A surge in imports is possible in the near future if UK farmers are forced out of business due to agflation.

According to a new report, rampant inflation of up to 30% in agricultural input costs, is reversing decades of falling prices and driving the UK’s farming crisis. As a result, Britain’s farming industry is likely to shrink to its lowest income level in modern times.

Furthermore, the steep drop in income, from £6bn in 2021 is forecast at £3.5bn in 2024, raises serious questions about whether policymakers are doing enough to ensure UK food security.

That was the stark warning from Duncan Swift, of accountancy firm Azets, who said: “British farming and horticulture are now being hollowed out by agflation and, as a result, we may well seeing a future surge in imports to meet domestic shortfalls as broken farmers give up.

“The trend, caused by a convergence of black-swan factors such as Russia’s invasion of Ukraine and subsequent record-high inflation, along with the phased withdrawal of farming subsidies following Brexit, is likely to exacerbate the long-term trend since 1988, where the amount of UK-originated food consumed in the UK has fallen from 66% in 1988 to 58%," he added.

“Farmers’ profit margins are being continually eroded, with cash reserves whittled down, energy prices through the roof and the cost of borrowing more expensive because of the recent interest rate increases from 0.5% in February 2022 to the current 4%. Accepting seasonality will cause the production of commodity food stuffs to peak and trough each year, the overall trend is falling domestic food production levels from UK farms," said Mr Swift.

It is also worth considering, he said, that as the UK looks to net-zero by 2050, that increased imports will cause more carbon emissions in the supply chain than if the food was homegrown. There’s also the matter of food and animal welfare standards in countries where quality and welfare standards may not be as rigorous.

Based on government figures, the UK agricultural industry which covers 71% of UK land, had 216,000 farm holdings in 2021 and employed just over 467,000 people. In 1960 there were nearly double the amount of farm holdings, which shows a rapid decline.

“You can’t suddenly switch on home-grown food production if the taps are turned off abroad because of adverse weather or geo-political reasons. We are already seeing an impact on eggs – this scaling back by the egg industry, which is also affected by the avian flu outbreak, is potentially in order of nearly one-third. Which means we face the prospect of eating many more eggs shipped in from abroad.

“Basically, because of the lead time of production of crops and livestock, there is a huge lag effect before agflation consequences fully come home to roost.

Mr Swift urged farmers facing financial hardship to seek professional advice: “That way, more options are available, rather than leaving it to that desperate point of no return."