Immediate action is urgently needed to address the financial crisis in farming and prevent more people from leaving agriculture, industry groups have warned.
A mismanaged rural payments scheme has left farmers relying on credit cards to keep their animals alive in a situation which has been described as a “Whitehall fiasco” by the chair of a Commons committee.
And in a report published this week by the Environment, Food and Rural Affairs Committee, MPs said farmers are at risk of suffering more financial pain if the Rural Payments Agency does not commit to fixing the ongoing issues with its IT systems.
Grants administered by the RPA have been delayed since last year due to an inadequate electronic application system.
Phil Stocker, chief executive of the National Sheep Association, said: “With farmgate prices being so low, the importance of getting payments out to farmers on time is essential to aid cash flow. Some farmers still haven’t received payment and this year’s fiasco must not be allowed to happen again.”
Meurig Raymond, president of the National Farmers’ Union, said: “The fall in prices and associated cash-flow problems are the biggest challenges currently facing our farmer members. And we’re not expecting the market situation to get better anytime soon.”
The EFRA Committee made recommendations on how cash flow concerns can be addressed. Its report said it is crucial the RPA works to at least match the target achieved by the previous rural payments scheme of 90 per cent of payments made by the end of December each year.
And in line with The Yorkshire Post’s Clearly British campaign, MPs demanded Defra asks the EU for support in establishing clear rules to stop items such as butter labelled as ‘British’ when the raw product is from overseas.
Mr Stocker said: “The enquiry clearly shows that the structure of the farming and food sector does not generally support adequate farmgate prices, despite the fundamental role agriculture plays in the UK economy.”
Mr Raymond added: “There is no quick-fix. However the report identifies a range of recommendations that can help in the short-term and not leave the industry so exposed in the future. Our members now expect to see this swiftly followed up with positive, visible and tangible actions.
“Pricing models, long-term relationships, contracts, producer organisations and a greater emphasis on export opportunities for British agriculture are all tools which can be used by government and the supply chain.”
The EFRA Committee also called for more effective co-ordination between Defra and the devolved administrations to prevent unsustainable price equalities emerging at a national level.
It questioned assurances from the retail sector that there is no link between the price supermarkets sell to customers and the prices they pay to farmers; encouraged the industry to work with Defra to take forward work on futures markets, and for urgent consideration to be given on how to extend the Groceries Code Adjudicator’s remit to include both direct and indirect suppliers to major UK retailers.
PIG MARKET FEELING THE STRAIN
A new pig industry report states that farmgate prices for pigs have fallen by a third in a little over two years and are now at a near eight-year low.
Stephen Howarth, AHDB Pork market specialist manager, said: “The report has been produced against a backdrop where production continues to rise as efficiency and productivity improve and record weights are being seen.
“This all leads to more pig meat on the market. At the same time, demand for pork has dropped, even though the price is falling. UK pork is having to battle hard against cheaper EU imports, exacerbated by the weakness of the euro against sterling and a supply glut on the continent.”