By MICHAEL POLLITT, EDP RURAL AFFAIRS EDITOR

Farming costs have soared by a "staggering" 17pc in the past six months, the country's largest farm buying group warned last night.

Anglia Farmers, which spends about £125m a year for 1,500 farmers and growers, said that overall agricultural inflation was 16.65pc since last September.

North Norfolk farmer Jim Alston, who is a director of the co-operative buying group based at Keswick, near Norwich, said that the latest half-year inflation figure was a good guide to the likely annual rate of increase.

"This is quite staggering and just shows the real extent of the cost pressure on all sectors of the farming industry," said Mr Alston, who is co-ordinating the AF Ag Inflation index. "Over 18 months the increase becomes a frightening 24pc."

The index is based on changes of 76 products bought by its members farming about one million acres of land.

Two of the fastest-rising products have included fertiliser, which has risen by more than two-thirds, and fuel by close to a third.

"We have calculated the impact on the prudent buyer so we have used a weighted formula to show the rate of inflation," said Mr Alston, of Manor Farm, Calthorpe, near Aylsham.

He said that many suppliers, who were nervous about increasing prices a year ago, had been able to secure significant price rises.

The index represents part of the overall costs ranging from a tonne of Cocktail seed barley to the price for 100 fence posts.

"Each item is weighted so that its influence on the overall figure is representative of its part within the industry. Since fertiliser is weighted to provide 11pc of the overall index it is clear that it is far from being the only contributor.

"As far as the index is concerned, the price taken for comparison is not the price on March 31 as this would not be the action of a prudent farmer.

"The price taken is intended to represent a bulk purchase made at an opportune time during the period. As the price of all grades of fertiliser has continued to rise since, I expect the annual figure will show an even greater rise," said arable farmer Mr Alston.

The half-year inflation rate was 16.65pc while the annual rate was 7.1pc in the year to October. The key cost rises were - seed 9.6pc, fertiliser 67.4pc, chemicals 2.1pc, animal costs 44.8pc, machinery 7.1pc and fuel 29.8pc.

Mr Alston also said that a year ago, some prices were falling including fuel and agrochemicals. "While some parts of UK agriculture have seen a rise in income that helps to cover rising costs, other parts of the industry have not and these levels of increased costs will have significant effect if not covered by increased income. As before the hardest hit has been dairying due in the main to the sharp rise in feed costs."

Driven by a combination of global demand and supply shortages, fertiliser prices have risen from £140 a tonne a year ago to more than £240 for some grades and specialist grades from £290 to more than £600.

"While there is a possibility that prices will settle down following these large price hikes, history tells us that price falls are unlikely and if global demand for more food and agricultural-based fuel continues, further rises may occur," he added.

Whilst these are not identical to the costs experienced by poultry farmers, there are many similarities!