As the NFU conference got underway in Birmingham on Tuesday, president Meurig Raymond said farmers face unparalleled financial pressures from supermarket price wars, delayed Basic Payments, volatile markets and extreme weather, as levels of borrowing reach new highs.

Raymond said British agriculture needs a bold plan from government to ensure a sustainable future for farm businesses and the nation’s food production. He called for ‘actions to back the words’ from Defra on its 25-year plan for food and farming, which is set for publication.

The call was made against a bleak background for farming; December 2015 prices for milk, wheat and pigs were all down by more than 30 per cent compared to 2014 prices. Raymond said lamb prices are down on the five year average and the government’s new National Living Wage, which will apply from April for the over 25s (and is not to be confused with the Living Wage), will affect the bottom line of horticulture producers.

Meurig Raymond said, “British farming has felt blow after blow in recent years – one thing I know for sure is there is no possible way that any sector can carry on in the same vein. Farmers borrowed a £17.8billion from banks in 2015 – a record high. This paints a picture for the many businesses having the profit squeezed out of them. Viable businesses cannot continue operating without profit and farms are no exception.

“We are calling on the government to provide the tools our sector needs to overcome the challenges and ensure they thrive. The 25-year food and farming plan must address the fundamental issues of productivity and competitiveness. It needs to see a culture change about how we value food and farming.”

In her speech, Defra secretary Liz Truss acknowledged that “Farmers here in Britain have faced a tough year,” with slowing export demand, the continued effects of the Russian trade embargo and a strong pound combining to crate a difficult situation, compounded in the north-west by the after-effects of flooding.

She said, “We’ve seen the highest wheat yields on British farms for 25 years and milk production at a 20-year high – but sharply falling prices. Pork [are] prices at their lowest for eight years [and] farmers’ incomes… are expected to be down by half in dairy.”

Reasons to be cheerful

However, the Defra secretary said increased investment in science and innovation will bring new opportunities, as will new international markets, brokered by government deals and facilitated by the creation of the Great British Food Unit last month. She promised that the government would be reducing regulation and investing in flood and disease protection. “Action in all these areas and confidence in the future are at the heart of the 25-year plan for food and farming we will be publishing shortly,” said the Defra secretary.

Truss promised to double Defra’s science spend, increasing it to £130million, though it was announced in December that the environment department will face a further 15% cut to its budget (Defra has been the hardest hit of all government departments in terms of cuts proportional to its running costs). The Defra secretary said there will be a cross-government investment of £80 million to develop research centres for livestock, crop health, data and precision engineering. She said, “There is a new generation excited about farming. It is the fastest-growing subject at university.”

Though she maligned the complex Common Agricultural Policy, especially the three crop rule, Truss appealed for farmers to vote to remain part of Europe, after Prime Minister David Cameron’s announcement that an in-out referendum on EU membership will be held in June. Though farming minister George Eustice, who once stood as a candidate for UKIP, has declared himself for the ‘out’ campaign, Truss said, “By voting to remain we can work within a reformed EU to reduce bureaucracy and secure further reform while still enjoying the significant benefits of the single market which gives us access to 500 million consumers.”

Commenting on delays to Basic Payments, Truss said, “It is vital we do the calculations properly or we could face huge fines from the EU. Disallowance is already running at £70million a year, money we should be investing to improve the growth prospects of British food and farming.

“I have been regularly monitoring progress with [RPA Chief Executive] Mark Grimshaw and making sure he gets all the support he needs.”

Although both key speakers made it clear that farmers need some succour now, with the current farming landscape looking bleak, looking to the future, ahead of Defra’s plan, Meurig Raymond added, “Being 62 per cent self-sufficient is not something we should settle for and the projected decline to 53 per cent by 2040 is not an option for the sector. The future should see our industry reach its productive potential and Defra’s plan has the power to enable farmers to do just that. The plan must back the future of British farming.”

The environment secretary’s speech can be read in full here.