Farmers affected by the poor weather and the squeeze by on farmgate prices, could face a huge drop in income this coming year, reports Farmers Weekly, quoting DEFRA research.
The figures make sobering reading and surely must be a catalyst for change – how can any business be expected to continue to produce at no profit? The wider public must surely look beyond cheap food, and supermarkets must look at a fairer profit distribution.
Commenting on the research, NFU chief economist Phil Bicknell, said:
“Wheat yield and quality were hit by the weather, while it’s been well documented that rising costs outstripped farmgate price changes for dairy and pork producers at times during the past year. More recently, we can add the plummeting lamb price to the list of challenges the industry faces.
“The weather caused chaos across the board and has laid bare the importance of CAP payments. With profits squeezed, a larger number of farmers will again be forced to rely on CAP’s direct payments to underpin their business in the year ahead.
“Falling farm income data shatters the myth that high commodity prices would mean high profits. Farmers cannot produce at little or no profit indefinitely; they need to turn a profit and they need to re-invest. The reality is that price volatility, low profitability and falling confidence does not provide a secure framework for a sustainable food industry. These figures should be a wake-up call for us all. Managing risk and volatility are key and that must be recognised by both the government in its CAP negotiations and in pricing decisions taken by the food chain.”
Farmers facing hardship may contact the Rural Stress Helpline or the The Royal Agricultural Benevolent Institution (RABI) who can offer advice and assistance.
The Farming Weekly article is here.