NFU membership fees face rise to fill budget gap
© Tim Scrivener A 7% rise in subscription fees could be on the cards for NFU members to counter a predicted £6.5m shortfall in its finances by 2027.
Minutes from an NFU council meeting show that the union had racked up losses of nearly £1m in 2021 alone.
If no changes are made to its current position, a budget gap of £6.5m is expected within five years.
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Consequently, the NFU governance board has decided to “cut costs, increase income and allow the balance sheet to take the strain” and is making a “clear recommendation” for an inflationary increase in membership subscriptions.
In the year to 31 October 2021, the NFU had 77,186 farming and non-farming members, down 576 on the previous 12 months.
Retention ‘strong’
Kevin Pearce, the NFU’s director of membership and regions, has admitted that recruitment is a challenge, although retention is said to remain very strong.
If recruitment did not improve, the NFU would finish the year with fewer members than the previous 12 months, he warned.
The governance board is thought to be seeking an increase of around 7% in the membership fee, with a firm proposal expected this month.
Mr Pearce has calculated that at that level the subscription fee would increase by £28.50.
There are 25 categories in the membership structure. Suggestions put forward to raise income include increases in the basic subs and the basic subs plus production units.
The deficit is anticipated despite the NFU making considerable savings during the pandemic when it did not need to meet the cost of meetings or travel expenses.
Those savings had reduced what was a “clear budget deficit” over the past two years and moved the NFU back to a break-even position, although nearly £1m had been lost in 2021.
The council minutes set out how the NFU now wanted to “pull all its levers”, but with members picking up some of the costs.
Trade body challenges
It is understood that the NFU is not the only trade body applying inflationary increases, or upping fees at a lower level.
The NFU had a net gain of 15,300 acres within its membership, but John Charles-Jones, council representative for Nottinghamshire, says that the current membership system is not fit for purpose.
There were 150 fewer paid members in April 2022 than at the same time in 2021.
The NFU had collected payment on 50,000 fewer acres than in 2021, but NFU membership had grown by 55,000 acres in 2021.
“There had been a plus net gain of 15,300 acres from new members, and there had been 40,600 acres from amended acreages during the last year,” according to the minutes.
“However, legal board had seen a significant number of acreage discrepancies.”
Rising costs and inflationary pressures to blame for budget shortfall
The NFU says it is not alone in facing a shortfall in its budget, adding that many businesses and membership organisations were facing similar deficits due to the cost-of-living crisis.
Rising costs and high levels of inflation have been attributed to the gap in its budget, which it will attempt to plug in the coming years.
NFU director of finance and business services Ken Sutherland said: “Like every other business, whether it is a membership organisation, commercial company or media outlet, costs are increasing and the NFU is not unique in feeling this inflationary pressure.”
The NFU says all responsible businesses will be looking to ensure they have adequate forecasting and a robust financial plan. As such, it is committed to future-proofing itself while ensuring it can still offer “a first-class service to its members, at as low a cost as possible”.
Mr Sutherland added: “The NFU already has a number of income streams from non-subscription income and we have a plan to significantly increase the income from these subsidiaries.
“As a result of that, as part of our annual subscription rates review, we anticipate that any subs increase will be below the rate of inflation.”
Further details on this year’s subscription rates will be agreed by NFU Council members in due course and will be communicated to the wider membership in the coming months.