Industry trade bodies have called on the Chancellor ahead of the Spring Budget on Wednesday 6th March to provide support to food and farming businesses.

In a letter to Chancellor Jeremy Hunt, the NFU highlighted the opportunity for HM Treasury to “unlock and incentivise” green investment in the industry, which NFU said is “essential” to help meet the Government legislated net zero by 2050 target while addressing high production costs, the impacts of flooding and providing much-needed long-term certainty for domestic food production.

NFU president Tom Bradshaw said: “In a time of much change it is vital that our country’s food producers have the business confidence to continue producing climate-friendly, nutritious food long-term. That is why we have written to the Chancellor ahead of the budget to outline the key policies needed to help UK farmers and growers through some pressing and ongoing challenges.

“With on farm input costs up 32% from 2019, more regular and severe weather events causing devastating flooding and crop losses, and with at least 50% reduction in direct farm payment support due in 2024, our food producing businesses are facing a challenging economic backdrop.

“First and foremost, farms are businesses there to produce food for the nation. Without profitability built into farm businesses to create some certainty ahead, it is very difficult for farmers and growers to invest in the future.

“But fundamentally this is exactly what they must do to if we are to secure food production to feed people both here and for growing market overseas.

“As the UK’s largest manufacturing sector, worth more than £120 billion to the nation’s economy, the Chancellor has an opportunity to take actions that will boost business confidence in the UK’s food and farming industry.

“By enhancing capital allowances to incentivise green investment, ensuring the Environment Agency is properly funded to limit flooding and developing a future agricultural budget he will be able to ensure the UK farming industry is a resilient and sustainable sector for years to come.”

Driving growth, productivity and sustainability

The Food and Drink Federation (FDF) sent a representation to the Chancellor, focusing on driving growth and productivity in the UK’s largest manufacturing sector and creating a sustainable food system.

To “drive growth and productivity”, the FDF asked the Chancellor to ensure the Food Standards Agency (FSA) is sufficiently funded, as well as broaden the eligibility criteria and accessibility of R&D tax credits and grants to incentivise healthier product innovation.

It also called for the Chancellor to:

  • Establish a UK-wide Reformulation for Health Programme
  • Target financial incentives through food and drink manufacturing to increase the uptake of robotics, automation and digital technologies
  • Reform the Apprenticeship Levy to allow use of levy funds on shorter, modular training
  • Make ‘not for EU’ labelling optional in Great Britain rather than mandatory
  • Work with the FDF to set up a dedicated UK trade information portal to support SMEs
  • Deliver the UK’s Single Trade Window (STW) in a timely manner, using international best practice.

On the topic of creating a sustainable food system, the FDF urged Government to:

  • Simplify the application process and increase future budget of the Industrial Energy Transformation Fund (IETF)
  • Expediate the consultation process on the future phase of the Climate Change Agreements and include decarbonisation in future targets
  • Work with industry to deliver a world-leading Extended Producer Responsibility (EPR) scheme
  • Set out a timeframe for implementing consistent collections in England (with equivalent policies in the Devolved Nations) by October 2025, including plastic films collections by no later than March 2027
  • HMRC to allow mass balance accounting to unlock investment in chemical recycling
  • UK Deposit Return Scheme (DRS) must go ahead as soon as practically possible with alignment on scope and date across UK.