‘Halt BPS cuts’ says NFU as farmer confidence plummets

The NFU is urging Defra to call a halt to the phase-out of the Basic Payment Scheme (BPS) in England for 2024 in the wake of an ongoing crisis of confidence in the farming sector.

Latest results from the NFU’s annual survey show that farmer confidence has sunk to an all-time low, with extreme weather and the phase-out of farm support taking their toll across all farm types.

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

Both short-term (one year) and medium-term (three years) confidence are the lowest they have been since the NFU first conducted the survey in 2010, with the arable, mixed farming and livestock sectors at the lowest ebb.

NFU president Tom Bradshaw told a media briefing on Friday (3 May) that this lack of confidence was undermining a willingness to invest, and that in turn was damaging food security.

“We’ve got huge volatility in the input market, we’ve seen the global commodity markets soften dramatically, we’re seeing BPS phased out, then we’ve got the longer term impact of climate change, the geopolitical situation, and an immigration policy that isn’t fit for the food and farming industry.”

Combined with increased working capital requirements, interest rate rises, and an unacceptable risk burden in the food chain, this all added up to a “crisis of confidence” among farmers.

As such, the NFU believed there was a strong case for Defra to halt this year’s planned cut in BPS for farmers in England.

“We know this is not a topic that they are inclined to look at, but farmers need cashflow within their businesses to weather this impending storm,” said Mr Bradshaw.

Survey

According to the NFU survey, 82% of those asked said that extreme weather had had a “fairly negative”  or “very negative” impact on their businesses in 2023.

“That survey was undertaken in November and December 2023, since when famers have been battling relentless heavy rain through January, February, March and much of April,” said an NFU statement.

“Were the survey undertaken again today, the results would be even worse”.

Asked what else was worrying them about the year ahead, the greatest concern was the phasing out of BPS (in England), with 86% saying it would have a negative effect on their businesses.

According to NFU senior economist Sanjay Dhanda, this has now overtaken rising input costs as the number one concern, though increasing levels of regulation is also a major worry.

Profit squeeze

Combined with fears about inadequate output prices, it was not surprising to find farm profitability being squeezed, and food production shrinking.

According to the data, 49% of those surveyed said their profits had declined in 2023, while 16% said they had made a loss and may not survive.

All farm types indicated that production would fall over the next 12 months, especially arable and mixed farmers, whose planting plans have been severely affected by persistent flooding.

Asked what actions might encourage them to invest over the next three years, the most important factors cited were government protection from sub-standard imports and better output prices from buyers.