Overall farmer confidence has risen by 12 points in a tracker that scores industry positivity according to responses to the National Farmers’ Union’s (NFU) annual survey.
Both dairy and livestock farmers report increased confidence, by 28 and 15 points respectively, fuelled by the falling value of the pound against the euro, increased commodity prices and more competitive export returns.
Yet the NFU found that the uplift does not extend into the longer term, with farmers’ confidence for the next three years having fallen by six points.
The union attributes the fragile sentiment to growing uncertainty over the future of agricultural policy and trade arrangements with other countries following the Brexit referendum vote.
Among the sectors that are feeling least certain about their prospects are horticulture and poultry, the NFU’s study found. Both sectors rely on overseas labour and fear Britain’s Brexit policies on immigration will lead to labour shortages.
Both sectors also expect finances to be stung by an increase to the National Living Wage.
Arable farmers’ confidence remains negative at minus two points, according to the survey.
Meurig Raymond, the NFU’s president, said he was pleased that overall confidence within agriculture had risen compared to last year and he said the longer-term uncertainty was understandable.
Mr Raymond, who farms in Pembrokeshire, said: “Increased farmer confidence comes after a year of huge challenges to the British farming industry and we are pleased that our members are feeling positive for the year to come. Any increase in price received for farmers is welcome news and we hope these are sustainable for years to come.
“It is no surprise that the Brexit vote has impacted the confidence of farmers in the longer-term and uncertainty surrounding our future relationship with the EU, our ability to negotiate future trade deals and access to non-UK labour has all taken its toll on confidence.”
Will Terry, the NFU’s regional board chairman, who farms at Ravenscar near Scarborough, said a lot of farmers were keen to leave the EU and so they feel they have to see it through and get a good outcome, however a lack of detail about the Government’s future immigration rules is hampering the horticulture and poultry sectors which rely on overseas labour the most.
Mr Terry said: “Many are finding it hard because of Brexit to find Eastern European labour to come back in because many of these people feel they are not wanted anymore, while the financial discrepancies in the exchange rate don’t make it as appealing for them to come and work here.”
According to the NFU’s survey results, 42 per cent of farmers have sought borrowing over the past two years, a trend which Mr Raymond said shows that many farm businesses are facing financial pressures.
The union chief said: “For farming to have a profitable and productive future we need reassurance on key issues resulting from Brexit; such as access to a competent and reliable workforce and the best possible access to the Single Market.
“It is clear that farm businesses still remain under pressure and this survey demonstrates a dependence on borrowing from banks which is concerning. We have recently met with senior bank officials and will continue our discussions to make sure they understand the concerns of the farmer on the ground.”