Farm profitability at lowest level for eight years

Devastating cuts to commodity prices over the last year have cost the farming industry more than £1.5bn in 12 months, according to new government figures.

Total profitability of UK farming dropped by 29 per cent in 2015 - the biggest year-on-year fall since the start of the millennium - and putting farming profitability at its lowest level since 2007.

Gail Soutar, chief economist at the National Farmers’ Union, said the figures are “alarming to say the least”.

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“They remind us that farmers up and down the country and across the majority of sectors are dealing with the impact of devastating cuts in the value of their products,” she said.

“Lots of farm businesses find themselves in a loss-making situation. If prices and profitability don’t change, it is not just those farms that are at jeopardy, but our food processing sector, our rural communities and the environment.”

The NFU blamed a “cocktail” of higher production around the world, subdued demand due to slowing economies, the strength of sterling, combined with more than 24 months of falling farm gate prices for agriculture’s plummeting profitability.

Ms Soutar added: “The numbers must serve as a wake-up call to others in the supply chain and government. We need everyone in the food supply chain to intensify their efforts to back British farmers.

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“For example we need longer term relationships that deliver some certainty on pricing and give farmers the confidence that food production can be profitable.

“And we need government to do all it can including making sure that farmers don’t face the same crippling delays to farm payments that they have in 2015.”