NFU President Peter Kendall will today warn that farmers face serious challenges in maintaining their record of growth and success through 2012.

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“Many of the things we have been hearing from Government ministers recently on the economic potential and importance of farming have been hugely encouraging.  The penny has finally dropped,” he will say.

“They’ve got our message that productive, efficient, sustainable farming has a vital role to play in building food security and kick-starting economic growth.

“Look at the experience of the horticultural sector over the past year or so. Profitability has fallen dramatically, input costs have soared, excessive retail promotions are depressing farm gate prices and production has been volatile following last year’s severe winter and dry summers.

“It is little short of a national scandal that we are only 60 per cent self-sufficient in vegetable production, and the trade deficit is widening all the time. The sector is being driven to its limits and is evidently not coping with the strain. It’s clear that a critical point will soon be reached, where, if nothing changes, we will simply see a greater proportion of the UK horticulture sector given up to imported produce.

“So what lessons can the rest of farming learn from growers’ experiences? The main one is that, even though the fundamentals of markets remain sound, price volatility is an ever present risk, and we need to be in a position as far as possible both to moderate it and to mitigate its effects, so that short-term shocks are not allowed to cause long-term damage. We can’t buck the market, but we can do a lot to take the edge off its fluctuations.

“I remain as optimistic as ever about the longer-term prospects for farming. But even though the trend may be upwards, that doesn’t mean that there won’t be significant turbulence along the way. With the crisis in the Eurozone unresolved, 2012 has the potential to be a very difficult year, for farming as for the rest of the economy.”

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