Income figures prove the value of agriculture to the economy, says NFU
PUBLISHED: 07:33 05 May 2018 | UPDATED: 07:33 05 May 2018
Farming’s contribution to the national economy has risen by 20pc to £10.3bn – which industry leaders said was further evidence that the sector must be properly valued by the government after Brexit,
The latest Total Income from Farming (TIFF) figures from Defra show the sector’s profitability increased in 2017, albeit from a low base, by 41pc, to £5.7bn.
Defra’s report says the reasons for the change include a 12pc increase in crop output, driven by increases in both prices and production for cereals and industrial crops; a 7pc increase in livestock for meat driven by price increases; and a 24pc increase in livestock products driven by an increase in milk price.
Guy Smith, deputy president of the National Farmers’ Union, said: “This is positive news for the farming sector and very clearly demonstrates the significant contribution agriculture makes to the wider economy.
“As the NFU prepares to submit its consultation response to government on a future farming policy, these figures provide further evidence that a new agricultural policy must allow farm businesses to be productive, profitable and progressive.
“The increased profitability of our sector is particularly good news, as farmers have experienced a full year of higher commodity prices due to the devaluation of the pound which occurred after the EU referendum.
“It is important to remember that this rise comes after three years of falling profits and margins, and increased price volatility for many across the industry. However, the NFU is concerned whether this performance can be sustained in future years.
“In addition to the effects of the recent wet weather, the cost base of the industry has been rising. Some farm commodity sectors are also witnessing falls from the recent historic highs seen in 2017. Milk price, for example, has fallen nearly 8pc in the past three months.
“Lower farm gate prices will feed through to a lower bottom line for 2018 and it would be reckless to draw from these figures that farming is entering a period of sustained profitability.
“In order to put farmers in the best position to continue producing food for the nation, this sort of volatility needs to be addressed in future agricultural policies.”
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