Farming will have to bear the bulk of electricity price rises in March as the UK Government winds back the Energy Bill Relief Scheme.

The new Energy Bills Discount Scheme, which was announced this week, offers two tiers of discount for business energy bills and agriculture is expect to be at the lower rate. NFU Scotland said it was 'deeply concerned' that farming would be classified as non-high energy businesses, which will lead to increased bills for businesses not on long term tariff contracts.

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The discount scheme will replace the existing scheme created in September last year following a spike in energy prices and provided a lifeline for many farms which saw power costs multiply. The new scheme will run from April 1, 2023, to March 31, 2024 and is designed to reduce wholesale gas and electricity prices for non-domestic customers.

With farming not classified as a high-energy business sector, then farmers will only be eligible for discounts of £19.61/mWh for electricity up to a price threshold of £302/mWh, while gas will receive a discount of £6.97/mWh with a price threshold of £107/mWh.

However, high-energy users, such as food processors, will receive a discount of £89/mWh for electricity with a price threshold of £185/mWh, and £40/mWh for gas up to a price threshold of £99/mWh.

NFU Scotland said it would continue to press for businesses to be eligible for the higher rate of relief, as failure would 'condemn consumers to a further escalation in food prices'. The union’s 'intentions survey', which closed this week, will surely illustrate the significant changes already taking place within farming businesses in response to unprecedented input prices and flat-lining output prices.

NFU Scotland's president, Martin Kennedy, said having farmers potentially missing out on the highest level of support would undermine the UK's ability to produce food.

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“Support at processing and manufacturing level for electricity costs is most welcome but unless you back that up with the same level of support at farm level, then providing the raw materials for our processing and manufacturing sectors will further decline.

NFU president Minette Batters added: “We welcome some of the detail announced by the government in its Energy Bill Discount Scheme which provides recognition and further clarity for those manufacturers and processors within the wider agri-food supply chain which are vulnerable to high energy costs.

“However, it is extremely disappointing that primary food production has been overlooked, especially given the vulnerability of protected horticulture and poultry production – two sectors that are energy and trade intensive.

“The omission of horticulture is particularly regrettable, with energy prices already threatening next year’s crop of tomatoes, cucumbers and aubergines, and seems at odds with the government’s ambition to grow more fruit and vegetables as set out in the National Food Strategy.

“We accept that farming businesses can’t be insulated from the market realities, but if the government really values home-grown food production, then it must back British farming and prioritise access to affordable energy for the farming industry.”