Rising costs leave farmers fighting to stay viable, UFU survey reveals

The findings, from the UFU's 'A Budget to Back Farming' membership research, reveal the scale of the financial squeeze facing farm businesses. Insufficient profits or available cashflow were also identified as a barrier to investment by 57.2% of respondents, inheritance tax policy by 54.2%, and uncertainty around farmgate prices by 49.8%.

The UFU said the figures highlight the growing difficulty farmers face in balancing the cost of producing food with the need to reinvest in their businesses, improve efficiency and remain competitive.

UFU deputy president Clement Lynch said: "Farmers are being squeezed from every direction. Feed, fertiliser, fuel and other essential inputs represent substantial costs before a single product leaves the farm gate, yet farmers have limited control over the prices they receive for what they produce.

"When almost three-quarters of respondents identify production costs as a barrier to investment, it is a serious warning about the financial pressures facing our industry. Farmers cannot continue absorbing these costs while being expected to invest in productivity, environmental improvements and the future of their businesses. Profitability is not an optional extra in farming. Without it, there is no investment, no growth and ultimately no secure future for domestic food production."

The survey also found that 84% of respondents had reduced, postponed or cancelled investment, or proceeded at a reduced scale, in at least one area of their farm business.

The UFU said continued financial pressures risk undermining investment in farm buildings, machinery, infrastructure and technology, with consequences for productivity, competitiveness and environmental performance.

UFU seeds and cereals chair Richard Orr said: "The cost of producing food is becoming an increasingly difficult equation for farmers to balance. Decisions about fertiliser, fuel, seed, machinery and other essential inputs have to be made well before there is any certainty about the return a business will receive.

"Farmers cannot simply pass these costs along the supply chain. They are often left carrying the financial risk, and when margins are squeezed, investment is one of the first things to suffer. We cannot build a resilient agricultural industry on businesses that are struggling to cover the cost of production. Farmers need fair returns, competitive input costs and policies that give them confidence to invest rather than simply survive."

The findings come ahead of the upcoming UK Budget, with the UFU reinforcing its calls for measures that protect farm profitability and prevent further costs being imposed on agricultural businesses.

The research identified strong support for key Budget priorities, including reversing inheritance tax changes (83.7%), increasing agricultural funding for Northern Ireland (53.8%), suspending the planned carbon border charge on fertiliser (43.7%) and retaining the reduced rate of duty on red diesel (34.2%).

Mr Lynch continued: "These Budget priorities are directly linked to the cost of doing business and the confidence farmers need to plan ahead. Additional taxation on fertiliser, uncertainty around inheritance tax and pressure on agricultural funding all risk making an already difficult situation worse.

"The Chancellor has an opportunity to recognise the cumulative pressures facing farming families and deliver practical measures that protect competitiveness and support investment.

"Importantly, our research found that 85.8% of respondents would expect to increase investment over the next three years if their selected Budget priorities were delivered by the Chancellor on Wednesday. Farmers have not lost the ambition to invest - they are being held back by the financial realities of producing food. The Government must do their bit to reduce those pressures and start creating the conditions for farm businesses to thrive and invest."