Survey results show food production must be deemed ‘vulnerable’ when Government reviews

NFU Scotland has welcomed the announcement that hard-pressed food and farming businesses are to be included in Government measures to address soaring energy costs.

NFU Scotland’s survey on electricity prices closed yesterday with more than 110 businesses sharing details on their rates and tariffs. It showed that, for nine out of ten farming families, electricity supplied to the farmhouse comes as part of the business so previous and future domestic price caps have provided no benefit or relief so far.

From a business perspective, nine out of ten farmers and crofters who replied to the survey were previously paying less than 20p per kWh for their electricity and are now having to deal with renewal rates and quotes coming in at up to 92p per kWh.  For some, that has increased bill by tens of thousands and threatens their livelihoods.

NFU Scotland President Martin Kennedy said: “At a time when many farming, crofting and food businesses are facing unprecedented increases in all input costs, we welcome the announcement that they are to benefit from some relief on energy prices.  We know many are already reducing production or restructuring their business to cope with input prices.  

“Under the proposals, energy prices will still be going up, but the package announced will limit that increase for six months with a review after three.  We will study the announcement in detail and share with our members to gauge the impact and benefit that the package will have.

“The announcement made by the Government must be effective and give these farming and food businesses confidence to go on, or food security will be undermined and prices at the shop shelf will continue to climb.

“When the review comes in three months, farm and agri-food businesses must be considered as ‘vulnerable’ and to have an extended energy cost cap beyond the proposed six months as they are a key part of the Critical National Infrastructure (CNI) – a fact previously recognised in the nation’s Covid response.  

“It is in the public’s interest that their continued operation to put food on the table be assisted by capping energy costs.  That would also help to dampen further food price inflation and be of genuine benefit to our hard-pressed consumers.

“Government and energy companies must also do more to assist those farming businesses looking at investing in renewable energy on farm in a bid to bring their own bills under control.  Help and support must be provided to allow them to generate their own electricity from renewable sources.

“NFU Scotland raised this very point with Scottish Government this week when we met with Cabinet Secretary Mairi Gougeon.  Businesses need a speedier planning process and easier connection for on farm energy production to assist with business survival and future proofing.”  
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Notes for editors

• NFU Scotland’s electricity survey received 110 responses over 2 weeks, from all regions and an extremely wide variety of sectors.
• 86.24% of respondents have their farmhouses under their business electricity supply and therefore will not benefit from the household rebate.
• 85% are on a fixed agreement, 53.64% of these are one to three-year contracts.
• 35% of respondents have renewed their contracts in 2022.
• Wide range of renewal prices/quotes ranging from 25p to 92p per kWh.
• 89% of respondents were paying under 20p per kWh in their previous contract.