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More Investment Needed

28 October 2010

UK - Farmers are moderately optimistic about the medium term prospects for their industry but higher confidence across the board is needed to secure the investment required for a thriving food and farming sector according to the National Farmers' Union (NFU).

Publishing a new set of survey results on farmer confidence today, the NFU has reported that although confidence levels are higher when looking at the medium term future of the industry, results from the survey have shown farmers have more concerns about the prospects for the next 12 months. And many cited concerns over regulation and increases in price for inputs as important issues.

Commenting on the survey, NFU Head of Economics and International Affairs Tom Hind said: “Confidence surveys are a well-established measure of business sentiment that are used by wider industry and also our counterparts in other EU member states. We felt it was important to get a better feel for our members’ attitudes to the prospects for their industry.

“I believe these survey results are encouraging. They demonstrate that farmers are reasonably confident about the medium term prospects for agriculture with 38 per cent more confident about the future. Above all, they demonstrate a high level of commitment and longevity to individual businesses. Almost 40 per cent of businesses surveyed believe they will be in operation for over 21 years. This is testimony to both the resilience of farmers and also the historical and family legacy attached to many businesses.

“Nevertheless, there are some concerns that general levels of confidence are not high enough to provide the necessary encouragement for farmers to invest financially in their businesses, with particular concerns about lower confidence levels among livestock farmers. Investment will be absolutely essential, not only to meet regulatory demands, but especially to secure a more competitive productive sector long-term.

"However we have to take this survey in context. Responses from our members were given before the announcements made in last week’s spending review and before the full effect of the summer’s grain price spike was felt by farmers and growers. This has been highlighted by the nervousness expressed by farmers when talking about financial investments in their business.

"The survey results show that investment will be driven in the main by larger scale farming businesses, especially those over 200 hectares. Economies of scale are a key part of business competitiveness but we should not ignore the importance of smaller and medium sized enterprises which underpin the fabric of British agriculture and the wider upstream and downstream industries that it supports.”

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