Business confidence remains low among farmers for the third year running, with a key concern being the phasing out of BPS, NFU's annual survey shows.
Both short and mid-term confidence among British farmers has again stayed negative, according to the union's latest confidence survey questioning 662 farmers.
The NFU said confidence was 'critical' for all farming businesses as it influenced production, investment and growth intentions.
One of the key concerns this year is the phasing out of BPS, with 78% of respondents saying they believe it will have a negative impact on their business.
Farmers will start seeing payment rates being reduced this year, without any new schemes to replace this income and a lack of detail about the interim and future schemes.
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 Covid-19 pandemic, with the figure jumping to 73% for horticulture businesses.
NFU president Minette Batters said that levelling up rural areas would help build farmer confidence and boost business and investment opportunities.
“The fact that both short and mid-term confidence has remained negative since 2018 is very telling of the uncertainty and challenges farmers continue to face," she said.
"This survey shows that many farm businesses are still reeling from the impacts of the pandemic and that there is lots of apprehension about the significant changes to rules coming down the tracks."
Mrs Batters said it wasn't surprising that the phasing out of BPS was the top concern among the union's membership.
"Not knowing what kind of standards will be involved in these future schemes makes it very difficult for farm businesses to plan for the future," she added.
“Farmers need to know that the government is supporting them and investing in rural Britain."
The NFU's survey was undertaken between 5 November 2020 and 8 January 2021, with short-term confidence classed as one year and mid-term confidence as three.
What are the key concerns affecting farmers?
Key issues for farmers, according to NFU's latest confidence survey, include:
• The phasing out of BPS, (78% believe this will negatively impact them)
• Input prices e.g. fuel, fertiliser, energy (59% believe this will negatively impact them)
• Regulation and legislation (53% believe this will negatively impact them)
• Farm gate prices (45% believe this will negatively impact them)
• Market or supply chain they sell into (40% believe this will negatively impact them)