Figures published yesterday by Defra reveal the contribution from farming to the wider UK economy is rising year on year. Welcoming the figures, the NFU today said the farming industry is playing a crucial role in stabilising the economy. Farming was shown to have contributed £7.4billion to the wider economy in 2010, a 5.3 per cent increase year-on-year.

 image expired

However, the figures show that farmers are still facing challenging business conditions. The overall profitability of UK farming fell by some £173m (-3.6 per cent) in 2010 as the industry saw input costs rise by 5.5 per cent whilst price rises for milk were shown to be below market value. Projections from Defra show higher input costs will again influence 2011 profitability, but indicate a two per cent rise in farming’s total income in the current year.              

NFU chief economist Phil Bicknell cautioned that, “This headline performance is not representative of trends across all agricultural sectors or individual farm businesses. In sectors like dairy and poultry for example, rising input costs have outpaced any change in farmgate prices. Elsewhere, farmers and food processors are increasingly conscious of potential downward price pressure from supermarkets that could squeeze margins.”

Tweet