NFU gives evidence on price volatility

phil bicknell

The NFU has given evidence to a group of Peers on how agricultural price volatility impacts farm businesses.

Head of food and farming Phil Bicknell appeared before the House of Lords Energy and Environment Sub-Committee as part of its enquiry into market prices and wider resilience among farmers.

It follows a similar enquiry being held by MPs on the House of Commons Efra Select Committee into farmgate prices.

With volatility characterising most agricultural markets, and the associated pressures on cash flow, profitability and long term business planning, the committee heard about the challenges of price volatility faced by NFU members.

Mr Bicknell emphasised that sustained price volatility risks the viability of farm businesses, leads to reduced investment levels, and is a challenge for the whole food supply chain rather than just a farming issue.

He said: “Volatility is an ever increasing characteristic of agricultural markets, particularly as we’ve seen farm policy back away from market management and control to less market-distorting policy tools.

“There are solutions available that can help farmers including longer term contracts, futures, and producer organisations – but these all need a whole supply chain approach.

“Farming is a very resilient industry. Our industry is made up of farmers who are past masters at dealing with anything that’s thrown at them - whether that’s periods of low prices or the recent devastating floods that hit farming communities in Northern England.

“But it’s important that we’re an industry that thrives rather than just survives and is geared up for future food production. A boom and bust cycle of prices benefits can be damaging in the long run.

“We will continue to speak to people at the heart of Government – as well as in Brussels - the ones who make the big decisions – to make sure our voice is heard in the corridors of power.”

Last edited on: 16:12:2015

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