Report: Skyrocketing costs hampering UK farmers’ ability to take climate action

Pictured: A sheep farmer in the Yorkshire Dales. Stock image.

That is according to new research published by NatWest today (25 August). The bank polled more than 250 decision-makers at agricultural businesses of a range of sizes across the UK.

Almost all of the professionals polled, 99%, said they had seen the cost of at least one of their key inputs increasing significantly above the UK’s inflation rate this year. Two-thirds are dealing with significantly higher fuel bills, while around half are recording dramatic increases in feed and/or fertiliser costs.

The Agriculture and Horticulture Development Board stated in May that the price of UK-made ammonia nitrate fertiliser had increased by 152% within a year. For imported product, the rise was even steeper, at 177%. Other common types of fertiliser had also undergone significant cost increases, more than doubling, within that 12-month period. The Board also recorded a 15.6% year-on-year increase in concentrated animal feed prices.

As a result of these increased costs, a significant minority – 37% – say they are not going to be able to deliver the initiatives they had planned in the near term to reduce greenhouse gas emissions and improve climate resilience.

Natwest found that the most common actions which had been planned by farmers in this field were generating or procuring more renewable energy (planned by 57% of survey respondents), improving energy efficiency (54%) and switching energy supplier (49%). Many of these initiatives will now be put on the back burner.

Crucially, the survey found that most farmers (88%) are concerned about climate impacts, present and future, on their business and the wider industry. A similar portion (82%) would say they feel frustration or guilt about not being able to reduce emissions and build in resilience more rapidly. These findings stand in contrast to much mainstream media coverage at present, pitting farmers and environmentalists against each other.

In response to these trends, NatWest has launched a new £1.25bn package for the agriculture sector. The sector-specific package will be allocated to projects that will improve environmental sustainability on farms. Additionally, it is developing an agriculture-sector-specific tool under its carbon planner, which helps businesses to measure their emissions.

NatWest’s head of agriculture Ian Burrow said: “We are aware that our customers within the sector are keen to take action against climate change and many have already – for instance, changing cultivation practices to minimum tillage or no-till, growing cover crops, growing mixed-species grass swards, challenging themselves to improve the productivity of their livestock enterprises, precision applications of fertiliser, and using organic manure more effectively along with planting trees and hedgerows.

“But we need all in the sector to challenge themselves as to the part they can play in a more regenerative, restorative and reparative way of working. However, the challenge of input cost rising squeezing margins is currently hampering efforts.”

The Climate Change Committee’s (CCC) recent annual progress report to Parliament stated that there have been “major failures in delivery programmes” relating to schemes intended to accelerate climate action in the UK’s agriculture sector, including delays to – and confusion around – post-Brexit farmer incentive schemes. You can read edie’s in-depth explainer of the report’s key findings and recommendations here.

Earlier this year, NatWest published its own whitepaper outlining recommendations for interventions for a sustainable agriculture system operating within the UK’s upcoming carbon budgets. From policymakers, that whitepaper urged a more joined-up approach that covers all parts of the food system and fosters greater collaboration between biodiversity experts, academics, tech experts, agriculture workers and the energy system. Specifically, it called on the Government to agree on a common set of metrics and measurements for outcomes for changes in farming practices, and to provide more clarity on funding mechanisms and financial incentives.

Comments (1)

  1. Richard Phillips says:

    Energy price rises.
    I find it difficult to conceive how it has suddenly become so much more expensive to take natural gas from a hole in the ground.
    I have a sneaky feeling that somewhere, someone, is making a great deal of money.
    But I could of course be quite mistaken, and it is all for our own good!!!
    Richard Phillips

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