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Weaker pound a 'double-edged sword' despite boost in farm income figures
Despite positive signs of increases in income, productivity and commodity prices for British farmers, experts have warned the sector is still a way off seeing levels to sustain a long-term and profitable farming industry.
Lauren Dean
This was the message from NFU economist Anand Dossa on the back of the latest annual Defra farm statistics report, Agriculture in the UK.
While the department said the sector had seen a significant rise in 2017 farm income figures, taking the latest total income from farming up 41 per cent to £5.7 billion, Mr Dossa said it must be remembered the jump came from a low base.
He said: “It is important to remember this rise comes after three years of falling profits and margins, and increased price volatility for many across the industry.”
According to Mr Dossa, short-term shifts in exchange rates have been driving some upward movements in commodity prices and providing ‘much needed support’ to agricultural exports.
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The recent poor weather has prompted a spike in demand for straw, pushing up the price of both wheat and barley straw to record levels, he added.
In March 2018, the average barley straw price in England and Wales was £93/tonne, up 69 per cent on the year, while wheat straw was £83/t, up 66 per cent.
“However, a weaker pound is a double-edged sword for farming,” Mr Dossa said.
“The recent weather events combined with the weakness of the pound has led to increases in key farming costs across the board.
“Despite the tentative signs of recovery in profitability, I believe the sector is still far from seeing levels which will sustain a long-term and profitable farming industry.”
The Defra figures suggested the value of several commodities had been bumped up last year due to the exchange rate, increased global stocks and ‘generally favourable weather’.
It includes milk and milk products increasing 32 per cent to £4.34 billion and wheat hitting almost £2bn following a 23 per cent leap.
A Defra spokesman said an Agriculture Bill will be brought forward later this year, ‘rewarding farmers for their work to protect and enhance the environment.”
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