Cash flow pressures prompt NI farmers to leave industry

The size of the agricultural labour force decreased by 1% per cent from the previous year to 47,400
The size of the agricultural labour force decreased by 1% per cent from the previous year to 47,400

Around 600 farm workers have left the agriculture industry in Northern Ireland over the past year, new figures show.

The size of the agricultural labour force decreased by 1% per cent from the previous year to 47,400.

Within this, the number of farmers decreased by 2% to 29,500 due to decreases in both the full-time and part-time farmer categories.

In terms of other full-time workers, both paid and unpaid categories showed a decrease of 5% compared to 2015.

The statistics are compiled from a survey of farm businesses augmented by administrative data.

The preliminary results were based on the first 9,000 returns and, whilst they should give an indication of the main trends, are liable to be amended in the light of returns received and processed later.

Final results will be published in November 2016 by which time all returns from farmers will have been processed.

'Farmers need to take advantage of the voluntary supply incentive'

"When finances became tight recently, farmers were paying off farm workers and some, themselves, indeed did quit farming," said Charlie Weir, chairman of the Fair Price Farming NI told the Belfast Telegraph.

"When finances became tight recently, farmers were paying off farm workers and some, themselves, indeed did quit farming," he said.

"Numbers could be reduced even more when this year is recorded in next June's census.

"It's no surprise that the number of dairy cows has increased.

"Two or three years ago when prices were good, dairy farmers brought in more heifers and these have been added to the overall dairy herd when they calved.

"Now when prices are poor, farmers are holding on to older cows they would normally have culled just to try and keep cash flow up by producing more milk.

"This trend has been mirrored across Europe, but it has added to the over-supply problem.

"Farmers need to take advantage of the voluntary supply incentive that was announced by EU farm commissioner Phil Hogan to ensure supply and demand level themselves out soon.

"There has of course been a number of new entrants coming into the dairy sector changing over from beef farming, so this also could have increased the dairy cow numbers."

'Extreme hardship'

Borrowing on UK farms has grown significantly and is relatively unchecked in recent times with a record £17.769bn in the year ending June.

The data shows a rise of £208m in overall agricultural borrowing which shows a continued trend year-on-year.

Historically borrowings normally fall around December time as farm subsidy payments make their way into the farmers' bank account.

Between 2009 and 2014, the drop is borrowing between November and December averaged 4.5%.

But increasing numbers of farmers are borrowing to ease cash flow problems with the Chair of the Environment, Food and Rural Affairs Committee Neil Parish MP saying farmers face 'extreme hardship' as prices for produce is low.

Increasingly volatile markets may mean farming businesses that are highly seasonal or have long profit cycles will need to think differently about managing their cash flow in the future.

NFU President Meurig Raymond said: "Cash flow problems are arguably the biggest threat for farm businesses at present. And the NFU has been working directly with the banks to ensure a positive dialogue continues in the face of external factors, outside of our control, which are having an impact on farmers’ bottom lines.

"Farmgate prices for key commodities are in a markedly different place than they were two years ago, leading to lower margins and profitability across the sector."