LONDON - In recent talks, Bank of England Governor Andrew Bailey and National Farmers' Union (NFU) President Minette Batters outlined the significant challenges facing UK agriculture, linking rising global food prices to increased energy costs. At the NFU’s Henry Plumb Memorial Lecture today, Bailey pinpointed the heightened energy expenses within agriculture as a key driver of over a percentage point increase in food inflation. He underscored the impact of the conflict in Ukraine with Russia, a major agricultural producer, on the global economy and UK farming issues like labor shortages and extreme weather events.
Batters echoed Bailey's concerns today, pointing out a 33% rise in agricultural input costs over the past four years, primarily due to soaring energy and fertilizer prices. With an election looming, she emphasized the need for policy revisions to address long-term energy contracts and market transparency as part of the Autumn Statement considerations. Batters highlighted how escalating food inflation disproportionately affects low-income families and advocated for government interventions to ensure access to affordable, nutritious, and environmentally sustainable foods.
Both leaders expressed concerns about the phasing out of farming support payments, which is undermining business confidence among UK farmers. Batters called for commitment from political leaders to policies that strengthen domestic food security and support British farming during this period of transition. Bailey's insights were informed by his visit to a Devon dairy farm, where he gained firsthand understanding of the agricultural challenges, including a historic low wheat harvest in 2020 due to adverse weather conditions.
The calls for action come at a critical time for the agricultural sector as it navigates through uncertainties exacerbated by geopolitical tensions and domestic policy changes.
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