Farmer confidence falls ahead of Brexit uncertainty

The NFU survey shows an 18-point drop in mid-term confidence in the last two years. It says the political environment since the UK voted to leave the EU is a key driver for this fall.

By the time this issue of The Farmer hits the doorsteps a newly elected government should be in office and it is essential that farming and food production are made top priorities in future policy making and Brexit negotiations.

The NFU President Meurig Raymond said it is unnerving to see the three year outlook drop as it has in the past been fairly resilient and optimistic.

He said: “Farmer confidence is absolutely critical to the future of a profitable and productive food and farming sector. In such a period of uncertainty politically, we need politicians to fully understand the impact this lack of clarity is having economically.

“The outlook from farmers is positive for the next 12 months due to the weak sterling, but we all know farming businesses are long-term and cannot rely on currency fluctuations.

"The Government elected will need to take firm action to maximize on the future potential of British food and farming. We need a competent and reliable workforce, a fit for purpose domestic agricultural policy and the right trade deals. And to address this debilitating uncertainty, they need to give the industry as many assurances as possible.”

Investment intentions - which are also a good and early indicator of profitability, production and how progressive farmers can be – showed farmers were nearly twice as likely to be decreasing investment (20.1 per cent) as a result of the EU referendum than increasing investment (10.7 per cent) in the next 12 months.

“Investment in farming businesses is integral to our ability to produce food efficiently and sustainably, ensuring food security and farming’s huge contribution to the health and wealth of the nation," Mr Raymond said.

“With just 10 per cent willing to increase investment in their business, it does not paint a pretty picture for the progressive industry that we are striving to be. But this is exactly why we’ll be working closely with the newly elected team at Defra, to ensure that investment is a key part of a new domestic agricultural policy”.

In the meantime a recent study by the University of Kent has revealed that the complete abolition of CAP payments without replacement measures could result in around 250,000 non-farming jobs being lost across the UK.

The study, called Employment effects of CAP payments in the UK non-farm economy, found a net positive effect of the CAP payments on non-farm employment, and in particular a strong positive relationship between direct payments and non-farm employment compared with Rural Development payments.

The academics behind the study concluded that the removal of CAP payments would also be likely to have rural development implications beyond employment losses, such as increasing rural depopulation - particularly in terms of young people seeking jobs outside farming - and reduced business efficiency due to reductions in the scale of operations for some small and medium sized enterprises.