Farm income fall 'huge blow' to industry, NFU says

Farming businesses across the country are increasingly concerned about their bottom line, the NFU warns
Farming businesses across the country are increasingly concerned about their bottom line, the NFU warns

A forecast fall in farm business income during 2020-21 has been described as a 'huge blow' to the farming sector as support payments reduce this year.

Defra has released the provisional figures for the 2020/2021 Farm Business Income report, which demonstrate the volatility farmers continue to face.

The report anticipates a drop in income of 43% for cereals businesses, 35% for crop businesses and 10% for dairy businesses.

The extremely wet autumn and winter of 2019 along with the spring drought of 2020 was a key driver in influencing income, Defra explained.

The effects of the Covid-19 pandemic on the farming industry is also expected to be a key factor.

It comes as BPS payment rates will be reduced this year, without any new schemes to replace this income and a lack of detail about the interim and future schemes.

The average farm in England will see direct payment cuts of over 50% by 2024 before new post-Brexit schemes are fully available.

Tom Bradshaw, NFU vice president, said farming businesses across the country were 'increasingly concerned about their bottom line'.

“Volatility is something farmers are well versed in managing but it doesn’t make it any easier to deal with, especially while there is so much uncertainty about the future and how farm support schemes will operate," he said.

Industry uncertainty was revealed in the union's recent business survey, which showed confidence remains low among farmers for the third year running.

One of the key concerns is the phasing out of BPS, with 78% of respondents saying they believe it will have a negative impact on their business.

The survey also warns that the rise in input prices and changes to regulation and legislation due to Brexit is a major concern for farming businesses.

And nearly half (44%) of farmers have been impacted by the pandemic, with the figure jumping to 73% for horticulture businesses.

Mr Bradshaw said it was therefore 'crucial' for the government to support farmers in the move from BPS to new Environmental Land Management Schemes (ELMs).

He said it should also "provide productivity improving measures, such as grants and investment in R&D, it has promised so we can build resilience, profitability and sustainability across all sectors."

The final farm business income results are due to come out in October 2021.