A new survey has highlighted the resilience of the farming industry through the pandemic, but indicates that Brexit is still a big concern for farmers.
Almost half of agricultural businesses expect a negative impact as a result of the UK leaving the EU, an increase from two years ago.
According to Virgin Money's Agri Business survey, which spoke to 300 farmers, over one-third report that the pandemic is continuing to have a negative impact.
The survey monitored any changing trends since 2020, the last time the survey was undertaken.
It asked farmers how they were being affected by issues such as the pandemic, Brexit and labour shortages.
Just over half (51%) of farmers reported that the pandemic is now having very little impact on their business, an increase of 4% from the 2020 survey.
However, 35 percent told the bank that the pandemic continues to have a negative impact, down from 43% in 2020.
Almost a third of farming businesses are still struggling with worker shortages and labour absences, as well as delays in their supply chains.
On the bright side, those who thought Covid had had a positive impact on their enterprise has gone up from 5% to 9%.
This is largely driven by increased demand from supermarkets, demand for holiday lets, more people wanting to buy local and direct selling from their own farm shops.
But farmers still remain nervous about the implications of Brexit and awareness of its impact is higher this time than in the last wave of research.
Nearly half (43%) didn’t know what the impacts would be in 2020, whereas this has dropped to 27% in 2022, with almost half now expecting a negative outcome.
There is a lot of concern about reduced support payments and a perceived lack of understanding of the sector by the UK and devolved governments.
An absence of clarity is a key issue, with uncertainty over the future of exports, both to the EU and new markets, how to deal with labour shortages now that freedom of movement has been withdrawn and what impact lower standard imports will have on profit and competition.
Brian Richardson, head of agriculture for Virgin Money, said the survey shone a spotlight on the 'unknown territory' affecting the sector, namely Brexit and loss of BPS.
"In some ways, the uncertainty has possibly forced farmers to look at their businesses with a more open mind, and hopefully this will stand them in good stead for the future.
"Reassuringly, the industry seems to be making a good recovery following the pandemic and it appears to have opened up a lot of opportunities for people to explore other income streams."
Of the 300 respondents, 78% had a turnover of between £100,000 and £2.5 million, with 25% having a turnover of between £1 – £2.5 million.
