‘Even if Iran war ends now, farmers’ costs will have to be passed on’
Even if Iran War Ends Now, Farmers’ Costs Will Have to Be Passed On
As the conflict in Iran escalated, fruit grower Ali Capper found herself grappling with anxiety, describing the situation as “quite sickening” for the UK farming industry. The war has disrupted the agricultural sector, particularly during its critical planting period, as expenses for fuel and fertiliser soar. Ali, representing British apple and pear growers, notes that the recent two-week ceasefire offers little relief for the current season. “No matter how quickly the war ends, the financial strain is already set in motion,” she explains.
Cost Increases in the Agricultural Sector
New data from The Andersons Centre highlights a surge in inflation for farm operating costs, with March 2023 showing over 7% higher prices than the previous year. This marks the first comprehensive analysis of the conflict’s impact on agriculture since its outbreak. The consultancy, which supports the Department for Environment, Food and Rural Affairs, warns of a continued “farming cost squeeze.” Farmers, according to the National Farmers Union, are unable to cover these rising expenses, leading to inevitable price hikes for consumers.
“We will have to pass this on,” Ali adds, emphasizing that the final decision on price increases rests with the supermarkets purchasing her produce.
Impact of Fuel and Fertiliser Prices
Ali reports that fertiliser costs have surged by 40%, while red diesel—a key fuel for tractors and heating—has risen by 100%. Transport expenses, too, have climbed by approximately 20%. These hikes are partly due to the Strait of Hormuz being a major transit route for global fertiliser supplies, which has now seen disrupted shipping during the conflict. Red diesel prices are directly linked to Brent crude, the global oil benchmark, which has spiked significantly.
Patrick Crehan, who manages fuel procurement for a consortium of 3,500 farmers, confirms the sharp increase. “Before the conflict, I was paying about 70p per litre,” he says. “Just before the ceasefire, that rose to 130p, though it has dipped slightly since Wednesday.” Crehan notes that some farmers are no longer confident in their ability to profit from the season, with several opting to avoid planting altogether.
“They’d rather not plant and save money, knowing the costs will be too high to manage,” Crehan explains.
Challenges and Uncertainty
Ben Savidge, a potato farmer in Ross-on-Wye, Herefordshire, shares the financial burden. He states that red diesel prices have increased from 65-70p to 96-105p per litre, raising planting costs by roughly £5 per tonne. While he has absorbed these expenses for now, he hopes his established relationships with customers will allow him to secure better prices later. “Last year’s dry summer hurt yields, and now energy costs are hitting us again,” he says, acknowledging the relentless pressure on margins.
With fertiliser, fuel, and energy prices at historic highs, Patrick anticipates that farmers will struggle to recover their investments. “Even if the conflict resolves soon, it’s unlikely they’ll see a profit,” he predicts. The cumulative effect of these challenges, he argues, has left the industry with little room for flexibility. As the season progresses, the burden of these costs will likely translate to higher food prices, affecting consumers nationwide.
