2012 Weather Dents Farming’s Bottom Line

UK - Figures released yesterday (30 April) reveal the major impact on farm income, played by terrible weather throughout 2012.
calendar icon 1 May 2013
clock icon 3 minute read

Latest Defra farm income figures show a 14 per cent decrease in the bottom line for UK agriculture, as the total income from farming (TIFF) decreased by £737 million in 2012 to £4.7 billion.

NFU Chief Economist Phil Bicknell said: “The overall fall in farm profitability will not be a surprise for anyone in the industry. The UK recorded its second wettest year ever in 2012, and no farming sector was immune from the weather. I also expect these headline figures to hide tremendous variation between regions.”

Mr Bicknell also warned of the continuing impact of the inclement weather on farming finances.

“On top of delayed planting last autumn, crop development has been slow and spring planting is behind schedule in many parts,” he said.

“For livestock producers, the immediate concern is a lack of fodder after a long winter, which follows on from higher feed bills in 2012. We may only be four months into the year, but the pointers are for UK farming profitability to be further squeezed in 2013.”

NFU President Peter Kendall underlined the challenges facing the agricultural industry: “Falling farm profitability shatters the myth that high commodity prices would mean high profits. It is vital that farmers’ turn a profit and that they re-invest. The reality is that low profitability and falling confidence does not provide a secure framework for a sustainable food industry,” he said.

“In recent weeks, there has been much talk of shortening supply chains in the agri-food sector. Yet it’s clear that those supply chains also need viable farming businesses as their foundation. The role of CAP in farming’s resilience should not be discounted either.

"The weather chaos has laid bare the importance of CAP payments. With profits squeezed, a larger number of farmers will again be forced to rely on CAP’s direct payments to underpin their business in the year ahead. Managing risk and volatility are both key and that must be recognized by the government in its CAP negotiations and in pricing decisions taken by the food chain.”

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