Rural sector suffers downturn

The rural sector in Kent suffered a decline in turnover last year as supermarkets squeezed prices on suppliers – but improved profits as technology reduced labour costs.

Revenues in agriculture and horticulture across the county fell 6% to £476 million last year despite a 23% boost to EU subsidies to about £44.4 million following the fall in the value of sterling.

Turnover is down 18% since 2013, according to research by pressure group Rural plc Kent.

The rural sector in Kent suffered a fall in turnover last year.

Director Mark Lumsdon-Taylor, who is deputy chief executive and principal of Hadlow Group, said: “Prices are being squeezed. The rate of return suppliers have had have been less positive over the last year than the year before.

“Supermarkets have been applying a price squeeze on their suppliers over the last 12 months.”

He also blamed the fall in turnover on a consolidation in the rural market “principally in the arable farming industry”. “The dairy sector went through that a few years ago when the price more than halved,” he added.

Despite the drop in income, the rural sector nearly doubled pre-tax profits to £55.1 million compared to 2016, although it is still less than half the £142.3 million surplus of 2013.

This came as the sector reduced costs. Rural plc Kent chairman Mike Bax said: “Costs were down due to reduced food and fertiliser prices but also because businesses have been forced to get leaner and meaner every year.”