Industry leaders have called on the government to do more to help hard-pressed farmers after MPs described delays to support payments as unacceptable.
NFU president Meurig Raymond said: “The fall in prices and associated cashflow problems are the biggest challenges currently facing our farmer members.
“And we are not expecting the market situation to get better any time soon.”
Mr Raymond was responding after a report by the House of Commons environment, food and rural affairs select (Efra) committee hit out at delays in basic payments to farmers.
Published on Wednesday (2 March), the report said farmer would face further cashflow problems unless problems were rectified with the IT system at the Rural Payments Agency.
The document followed a three-month investigation by the MPs’ committee into low farmgate prices, particularly in the dairy, sheep and pig sectors.
Mr Raymond said: “We are pleased the Efra committee has listened to our evidence and to others from across the supply chain and produced this wide-ranging report.
“There is no quick fix. However, the report identifies a range of recommendations that can help in the short term and not leave the industry so exposed in the future.”
The report found that current legislation surrounding origin labelling has the potential to mislead consumers and cause confusion.
MPs found a growing interest in the provenance of food and in British products required a move towards clearer labelling.
Other recommendations include better pricing models, long-term relationships in the supply chain, contracts, producer organisations and a greater emphasis on exports.
Farmers expected to see the report swiftly followed up with positive, visible and tangible actions, said Mr Raymond.
He added: “It is vital the industry comes together to deliver these recommendations to support farmers through these difficult times.
Genuine improvements, transparency and commitment would give farmers more confidence.
Mr Raymond said: “Using these tools will help the agri-food sector through this period of uncertainty and the whole supply chain better combat volatility.”
Judith Bryans, chief executive of Dairy UK, said the entire dairy industry was taking positive steps forward, but still needed government support to achieve long-lasting success.
Dr Bryans said: “From farm to fridge, the industry is affected by harsh market conditions and we must continue to work with government and its agencies to facilitate and stimulate demand at home as well as in key export markets.”
Focus on innovation
In order to develop new export markets, the sector would need to showcase and promote the quality, the value and the integrity of UK dairy products, she added.
“We fully agree with the committee on the need for innovation and new product development to meet changing demands.
“We must focus on value to make sure we deliver innovative, appealing and nutritious dairy products to consumers across the world.”
Defra said the government had implemented a range of measures to help farmers ride out the downturn – and would continue to do so.
A Defra spokeswoman said: “We recognise that many farmers are suffering financial difficulty in the face of volatile global prices.
“We want to help find ways through this difficult time to build a thriving, resilient industry that is able to take advantage of the growing demand for British produce both at home and overseas.
Measures had included the introduction of five-year tax averaging, backing a futures market and the creation of producer organisations, and opening up new export markets.
“We’re also continuing to push for mandatory labelling for dairy products so consumers are clear where the food they buy comes from,” said the spokeswoman.
More than 70,800 farmers – over 80% of all those eligible – had now received their basic payment and almost all farmers in England would be paid by the end of March, she said.