As costs for energy and fuel continue to soar, the NFU president Minette Batters has written to the Chancellor calling for greater support in domestic food production.
The letter, which has been sent ahead of the Spring Budget, emphasised the need to extend the Energy and Trade Industries (ETII) scheme to include energy intensive sectors such as horticultural and poultry production.
Poultry production and fuel duty
NFU analysis shows that, typically, a poultry producer spends 2p per bird on energy. This is now in the region of 10p per bird and has been as high as 25p. This means that farmers’ margins per chicken, normally less than 7p per bird, have been wiped out.
As a result, less than 38 million chickens are currently in the laying flock – down 13% vs. 2019 and before any allowance is made for the impact of Avian Influenza.
According to NFU, cost inflation (especially with feed) has dwarfed any price increases to date – forcing producers to reduce capacity.
Batters also raised the need for an extension to the current reduced rates of fuel duty, including for red diesel, as well as for enhanced support for capital investment which she said will help alleviate costs for farm businesses and improve productivity.
“At an NFU reception in Westminster in December, the Chancellor recognised the ongoing challenges of producing food in Britain, and we are now seeing the impact of these challenges play out through contraction across all sectors,” commented Batters.
“If the government is to halt food price inflation and help prevent further food shortages, greater support and confidence is needed for the thousands of farm businesses which are trying, but struggling, to feed our nation.
“It seems irresponsible that the ETII scheme completely overlooks primary food production, not to mention it being wholly at odds with the government’s own ambition to produce more home-grown fruit and vegetables. An urgent review into the ETII is needed to ensure that essential and vulnerable food producing sectors, such as protected horticulture and poultry production, do not face a cliff edge when the Energy Bill Relief Scheme ends later this month.”
Batters believes that improved support for capital investment and extending fuel duty rates will also provide farmers and growers across all sectors with “greater confidence”, especially given the substantial hike in red diesel, which she cites is 40% more than last April.