Union says government policies are depressing farmers and stunting investment
Farm business confidence has reached historically low levels, according to the NFU’s latest Farmer Confidence Survey.
The union said that this year’s figure bypassed the record lows set in 2024, when the survey indicated 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 -38.
The NFU said the study, which was taken before Defra announced it was closing Sustainable Farming Incentive (SFI) applications this week, represents a new all-time low since the survey began 15 years ago.
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. The SFI news will only exacerbate cashflow issues and farmers’ capability to invest, the NFU observed.
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, with another hammer blow dealt to the farming sector without warning last night, I’m realising there is no such thing as rock bottom as far as Defra is concerned.
“Where is the transparency? Where is the accountability? Last year Defra closed applications for Capital Grants, grants that are used for important environmental work such as tree planting, buying equipment to improve air and water quality, or habitat restoration, with no notice, leaving farm businesses in the lurch.
“Last year this government promised us they wouldn’t introduce a tax on family farms upon death, but they did, leaving many farming families without hope for the future. And now they are taking away direct payments – faster than they originally promised – leaving farmers with no alternative scheme to plug the financial hole they find themselves with.
“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.”
Survey lays bare farmers’ concerns
The fact that both confidence and investment are falling across the board raises serious questions about the future of homegrown food production, the NFU said, at a time when geopolitical tensions are high, and the government has repeatedly stated the importance of food security to the UK’s national security.
The survey revealed that:
- 85 per cent of landowners believe the reforms to IHT will increase their liability. Of these, 32 per cent say they plan to reduce investment to mitigate this increase.
- 88 per cent of respondents said the phasing out of direct payments would negatively impact their business.
- 76 per cent of employers expect to be impacted by the increase in employers’ NI contributions. Because of this increase, 65 per cent said they expect a reduction in profits and 43 per cent expect to reduce investment to offset these additional costs.
- Regulation and legislation also remain a key issue, with 84 per cent of respondents saying they will continue to negatively impact their businesses.
In its newly launched Blueprints for Growth, the NFU said it has provided solutions that, if adopted, would help reverse this collapse in farmer confidence and enable much-needed investment in the future of British food and farming.
