NFU director of policy Andrew Clark gave evidence yesterday on behalf of members to the Work and Pensions Select Committee, in which he highlighted concerns over the implementation of Universal Credit.
As Universal Credit starts to replace state benefits, Mr Clark emphasised that farm profitability can only be measured over an annual timescale or longer due to irregular cash flows and difficult trading conditions.
Main concerns revolved around the application of the Minimum Income Floor, which is imposed on self-employed claimants after 12 months of trading and aims to calculate their reward.
Mr Clark said: “As farming activities are generally conducted over an annual cycle and are often dictated by seasonal constraints, most of farmers’ incomes are only received in a few months of the year.
“For those who are self-employed, profitability can fluctuate massively from month to month and continuing to implement the Minimum Income Floor on a monthly basis will disadvantage those with uneven cash flows and result in lower rewards.
“Welfare support in the form of tax credits has provided an essential safety net for some farmers in times of real difficulty, and it is essential that this support continues under Universal Credit.”