Farming: Harvest profits offset by record rise in costs

Farming: Harvest profits offset by record rise in costs
Belgian farmers. Credit Belga / Kurt Desplenter

It could have been a bumper year for Flemish farmers with the turnover for Flemish agriculture and horticulture expected to rise to €7.2 billion (+19%), a record according to the Boerenbond association of Flemish farmers.

However, the gains threaten being offset by a 25% increase in costs, the Belgian Farmer's Union warned in its study on the annual results of Flemish agriculture and horticulture for 2022.

If total operating costs are subtracted from total turnover, €538 million in gross margin remains for all Flemish farmers combined, Het Belang Van Limburg reports.

The Farmers' Union lamented "An absolute low... [that] leaves too little room for a fair income for the farmer, let alone a margin to invest in further sustainability."

Rising energy costs and a drought

The problems are primarily down to the explosion in operating costs which are expected to rise by 25% this year. Energy prices have also doubled; fertiliser prices also doubled compared to 2021.

In addition, the price of feed for livestock increased, fuelled by a sharp rise in the cost of cereals and other raw materials. The hot and dry summer not only largely affected the vegetable sector (potatoes, frozen vegetables, some fresh vegetables, flowers and bedding plants), but also had a major impact on livestock.

Green fodder yields suffered significantly from the drought, seeing cattle farmers forced already to dig into the feed pits for autumn and winter.

Sounding the alarm.

"The inflation that started after the corona pandemic and which exploded with Russia's invasion of Ukraine is also engulfing the Flemish agriculture and horticulture sector. As costs rise faster than yields, income is curtailed, undermining the earning model of the sector and putting the agri-food chain under high stress."

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In particular, crops that need to be heated (such as those in polytunnels) are under threat this winter, potentially resulting in empty shelves in shops. "We are facing very challenging negotiations with the buyers for a fair price for the farmers," adds the Farmers' Union.

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