Buried in the fine print of the Chancellor's budget statement were details of the 1ppl increase, in addition to a 0.09p/pl rise in line with inflation - both with immediate effect.

Gill stated: 'This will directly impact the bottom line costs of food production in this country. The Chancellor was making much of expanding and growing the economy. Yet, not only did he fail to make a tangible contribution towards the job of re-building a sustainable farming industry, he actually lumbered this important economic sector with an increase in costs.' There was also disappointment at the failure to provide meaningful encouragement to the UK's fledgling bio-ethanol industry. The 20ppl cut in fuel duty on bio-ethanol was described by green groups, farmers and the energy sector as insufficient to 'bump start' the industry when it was first announced by Gordon Brown in November.

Rad Thomas, the NFU's alternative crop uses chairman, expanded: 'The Chancellor recognised in his statement today that bio-ethanol has a valuable role to play in reducing pollution levels. We will continue to press for the necessary duty cut to get the industry off the ground.' The NFU, other industry bodies and environmental groups are pressing the government for an additional 6-10p/pl cut in duty on bio-ethanol in addition to the cut announced today.

The NFU welcomed the freeze in lorry excise duty and the Climate Change levy. It also congratulated Gordon Brown for setting in motion a review of and the possible abolition of unnecessary red tape that is hampering economic growth.

Proposals to extend Capital Gains Tax Business Asset Taper Relief to landowners granting tenancies was also described as useful by the NFU. It would help free up more land for rent.