We’ve all heard of the cost of living crisis, which when you actually look into it could be questioned for much of the UK general population, given inflation at 3.9% is being out manoeuvred by wage inflation at 7.4%.
Food is still relatively cheap at 11.2% of UK average income.
However, the lowest earning households spend double that on their groceries and with rent and mortgages increasing due to a lack of available housing and higher interest rates, it does add pressure onto low-income families.
The second crisis is a cost of business crisis, with businesses facing higher corporation tax, cost inflation and interest rate increases. In addition, national insurance contributions have risen from 13.8% to 15% from April 2025.
However, while businesses have to remain competitive in their market place, they can increase prices to cover some of these increases and try and maintain a margin.
Third crisis
Reading about these various crises, I have come to the conclusion that the most valid cost crisis is actually facing agriculture.
As farmers we have had a good season, weather has been kind, prices have been strong in most sectors and ironically some major inputs such as concentrates have decreased in price, down around 15% since 2023. This unfortunately happened at the expense of the arable sector, which may hold the key to some of the environmental issues facing intensive livestock sectors.
Farmers also have households to maintain, and so feel the pinch when the price of food and other goods goes up.
But unlike the general public, we don’t have the safety net of secure wage inflation, given the ebbs and flows of commodity and input prices. The issue is further compounded by farm support payments which continue to fall each year in real terms.
Sustainability
In theory, all the issues around environmental sustainability should be viewed as our chance to add value to our product while driving efficiency on farms.
But historically, policy development has been left in limbo by lack of government at Stormont and now a ‘rush job’ is being forced on the industry.
Processors, consumers and farmers want to see positive environmental outcomes, but the market must deliver a return and pass this on to farmers rather than just taking sustainability payments out of what we already receive.
At present it feels like farmers are having to front up most of the working capital, jump through hoops and take the risk to benefit everyone else.
However, for many farms, proposed changes to inheritance tax could be the final nail in the coffin.
The vast majority of productive farms in NI will either have to pay this tax or make changes to their business structures.
If we assume a holding is £625,000 over the threshold creating a £125,000 tax burden or £12,500 for 10 years, that is half an industrial wage to come out of the farm for 10 years from zero productivity.
The consequences of this really only lead to one outcome – the breakdown of the multi-generation family farm business.
As farmers we could probably deal with one or two of these crises, shrug our shoulders, and get on with it but when they are compounded, they create a major problem.
We have a fantastic industry with excellent people and resources. The tools are in the toolbox and examples of successful projects are out there. Nobody has to re-invent the wheel.
It’s time for some positive solutions before the ‘cost of farming crisis’ develops into a bigger problem and a ‘cost of no farming crisis’ with the social, environmental and economic issues that would bring.
SHARING OPTIONS