The NFU has called for more support to help farmers cope with volatility as part of its questions to the Chancellor ahead of next week's Spring Budget.
In a letter to Jeremy Hunt, the union said farmers needed new “business confidence” to continue producing food in the long term.
The letter highlights the need for the Treasury to address high production costs and the impact of flooding and provide “much-needed” security for food production in the UK.
The NFU also highlighted the opportunity for the Treasury to incentivize green investment in the sector to help achieve the statutory net zero target by 2050.
Tom Bradshaw, the new president of the NFU, said: “We wrote to the Chancellor before the budget was passed [6 March] to outline the policy measures needed to help UK farmers address some urgent and ongoing challenges.
“With a 32% increase in input costs compared to 2019, more severe weather events causing flooding and crop losses, and at least a 50% cut in direct farm payments due in 2024, our food producing businesses face a difficult economic one Environment.
“Farms are businesses that produce food for the nation. Without profitability anchored in farms and thus creating a certain level of future security, it is very difficult for farmers and producers to invest in the future.
“But fundamentally this is exactly what they need to do if we want to secure food production to feed both people here and growing markets overseas.”
The NFU's demands for Mr Hunt include ensuring the Environment Agency is given funding to prioritize essential maintenance of flood defenses and watercourses.
Another option is to provide agricultural inheritance tax relief to ensure that any agricultural land included in the Environmental Land Management Schemes (ELMS) continues to qualify.
The NFU has also asked the government to expand the Industrial Energy Transformation Fund (IETF) to the poultry sector.
In addition, expanded capital allowances need to be introduced to incentivize investment in a range of low-carbon capital investments.
Mr Bradshaw said the Chancellor had an opportunity to take action that would boost business confidence in the UK's food and agricultural industry.
He said: “By increasing capital grants to incentivize green investment, ensuring the Environment Agency is adequately funded to limit flooding and by developing a future agriculture budget, he will be able to ensure that the UK agricultural industry is a resilient and sustainable sector for years to come.” ”
What does the NFU require?
The NFU's demands on the Treasury include:
• Ensure the Environment Agency is resourced to prioritize essential maintenance of flood defenses and watercourses.
• Expansion of the Industrial Energy Transformation Fund (IETF) to the poultry sector.
• Introducing increased capital allowances to incentivize investment in a range of low-carbon capital investments.
• Confirmation of a further round of the Rural England Prosperity Fund (REPF) to support agricultural businesses to implement diversification projects.
• Work to develop a future agricultural budget focused on the environment, productivity and stability.
• Modifying agricultural inheritance tax relief to ensure that all agricultural land included in environmental land management programs continues to qualify.
