Farming leaders are warning of the increasing problems rising energy prices are causing for growers, particularly those producing protected crops.
Since January 2002 British wholesale gas prices have tripled and it has recently been reported that forward gas prices in January are likely to be some 70% higher than they were in January 2005, warned the National Farmers’ Union, pointing to the fact those rises have not been replicated in the rest of the EU.
The net result for UK farmer’s and growers is a loss of competitiveness, particularly in such energy-intensive sectors as protected tomatoes, cucumbers and peppers, where energy use can amount to as much as 40 per cent of the costs of production.
The NFU said growers are undertaking a number of measures to minimise the impact of energy price rises, including leaving glasshouse areas uncropped; planting later, changing crop types and investment in thermal screens.
However, for some it will not be possible to implement some of the changes because of business infrastructure, longer term market uncertainty and cost.
Ultimately for some growers it could mean that they will no longer be able to continue in business.
Philip Hudson, NFU chief horticultural adviser, said: “In November last year the EU Commission concluded that there were competition distortions in gas and electricity markets and that they would be pursuing remedies over the course of 2006.
“With no immediate decrease in energy prices in sight, a lot of producers will be hoping that these remedies arrive sooner rather than later.
“In the meantime we will continue to highlight the impact that these price rises are having on the sector and the potential threat this poses to the production of the great British tomato, cucumber, peppers and cut flowers.”
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