Farmers getting record loans to survive crisis

A record £17.8bn was lent to farmers from banks last year as they came under financial pressure from supermarkets, late subsidy payments, extreme events such as flooding and volatile markets.

The pressure on the industry shows no sign of abating either with prices for milk, wheat and pigs all more than 30 per cent lower than they were two years ago, the National Farmers’ Union (NFU) said, while prices for spring lambs in 2015 were down 11 per cent on the five-year average.

Union leaders are also anticipating “catastrophic” implications for horticulture from the introduction of the national living wage – a sector in which farmers are also suffering from falling prices.

The warning about the industry’s plight comes as farmers meet today for the start of the annual NFU conference which takes place over two days in Birmingham.

Both the Environment Secretary Elizabeth Truss and Farming Minister George Eustice are due to give speeches at the event, and they will be urged by the NFU finally to publish their department’s long-promised 25-year food and farming plan.

Ministers can also expect to be questioned over delayed payments of farming subsidies under the European Union’s common agricultural policy (CAP), while farmers will hear from both 
sides in the EU referendum debate.

Criticism has been levelled at Ministers for their unwillingness to lay out how British agriculture would be supported by the Government in the event of an ‘out’ vote.

NFU president Meurig Raymond will tell the conference: “British farming has felt blow after blow in recent years – one thing I know for sure is there is no possible way that any sector can carry on in the same vein.

“Farmers borrowed a £17.8bn from banks in 2015 – a record high. This paints a picture for the many businesses having the profit squeezed out of them. Viable businesses cannot continue operating without profit and farms are no exception.

“We are calling on the Government to provide the tools our sector needs to overcome the challenges and ensure they thrive.

“The 25-year food and farming plan must address the fundamental issues of productivity and competitiveness.

“It needs to see a culture change about how we value food and farming.”

He is warning the plan must ensure British farmers have access to the same agri-tech developments as competitors including pesticides and genetic modification (GM) techniques.

Farmers are not against the introduction of a living wage in principle, but it must be sustainable for businesses and workers, he will say, warning that the introduction of the national living wage has the potential to make fruit and vegetable growers unprofitable in just three years.

Mr Raymond is calling for a plan that would ensure a properly functioning supply chain and allow consumers to see they were buying British, and for the Government to commit to increasing the UK’s self-sufficiency in food.

A spokesman for the Department for Environment, Food and Rural Affairs, said: “Our 25-year plan for food and farming will set out actions to deliver our commitment to create a more profitable and resilient farming industry that can take advantage of the growing demand for quality British produce both at home and overseas.

“It will detail how we will attract skilled people into the industry, build the British brand and give farmers the tools to improve productivity and competitiveness so the future is sustainable, profitable and world-leading.

“We recognise many of our farmers are facing tough times in the face of volatile global prices and we’re pursuing a host of measures to support them, including introducing a fairer tax averaging system, developing new futures markets to help deal with volatile prices, and championing our produce through the new Great British Food Unit.”