Farm business confidence has reached historically low levels, passing record lows set last year, the NFU annual survey has revealed.
Short-term confidence decreased by 10 points to –35 compared to –25 last year, and mid-term confidence has fallen even further from –22 to –38.
The “worrying” levels are an all-time low since the survey began 15 years ago.
Additionally, the union said had the survey been taken after the “hammer blow” of the closure of Sustainable Farming Incentive applications this week it would likely have dropped even further.
This comes against a backdrop of a “cashflow crisis and a bombshell budget” which revealed the ‘family farm tax’, increase in employer National Insurance contributions, and the acceleration of the direct payments phaseout.
“Each of these is another huge kick in the teeth, given the replacement scheme is now unavailable to so many farm business,” it said.
Read more: Farmers outraged as key sustainable farming subsidy closed at short notice
“When our confidence survey results came out last year, we thought we’d hit rock bottom,” said NFU president Tom Bradshaw. “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.”
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, which is acting as a barrier to growth.
“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,” added Bradshaw.
According to the survey, 85% of landowners believe the reforms to Inheritance Tax will increase their liability and 32% of these say they plan to reduce investment to mitigate this increase.
Meanwhile, 88% of respondents said the phasing out of direct payments would negatively impact their business, and 76% would be impacted by the increase in employer NI contributions.
“Business confidence was already low,” said Bradshaw. “Now we are in situation where the farming community has no confidence in the government.”
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