Record diesel prices strengthen case for farming support at Budget
Record diesel prices are increasing pressure on farm businesses, reinforcing the NFU’s Budget asks and highlighting the importance of domestic food-production resilience.
The NFU is urging the government to use the upcoming Budget to ease pressure on farm businesses as record diesel prices add to an already challenging year for British food production.
UK diesel was averaging a record £2.00 per litre at the time of writing, driven by disruption to global energy supplies and continuing conflict in the Middle East.
The EU and G7 countries have announced plans to release 100 million barrels of emergency diesel and crude oil reserves onto the market over four months, offering some hope that pressure on prices could ease.
However, the NFU has warned that fuel remains a significant and unavoidable cost for farming, food production and the wider supply chain.
NFU Deputy President Paul Tompkins said fuel was a core part of the cost base for farming and growing and further price rises would intensify cashflow pressures on farm businesses already dealing with the effects of a hugely challenging 2026.
“Red diesel is the primary fuel for agricultural vehicles which are crucial in producing the nation’s food. As fuel prices rise again due to geopolitical events, so does the financial strain for British farm businesses.”
NFU Deputy President Paul Tompkins
Steps to ease financial pressures
“Red diesel is the primary fuel for agricultural vehicles which are crucial in producing the nation’s food," Paul said. "As fuel prices rise again due to geopolitical events, so does the financial strain for British farm businesses.
“These increasing costs come at an already incredibly difficult time for farmers and growers, with this summer’s drought having significantly impacted cashflow and confidence.
“We welcomed the government’s decision to freeze the planned rise in fuel duty earlier this year, but steps can still be taken to ease financial pressures.
“This includes backing the Keep Britain Growing Loan, a temporary, interest-free loan to help farm businesses hardest hit by this summer’s challenges to continue producing food next year, one of five key priorities the NFU is urging the government to consider ahead of the upcoming Budget.
“We remain in frequent contact with Defra about the current fuel situation and the vital role diesel plays in farming and food production.”
Building confidence in British food production
The NFU said volatile fuel prices demonstrated why the government must strengthen the resilience of British food production and give farmers greater confidence to invest.
Speaking to BBC Radio 4’s flagship The World Tonight programme in September, Paul said the red diesel concerns made measures to boost confidence in the food production sector at this month’s budget even more pressing. He called for food production to be a priority there.
“We need to really consider what food production means for this nation’s foundations of security, and what the implications of further increases to farming’s cost base mean for us all,” he said.
“What can we look at in our food production system that enables those additional costs not to be passed to the consumer?”
He said the Budget provided an opportunity for the government to underpin domestic food production and rebuild confidence among farmers and growers.
The NFU’s proposed measures include increasing and extending the Annual Investment Allowance and capital allowances, reversing changes to agricultural inheritance tax and pausing the introduction of the Carbon Border Adjustment Mechanism.
“Measures like that will rebuild confidence in our farming community and allow us to continue producing our food.”
