Farmer profitability and market volatility
Wednesday, 1 April, 2015
The Union has a long standing concern about farmer profitability across all sectors and that farmer profit margins are routinely squeezed by partners further up the supply chain, such as processors and retailers. We have always called for farmers to be paid a fair price and regularly meet with retailers and processors to press them on this issue.
The Union continues to fight for a fairer supply chain with better communication and more transparency in relation to things like pricing structures and specifications and for the establishment of a single integrated supply chain where all partners are profitable.
The UFU has tabled proposals to both the NI Agriculture Minister, the UK Agriculture Minister and local banks for the introduction of 'capital holidays' for structured load repayments; increased awareness about the existing accounting practice of 'profit averaging' (where presently for two consecutive year are added together and divided by two but ROI have recently extended this to five years and we would like to see that done in NI as well); also the introduction of a Farm Management Deposit Scheme, similar to the one currently operating in Australia, to assist primary producers in effectively dealing with fluctuations in their farm business cash flows.
In the March 2015 UK Budget statement Chancellor George Osborne announced that farmers will be able to average profits over five years, up from the previous allocation of two. This is very welcome news and is something the UFU had been lobbying for at a local and national level for some time.