Farm business confidence has reached historically low levels, bypassing the record lows set last year.
The former government received deep criticism when last year’s Farmer Confidence Survey showed that short-term confidence had deteriorated to -25 and mid-term confidence to -22. This year, short-term confidence has decreased by another 10 points to -35 and mid-term confidence has dropped by 16 points to a worrying -38.
This has created a new all-time low since the survey began 15 years ago. If the survey were taken again today, it’s expected this would drop even further after Defra’s sudden announcement it was closing without notice the SFI scheme.
The survey also showed that, for the first time ever, investment across the board is drying up with farmers and growers not able to make investments in key areas such as machinery, infrastructure and energy efficiency, creating a significant barrier to growth.
NFU President Tom Bradshaw said: “When our Confidence Survey results came out last year, we thought we’d hit rock bottom. When we were initially looking to release our survey results today, we knew we’d hit a new all-time low. Now, I’m realising there is no such thing as rock bottom as far as Defra is concerned.
“No business can be expected to plan, invest, grow and increase its economic contribution, whilst hitting government environmental targets, when it is being slammed time and time again by policies which strip away its profitability.
“Business confidence was already low. Now we are in situation where the farming community has no confidence in the government.”
The survey revealed that:
- 85% of landowners believe the reforms to IHT will increase their liability. Of these, 32% say they plan to reduce investment to mitigate this increase.
- 88% of respondents said the phasing out of Direct Payments would negatively impact their business.
- 76% of employers expect to be impacted by the increase in employers NI contributions. Because of this increase, 65% said they expect a reduction in profits and 43% expect to reduce investment to offset these additional costs.
- Regulation and legislation also remain a key issue, with 84% of respondents saying they will continue to negatively impact their businesses.