Penny yet to drop with Government on electricity price impact

When it comes to Government appreciation of the impact that the cost of energy is having on business viability, the ‘penny hasn’t dropped’ according to NFU Scotland President Martin Kennedy.

The huge surge in cost of electricity is affecting every individual and household but when it comes to the impact on businesses, particularly those required to deliver food security and guaranteed food supply, there must be greater Government understanding of what these price increases will mean. Immediate action on electricity prices is needed for all households and businesses.

Last week we were told of one Scottish vegetable grower who will see his current electricity tariff of around 12p per unit run out at the end of September. He was quoted 71p per unit for a new contract which meant his electricity bill for the year, primarily to cool and store his potatoes and vegetables, ensuring they could be supplied throughout the autumn and winter, would jump from around £140,000 to over £800,000, which is completely unsustainable.

This price hike, on top of serious issues around the availability and cost of labour, other big input price increases and a supply chain where prices aren't keeping pace with the cost of production makes the decision really simple.  Amid a food security crisis, he will just stop growing.

This is very typical of many farms now making decisions on how to make ends meet, and these decisions all point to a significant contraction in supply of food to feed ourselves.  Unless something is done to address this quickly, we will be in serious short supply of home grown produce.

Some politicians, civil servants and representatives of the retailers have suggested that the solution may be simply importing our way out of the crisis.  But will the food be there to import. Other countries are facing the same production pressures as us.  And the drought in Europe is devastating crops.  Given food security is now a global issue it’s incumbent upon us to maintain our food production.

That will not only feed ourselves but maintain our wider economy which is so reliant on agriculture.

So, what is the solution? We are asking the UK Government to recognise the need to address food security concerns by:

  • Immediately ensuring affordable electricity is available to all households and businesses
  • Investigate the pricing structures within the energy market to show transparency and illustrate why some are making unprecedented levels of profit
  • Maximise production of home-produced electricity.

Inflation is now currently running at 10.1% however ‘aginflation’ – the rise in costs that farmers face for their key inputs - is well over 30% with some products, for example fertiliser, nearer 300%.

We are encouraging MPs to visit farms to see first-hand the detrimental impact that huge electricity bills will have on future food production decisions.

It is up to the Government to act on electricity prices now in the best interest of all our businesses - and ultimately all our consumers.  Acting now on electricity prices for food and farm businesses will help with food price inflation and keep home-produced food on everyone’s plates.

Author: Martin Kennedy

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Andrew Moir

607 days ago

Yes a reality check required but politicians memory’s are painfully short.
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About The Author

Martin Kennedy

Martin is a tenant farmer in Aberfeldy, Highland Perthshire and farms with his wife Jane and three daughters. They have 600 ewes and 60 cows on the farm rising from 800ft to 2,500ft. Martin served two years as Highland Perthshire Branch chair, before representing East Central region on the LFA committee in 2009. Martin went on to be Vice-Chair before chairing the committee for three years. He was elected Vice-President in 2017 and elected as President in 2021.

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