Union points to larger global and energy market factors driving prices, as well as existence of already tariff-free fertliser imports
The NFU has said that removal of fertiliser tariff is likely to be of “minimal” benefit to farm businesses, saying that “much bigger factors are driving fertiliser costs”.
The union’s comments comes as Chancellor John Healey announced a series of tariff cuts 24 hours before the autumn Budget is due to be announced, tomorrow 28 October.
Select fertiliser tariffs will be cut by 2 per cent to 6.5 per cent, starting 26 November, the government announced.
Defra has said the changes will ease pressure on farmers, open up more choice and strengthen supply chains.
However, NFU president Tom Bradshaw said the cuts are “unlikely to make a meaningful difference to farm businesses or household food bills” since much larger global and energy market factors drive prices, and much of imported fertiliser already comes to the UK tariff free.
Ongoing conflict and shipping disruptions around the Strait of Hormuz continue to expose farm businesses to global price shocks.
According to the Agriculture and Horticulture Development Board (AHDB), the price of UK-produced Ammonium Nitrate reached £485 per tonne in mid-October, a 20.5 per cent increase from pre-conflict levels.
Imported Ammonium Nitrated reached £490 per tonne in the same time period, up 21.3 per cent from pre-conflict levels.
Bradshaw said: “Unfortunately, the fertiliser tariff reductions being talked about today are unlikely to make a meaningful difference to farm businesses or household food bills.”
“While it is right our government looks to strengthen its resilience by reducing tariffs on imported fertiliser, it reality much already comes to the UK tariff free,” he added.
Almost 90 per cent of the UK’s food imports are already duty free and so will be unaffected by the tariff cuts, including EU countries, Egypt and Algeria, the NFU said.
Bradshaw added: “Any impact at farm level will depend hugely on whether the products covered are those UK farmers use and whether those reductions are passed through the supply chain.
“As we have said repeatedly, strengthening domestic food production is the best way to improve food security and cost of living pressures.”
Budget calls continue
“The government still has time to back British farming and our food producers in tomorrow’s Budget,” Bradshaw continued.
Measures proposed by the NFU include ensuring the Carbon Border Adjustment Mechanism (CBAM) does not disadvantage domestic producers by increasing fertiliser costs.
Scheduled to launch in January 2027, the CBAM will place a tax on carbon emissions embodied in specific carbon-intensive goods imported to the UK.
The NFU has warned that the new tax is designed to ramp up year on year, adding ever-growing costs to fertilise at a time when farming businesses are already facing huge inflationary pressures.
Bradshaw also pointed to widening the scope of Annual Investment Allowance to support infrastructure such as reservoirs, as well as reversing changes to Agricultural Property Relief and Business Property Relief as key Budget asks.
