers can see that there are clear issuesthat will harm their productivity and impact on their business.
74 per cent of those questioned put regulation at the top ofthe list. To me, that is a clear message that government must to do all that itcan to ease regulatory pressure. A lot of frustration remains in this area withfarmers reporting little perceptible difference of burden on the ground,despite initiatives like Red Tape Challenge and the Farming Regulation TaskForce. For these initiatives to be credible, we need to start seeing positiveoutcomes and farmers benefiting from the changes. While in Europe, policieslike the neonicotinoid restrictions have been pushed through without agreementfrom all member states, and could have significant impact on arable farmers inthe coming years.
Input costs have consistently featured second on the listover recent years as Defra figures show that farmings total cost base has goneup by 21 per cent since 2010. Fertilizers and feed are up by 22 per cent and 44per cent respectively, with added volatility also creating challenges.
And this year, CAP reform is added to the top three factorslikely to have a negative impact for agricultural businesses. With CAP moving higherup the issues rankings, this is a strong signal of farmers pessimism over thenew CAP. Budget cuts, the uncertainty surrounding new agri-environmentschemes and the commercial impact of the new mandatory ‘greening’ rules havealready negatively influenced farmers perception of the new legal frameworkmore than a year ahead of its implementation.
Confidence is critical because it influences investment andproduction intentions. Overall, it seems that the improved weather conditionshad a positive impact on short-term confidence. This is clearly good news, butwe need to be looking to the long term if were going to meet the foodproduction challenges that lie ahead. If we want our farms to compete in anincreasingly global market place and make the most of emerging exportopportunities, we need government action that addresses uncertainty,incentivises consistent investment patterns and produces action rather thanrhetoric when it comes to reducing red tape.