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Volatility Takes Toll on UK Farm Profitability

05 May 2015
National Farmers Union

UK - A significant drop in commodity prices across the board is a major factor in causing a fall in the overall profitability of the farming sector in 2014, the National Farmers Union has said.

Total Income from Farming (TIFF) figures released by Defra show that, in real terms, the headline figures for 2014 fell by 4.4 per cent to £5.4billion.

However, farming’s contribution to the UK economy, in terms of its Gross Value Added (GVA), has risen once again to reach almost £10billion, showing the importance of farming to the economy and the resilience of the sector during times of uncertainty and volatility.

NFU President Meurig Raymond (pictured) said: “These figures underline the impact of falling commodity prices. We have seen a roller-coaster ride in terms price falls across the various farming sectors over the past year and this trend has continued into 2015. For example dairy and pig prices are currently almost 20 per cent below compared with the same period last year and lamb values are also under pressure.

“The stronger pound has also exerted downward pressure on the sector’s profitability in 2014 and continues to be a critical factor in determining commodity prices.

The NFU has also stressed, with just a week to go before the General Election, it is vital that whoever ends up at Number 10, the next Government must ensure that it has the right policies in place to help the industry invest and grow for the long term.

Mr Raymond said: “UK farming’s contribution to the wider economy has increased by 34 per cent. With the right conditions British farmers can continue this impressive long-term performance.

“We want the next Government to create the right environment to encourage investment, growth and innovation, therefore securing the future of the country’s food and farming industry. The NFU’s farming manifesto highlights the key policy recommendations that the industry, along with Government can address to deliver this continued growth.”

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