Twelve months after one of the worst periods in a year marked for its severe flooding, research from the Environment Agency (EA) suggests that record-breaking wet weather in 2012 could have cost the UK economy close to £600 million, including a £200m financial impact for businesses. 

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According to rural insurers NFU Mutual, flooding in November 2012 cost farming and other rural businesses in excess of £20 million, based on claims alone.   

According to the EA figures, each affected business was setback by an average of £60,000. Much of Britain entered 2012 in a state of drought, and those in South and Central England spent a quarter of the year under official drought restrictions (20m people were affected by hosepipe bans over the year). However, although parts of the country were officially in drought for 1 in 4 days of the year, flooding occurred 1 in every 5 days, according to the Environment Agency.

The Agency suggested its flood defences worked well, protecting businesses worth £1.7 billion to the UK economy. However, beginning its annual flood awareness campaign, the Agency urged businesses to sign up to receive flood warnings and make a flood plan so they are well prepared for periods of extreme weather.

Flooding had especially severe impacts on farm businesses. Spring flooding in Somerset – which was particularly hard hit – damaged pastures, meaning many had to be reseeded and grass yields in 2013 were reduced by up to 25 percent.

The estimated extent of agricultural flooding over the two day period of 28th – 30th November 2012 was 43,000 hectares – this alone is greater than the area flooded in June and July 2007, the last major flood year before 2012.

According to the NFU, assessing the financial impact of the 2012 floods on agriculture has been extremely difficult, but the union has pointed to Defra's farm income figures, released in spring 2013, which show a 14 percent decrease in the bottom line for UK agriculture in 2012.  The total income from farming (TIFF) decreased by £737million in 2012 to £4.7 billion and NFU claims that a significant proportion of the lost income can be put down to wet weather and flooding.

Meteorologists suggest that the pattern for UK weather is for more extreme rainfall events less often, meaning years like 2012 will become more common as climate change worsens. Flood Minister Dan Rogerson has said that combined government and private sector spending on flood defences and other measures to reduce the risk of flooding amounts to "over £2.3 billion… more money than ever before."

However, in the face of more extreme weather and government cuts, the Environment Agency has asked business to contribute towards funding flood defences. On Tuesday the Agency revealed details of some high-profile donations, including significant funding from food multinational Nestlé. EA said, "businesses are increasingly coming forward to contribute to local flood defences that would otherwise not get full government funding."

NFU has pointed out that, despite the promise of additional capital funding for flood defences, the Environment Agency budget has been cut by £45 million since the coalition government came to power in 2010.

The Parliamentary EFRA Committee report into managing flood risk, released earlier this year, was also critical of the Coalition's performance. Committee Chair Anne McIntosh MP said, "Spending on flood defences has not kept pace with rising risks from more frequent severe weather. The Chancellor must ensure that investment increases by £20 million year on year. We need that money over the next 25 years to protect homes and businesses better."

Upon the release of the EFRA report in July, McIntosh also said the government had failed to secure enough private sector funding for flood defences and warned that "current funding allocations fail to protect agricultural land adequately, posing a risk to the security of UK food production."

On Monday, David Rooke, Director of Flood and Coastal Risk Management at the Environment Agency, commented, "Extreme events, such as the flooding and drought in 2012, are likely to become more frequent and more severe in the coming decades. It is vital that businesses plan for weather impacts to safeguard their operations today and in the future. Every £1 spent on preventing flooding saves £8 in repairing damage."