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GYS 2018: Survey reveals short term confidence but long term Brexit worries for farm businesses

Farmers and those within the wider food and drink supply chain feel positive about their business prospects in the short term, but this confidence drops when looking ahead to Brexit.


Olivia   Midgley

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Olivia   Midgley
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With just eight months to go before Britain leaves the EU, a survey of farm and agri-food businesses in Yorkshire found 71 per cent of farmer respondents and 82 per cent of food, drink and wider supply chain companies were very or fairly positive about their business prospects.

 

This plummeted to 37 per cent and 51 per cent respectively once outside the EU.

 

The results were revealed on the first day of the Great Yorkshire Show (July 10) in Harrogate and highlighted the feeling of uncertainty weighing on many.

 

Forty-nine per cent of farmers said their most pressing issues related to uncertainty and volatility in terms of business costs and farmgate prices.

 

Other key issues included future trade regime (8 per cent); labour supply and retention (8 per cent) and cashflow and profitability (8 per cent).


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More positively, some businesses had already taken steps to make themselves more resilient ahead of Brexit.

 

Thirty-nine per cent of farmers have worked to reduce costs or debt, 23 per cent have diversified their business and 17 per cent have changed their farming practices in some way.

 

More than a third of wider supply chain businesses (37 per cent) have made changes with the most common response (31 per cent) being an investment in automation or other business efficiency.

 

Adam Bedford, NFU North East regional director, said: “It is great news for Yorkshire that current business confidence is so high and it is perhaps not surprising, given the uncertainty surrounding Brexit, that confidence takes a knock as things progress.

 

"But we are very concerned that beyond next year the number of farmers with a positive outlook almost halves and the number of companies feeling optimistic drops by more than a third.

 

“It is encouraging to see a proportion of our farming and agri-food businesses taking steps to make themselves more resilient in the face of change.

 

“But the point was made by most that continued uncertainty is a real stumbling block to effective decision making.”

More about the 2018 NFU North East Business Confidence Survey

  • For companies, the top two issues were skills/labour availability – cited by 31 per cent, and consumer confidence or falling demand – cited by 18 who questioned whether people may be less willing to spend post Brexit.
  • Uncertainty over what a domestic agriculture policy will look like was reflected with 11 per cent citing uncertainty over future support as a pressing concern.
  • 23 per cent have changed their recruitment policy or workforce requirements and 14 per cent have invested in expansion. Other changes introduced included sourcing local/UK suppliers (14 per cent) and changing marketing strategies (14 per cent).
  • Thinking about what could be done to support business prospects as we leave the EU, the majority of both farmer respondents (44 per cent) and wider supply chain companies (33 per cent) said a focus on financial incentives such as productivity grants was the most likely to have a positive impact on business confidence going forward.
  • However the need to spend more on R&D was also highlighted by 16 per cent of farmers and 18 per cent of companies – with a further 22 per cent of companies wanting to see further skill development within the local workforce.

The 2018 NFU North East Business Confidence Survey was released as part of the NFU North East’s Pride and Provenance campaign, which aims to emphasise the contribution it makes to the regional economy. The campaign represents 83 companies collectively turning over £3 billion and employ 25,000 people.

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