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LAMMA 2021
25 May 2021
Falling farm support, Brexit rules and Covid-19 hit business confidence
Phasing out of Basic Payment Scheme (BPS) payments, rule changes due to Brexit and the impact of the pandemic have delivered a blow to farm businesses confidence, with short- and mid-term confidence remaining negative for the third year in a row.
Olivia Midgley
The NFU’s latest Confidence Survey highlights cashflow as a significant concern, with 78 per cent fearing the reduction in farm payments will negatively affect their business at a time when some input costs are rising
.
NFU president Minette Batters said confidence was critical for all businesses as it influenced production, investment and growth intentions.
She said: “The fact that both short- and mid-term confidence has remained negative since 2018 is very telling of the uncertainty and challenges farmers continue to face.
“Farming is a long-term business. Confidence in our businesses is absolutely crucial if we are to continue to be productive and profitable and the driving force behind sustainable, climate-friendly food production around the world.
“It is not surprising that the phasing out of BPS is the top concern among our membership. Some farmers are already seeing payment rates being reduced, without any new schemes to replace this income and a lack of detail about the interim and future schemes.
"Not knowing what kind of standards will be involved in these future schemes makes it very difficult for farm businesses to plan for the future.”
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The survey comes just weeks after the union launched its ’Levelling up rural Britain’ report, calling for more Government investment to bridge the rural and urban divide in key areas such as access to broadband and improved connectivity, addressing the blight of rural crime and implementing planning policy reform.
Ms Batters added: “Farmers need to know the Government is supporting them and investing in rural Britain.
“Investment in these areas will help build confidence and provide more opportunities for farm businesses, enabling them to deliver even more for the country, from producing more quality, sustainable and affordable food to contributing to the Government’s green growth ambition.”
Key issues facing businesses
- 44 per cent of farmers and growers have been impacted by the pandemic, with the figure jumping to 73 per cent for horticulture businesses.
- Input prices e.g. fuel, fertiliser, energy (59 per cent believe this will negatively impact them)
- Regulation and legislation (53 per cent believe this will negatively impact them)
- Farm gate prices (45 per cent believe this will negatively impact them)
- Market or supply chain they sell into (40 per cent believe this will negatively impact them)
- Common impacts of the Coronavirus pandemic include:
- Reduced output prices
- Disruption to markets/customers
- Impact on diversified enterprises
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