Farm business confidence has reached historically low levels, bypassing the record lows set last year, and this all before Defra delivered another hammer blow to farmers through the precipitous closure of Sustainable Farming Incentive (SFI) applications.

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 slammed the door shut for thousands of farmers who were planning to access the SFI scheme.

This comes on top of an ongoing cashflow crisis and a bombshell Budget last October which announced the family farm tax – again unexpected - the increase in employer National Insurance (NI) Contributions, and the acceleration of the Direct Payments phaseout. Each of these another huge kick in the teeth, given the replacement scheme is now unavailable to so many farm businesses.

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.

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.”

The fact that both confidence and investment are falling across the board raises serious questions about the future of homegrown food production, at a time when geopolitical tensions are high, and the government has repeatedly stated the importance of food security to our national security.

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.

In its newly launched Blueprints for Growth, the NFU 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.

NFU President Tom Bradshaw added:

“As I told delegates at NFU Conference just a few weeks ago, the focus remains steadfast on providing solutions for our industry. These Blueprints set out a detailed vision of what’s needed to underpin sustainable, profitable farm businesses, while producing food for 70 million people and protecting and improving the great British countryside."

“If government wants to re-build confidence, work with us, not against us. We are ready and waiting to help set a new brighter course for the UK farming sector.”