Farmers point out pre-Budget limitations

The government's pre-Budget report has "limited value" in terms of helping agriculture drive forward economic recovery, said farming leaders this week.

The National Farmers' Union said that Alistair Darling's package - which includes a comprehensive set of measures designed to boost short-term household income, spending and business - contains a number of welcome provisions, but largely bypasses the measurements that would have set farming in good stead during the downturn.

NFU president Peter Kendall said it was unlikely that the proposals contained in the pre-Budget report would boost the overall competitiveness of UK agriculture and the agri-food sector.

"There are a number of commendable parts to the Chancellor's statement, together with some matters of concern, but several missed opportunities," he said.

Kendall praised the government for trying to boost small and medium-sized enterprises as a cornerstone to economic recovery, adding that farming is an integral part of the SME community.

"We welcome proposals for a temporary tax relief on vacant property, to delay the payment of tax bills, to introduce a substantial small business finance scheme and allowing SMEs to offset losses against profits made in the past three years," he said.

He also welcomed proposals to decrease the rate of increase of higher Vehicle Excise Duty (VED) for 4x4s and the extension of the renewables obligation, but pointed out that there is still a lack of incentives to encourage farmers to invest in environmentally beneficial capital works.

Kendall concluded that although the government must play a "decisive" role in stimulating economic recovery, it is industry that will be the driving force.

"Farming can play an appreciable part in this, provided it is not encumbered by unnecessary regulatory burdens, has the backing of the banking sector and a much greater appreciation from its retail customers," he said.

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