Farmer confidence has hit historically low levels, bypassing the record lows set last year, as Defra's closure of the Sustainable Farming Incentive (SFI) deals another blow to the industry.
The previous Conservative government received deep criticism when last year’s farmer confidence survey showed that short-term confidence had deteriorated to -25 and mid-term confidence to -22.
This year, short-term confidence has fallen by another 10 points to -35 and mid-term confidence has dropped by 16 points to a worrying -38.
This has created a new all-time low since the NFU launched its survey 15 years ago.
If the survey were taken again today, it’s expected this would drop even further after Defra’s sudden announcement earlier this week slammed the door shut for farmers who were planning to access the SFI scheme.
This comes on top of an ongoing cashflow crisis and the controversial autumn budget, which announced the farm inheritance tax, again widely unexpected by the industry.
The new rules, which have triggered dozens of protests across the UK, including four times in London, will see the full 100% relief from inheritance tax restricted to the first £1m of combined agricultural and business property, from April 2026.
Farmers have also seen an increase in employer National Insurance (NI) contributions, and the acceleration of the direct payments phaseout.
The NFU's survey also showed that, for the first time ever, investment across the board is drying up with farmers not able to make investments in key areas, creating a significant barrier to growth.
The SFI news, made by Defra without prior warning on Tuesday evening (11 March), would only exacerbate cashflow issues and farmers’ capability to invest, the union warned.
NFU president Tom Bradshaw said: “When our survey results came out last year, we thought we’d hit rock bottom. When we were initially looking to release our survey results today, we knew we’d hit a new all-time low.
"Now, with another hammer blow dealt to the farming sector without warning last night, I’m realising there is no such thing as rock bottom as far as Defra is concerned.
“Business confidence was already low. Now we are in situation where the farming community has no confidence in the government.”
The NFU's confidence survey revealed that 85% of farmers believe the reforms to inheritance tax would increase their liability, with 32% saying they plan to reduce investment to mitigate this increase.
Meanwhile, the vast majority (88%) of respondents said the phasing out of direct payments would negatively impact their business.
And three-quarters (76%) of employers expect to be impacted by the increase in employers National Insurance contributions.
Because of this increase, 65% said they expect a reduction in profits, while just under half (43%) expect to reduce investment to offset these additional costs.
Regulation and legislation also remain a key issue, with a clear majority (84%) of respondents saying they would continue to negatively impact their businesses.
Mr Bradshaw concluded: “Last year Defra closed applications for Capital Grants, grants that are used for important environmental work, with no notice, leaving farm businesses in the lurch.
"Last year this government promised us they wouldn’t introduce a tax on family farms upon death, but they did, leaving many farming families without hope for the future.
"And now they are taking away direct payments – faster than they originally promised – leaving farmers with no alternative scheme to plug the financial hole they find themselves with.
“No business can be expected to plan, invest, grow and increase its economic contribution, whilst hitting government environmental targets, when it is being slammed time and time again by policies which strip away its profitability."
