Pig industry “perilously close to collapse” without government aid
In a joint letter to Defra Secretary George Eustice MP, the National Pig Association and the National Farmers Union detailed the financial crisis facing the sector and called for urgent, direct support for producers.
The letter from NPA chairman Rob Mutimer and NFU president Minette Batters thanked George Eustice, Farming Minister Victoria Prentis and Defra officials for the support they have given to the industry in recent months.
However, the trade bodies stressed that the invasion of Ukraine had moved the sector “from a very challenging financial situation to a critical one from which we fear many will not recover.”
The letter asks that the UK government reconsider a previous request by the trade bodies for a financial support package to be made available to pig farmers at the earliest opportunity, similar to those offered by the devolved administrations in Scotland and Northern Ireland and other European countries.
£250 million lost to labour shortages
NPA said that members’ costs of production are now over £2/kg, as wheat prices have soared on the back of the Ukraine war, alongside rising energy and fertiliser prices in Q1. It reported that many members are now losing in excess of £50 per pig on average because of “ineffective pricing, penalties and rising input costs.”
The trade body estimates that around £250 million was lost last year within the British pig sector due to the ongoing labour shortages in the processing sector. For many small family farms, there simply isn’t the financial headroom to absorb any additional shocks in an industry, the letter adds.
“Some have already taken the decision to leave the industry with 43,000 sows being removed and others are now seriously considering it. There are those too who want to retire but cannot, as the income from the pigs is the only way they can pay off their debts,” the letter said.
“It is, therefore, vital that action is taken swiftly to support farmers whilst processors work through the rest of their backlogs.
“Pressure also needs to be applied to the processing sector to continue to encourage increased throughput and fair prices, ensuring that the backlog is dealt with as soon as possible and limit any further impacts on the farming sector.”
Legal action required
The Defra Secretary has been urged to use the powers in section 21 of the Agriculture Act that enables support to be provided to agricultural producers in England whose incomes are being, or are likely to be, adversely affected by the exceptional market conditions.
“The most severe impacts on incomes resulting from the adverse market conditions are not being felt by the processors, but by the farmers,” the letter says.
“However, even though government has acknowledged that there are adverse market conditions affecting the sector, and that financial support is needed to address this, no direct support has yet been offered to farmers, despite the fact that their incomes are the most severely affected by this issue.”
The letter continues: “This position is becoming increasingly untenable as the support offered to processors to try to resolve the issue has failed to alleviate the adverse impacts on farm incomes resulting from the situation.”
“Perilously close to collapse”
NPA added that other nations, competing in the same markets, have supported their own pig sectors. The Scottish Government has introduced two packages, including a ‘Pig Producers Hardship Support Scheme’, totalling £1.4 million and in Northern Ireland a similar compensation package has allowed pig farmers to access £3.6 million in emergency funding.
Other countries across Europe are using the EU temporary state aid framework to provide direct support for pig producers, including Belgium, France, Ireland, the Netherlands and Poland.
“We cannot overstate the urgency of the situation, as our sector is now more than ever, perilously close to collapse and we look forward to your timely response,” the letter concludes.
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