The National Farmers' Union (NFU) of the U.K. has described today's budget announcement to double the rate of annual investment allowance (AIA) as "reasonably good news", but it would have liked to see more support for capital infrastructure.

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Reacting to the budget in U.K. Parliament just a few hours ago, NFU president Meurig Raymond made the comments in a union press release.

Earlier today, Chancellor of the Exchequer George Osborne made the annual Budget speech in the House of Commons which sets outs British government spending plans for the next year and details what commodities will have increases and decreases in cost.

Focusing on the agricultural-related aspects to his speech, Osborne described plans to double the rate of AIA to £500,000 (US$827,569) and extended it until 2016.

The union's president said in the release that he would have preferred a more permanent AIA, which offers investment help to farmers to buy plant machinery.

"Despite the reasonably good news on the investment allowance for plant and machinery, any incentives for capital infrastructure investment were sadly lacking in today’s budget," Raymond said.

George Osborne MP

"This is all the more frustrating given that few farming businesses are in a situation to benefit from the continued reductions in corporation tax. While the Chancellor talks about adding resilience and balance to the economy, farmers need to invest in capital items, and not just plant machinery."

The government plans to publish a long-term plan this fall focusing on doing more to protect the U.K. from flooding, including £140 million (US$231.7 million) worth of funding to help repair and restore flood defenses.

In February, www.freshfruitportal.com reported how English farming regions were severely flooded over the winter due to unprecedented heavy rainfall and the general lack of maintenance of many local rivers which had burst their banks.

"Also, with renewed interest in careers in the agri-business sector, the industry will welcome the extension to apprenticeship grants. The challenge for farming will be to get its fair share from the extra £85 million (US$140.7 million) that the Chancellor has announced," Raymond added.

"In other good news, the U.K. drinks industry will be pleased with various measures including freezing duty on Scotch whisky and cider, in which he single out weather-affected cider makers in the West Country."

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