FW Survey 2024: Politics and weather weigh heavy on the sector

That UK farming confidence has taken a battering is hardly a secret, but the extent of that decline is quite startling, as evidenced by the results of our annual Sentiment Survey.

Harvested from some 767 respondents – the most we have ever had – it shows a sharp fall in the proportion of farmers who claim to have had a “good” or “great” year, and a corresponding spike in those who described 2024 as “bad” or “terrible”.

See also: Extreme weather and high input costs take toll on farming

Indeed, only 13% seemed to be satisfied with the way things have turned out over the past year, while 37% said their businesses had suffered.

It is a complete reversal of the situation seen two years ago, when global commodity markets boomed in the wake of the Russian invasion of Ukraine and the effect on input costs had not yet filtered through.

Key drivers

As for what has been driving the 2024 reversal of fortunes – well, it’s all about the weather and politics.

Last year was not so good, weatherwise, either, with 31% of respondents citing “extreme weather” as the greatest challenge they had faced in 2023.

As well as enduring the wettest October of the 21st century and the sixth-wettest March ever, farmers also had to contend with the driest February in 30 years and the hottest June on record.

Few believed 2024 could be as bad, so when we asked a year ago what was likely to be the number one challenge in the year ahead, just 18% said “extreme weather”, several points behind “government policy” and “output markets”.

But climate change has done it again, with incessant rain, widespread flooding and repeated storm damage seemingly the “new norm”.

Consequently, some 40% of this year’s Sentiment Survey respondents put extreme weather as the top challenge again.

Government policy is right up there too – with 20% of farmers singling that out, compared with just 8% who gave this answer in 2023.

Uncertainty over the transition to the new post-Brexit policies has come to the fore for many, while the chancellor’s Autumn Budget also had a major impact, with farmers furious that Labour’s pre-election promises have seemingly been forgotten.

Differences

Of course there are sectoral and regional differences to be seen, both in terms of business performance and identified challenges.

While overall, farmers are taking a more negative view of the financial environment in 2024, more pig and poultry producers have reported a better year than other sectors.

Egg and broiler producers have seen better margins, while stable prices in the pig sector for most of the year have coincided with reduced feed costs.

The most negativity, however, has been in the arable sector, with 46% of cereal growers saying they have had a bad or terrible year, rising to 54% for those who also cultivate oilseed rape as part of the rotation.

Conversely, beef and sheep producers are more inclined to say they’ve had a “so-so” year, especially in Scotland and Wales, where more farmers will have benefited from this year’s buoyant livestock trade.

The reasons for the more downbeat view from crop farmers are not hard to fathom, either.

In response to the question “What has been your greatest challenge in 2024?”, about 50% of cereal, oilseed rape and pulse growers cited extreme weather ahead of anything else.

There is no doubt that the main cereal growing parts of the country have been exceptionally hard hit by repeated storms and flooding – with crop establishment especially difficult in the spring and autumn.

The slow rollout of the Defra’s Farming Recovery Fund in England – promised in April, but not reaching bank accounts until November – will also have influenced perceptions.

Significant uptake of agri-environment schemes

With cuts to the Basic Payment Scheme (BPS) either well under way or about to come into play across the UK, the numbers of farmers who have joined an agri-environment scheme has almost doubled in the past 12 months, with 46% of respondents saying they are now signed up.

Correspondingly, there has been a significant drop in the number who say they “plan to” join a scheme in future – presumably because they already have.

Not surprisingly, there is a massive regional difference, with just 11% of respondents in Wales saying they have joined a scheme, and only 3% in Scotland.

That compares with 56%-58% in the Midlands, the South-East and East Anglia, and reflects the much slower rollout of post-Brexit policies in Wales and Scotland compared with England.

Livestock producers have also lagged behind arable farmers in the uptake of agri-environment schemes across the UK, with just 41% of sheep producers signing up.

In contrast, farmers growing cereals, oilseeds and pulses have found it easier to access schemes – the latter group recording a 68% uptake.

This confirms the suspicion that upland farmers are currently poorly served by the options available under the Sustainable Farming Incentive in England, while the new Countryside Stewardship Higher Tier scheme has been subject to delay after delay.

Despite the growing interest in agri-environment schemes, a significant 25% still say they have no plans to join one, either because it does not stack up financially, or because it looks too complex – a view expressed by smaller farmers in particular.

It will be interesting to see how this proportion changes as cuts to BPS start to bite in the devolved nations in the coming years.