The NFU has called for more support to help farmers deal with volatility as part of its asks to the Chancellor ahead of next week's spring budget.
In a letter to Jeremy Hunt, the union said farmers need renewed 'business confidence' to continue producing food in the long-term.
The letter highlights the need for the Treasury to address high production costs, the impacts of flooding and provide 'much-needed' certainty for UK food production.
The NFU also put a spotlight on an opportunity for the Treasury to incentivise green investment in the industry to help meet the legislated net zero by 2050 goal.
Tom Bradshaw, the NFU's new president, said: “We have written to the Chancellor ahead of the budget [6 March] to outline the policies needed to help UK farmers through some pressing and ongoing challenges.
“With input costs up 32% from 2019, more severe weather events causing flooding and crop losses, and with at least a 50% reduction in direct farm payment support due in 2024, our food producing businesses are facing a challenging economic backdrop.
“Farms are businesses there to produce food for the nation. Without profitability built into farm businesses to create some certainty ahead, it is very difficult for farmers and growers to invest in the future.
"But fundamentally this is exactly what they must do to if we are to secure food production to feed people both here and for growing markets overseas."
Some of the NFU’s asks to Mr Hunt include ensuring that the Environment Agency is funded to prioritise essential maintenance of flood defences and watercourses.
Another is for inheritance tax agricultural relief to ensure that all agricultural land entered into the Environmental Land Management schemes (ELMS) continue to qualify.
The NFU has also asked the government to extend the Industrial Energy Transformation Fund (IETF) to include the poultry sector.
And enhanced capital allowances to incentivise investment in a range of low-carbon capital investments must also be introduced.
Mr Bradshaw said the Chancellor had an opportunity to take actions that would boost business confidence in the UK’s food and farming industry.
He said: "By enhancing capital allowances to incentivise green investment, ensuring the Environment Agency is properly funded to limit flooding and developing a future agricultural budget he will be able to ensure the UK farming industry is a resilient and sustainable sector for years to come.”
What is the NFU asking for?
Some of the NFU’s asks of the Treasury include:
• To ensure the Environment Agency is funded to prioritise essential maintenance of flood defences and watercourses.
• To extend the Industrial Energy Transformation Fund (IETF) to include the poultry sector.
• To introduce enhanced capital allowances to incentivise investment in a range of low-carbon capital investments.
• To confirm a further round of the Rural England Prosperity Fund (REPF) to help farming businesses deliver diversification projects.
• To work on developing a future agriculture budget structured around environment, productivity and stability.
• To amend inheritance tax agricultural relief to ensure that all agricultural land entered into the Environmental Land Management schemes continue to qualify.
