NFU points up damage to rural economy

18 May 1999

NFU points up damage to rural economy

By FWi Staff

THE misery farming and other rural industries have experienced over the past 12 months has caused deeper economic problems in the countryside.

In a report unveiled today (Tuesday), A Barometer of the Rural Economy, the NFU says almost 90% of rural industries have been forced to lay off staff in the past year as their own businesses continue to decline.

Confidence is at an all-time low and farm incomes are expected to continue to plunge.

Three sectors in particular will suffer most, with pigs and poultry, mixed farms and lowland cattle and sheep actually going into the red this year, says the report.

Speaking at todays briefing following the second Rural Summit, held last week, NFU president Ben Gill said that he did not think it would have been possible at the time of the first Summit that, one year on, the situation could be any more grave.

“But the last 12 months have seen agriculture and the vital rural industries which it supports all fighting to stay alive,” he added.

The report points out that, because agriculture is the primary sector in a whole series of Inter-related rural industries, the suffering of farmers is being translated into suffering throughout the rest of the chain.

Key findings of the report include:

• Farm machinery, road haulage, feed and seed businesses, fertiliser manufacturers, seed mills and livestock auctioneers have all reported a fall in employment over the past 12 months;
• Agricultural investment is stagnant and not forecast to improve this year;
• The balance of trade of the agricultural machinery export market has fallen by £100 million since the end of 1998.

It also highlights the action needed to revive the ailing rural economy, including lower interest rates and the prevention of further increases in indirect taxes like fuel tax.

The report also calls for a more common-sense approach on planning and business development in rural areas, along with recognition of and support for the food health and safety production costs incurred by UK farmers.

“Any slight improvement arising from the drop in the strength of Sterling which we saw immediately after our first Rural Summit has since been lost,” said Mr Gill.

“Unless action is taken now many sectors will be irreversibly damaged.”