THE NFU has welcomed the Chancellor's pre-budget statement - up to a point.

A 3p/litre cut in diesel, the abolition of road tax for tractors and a freeze in fuel duty are all positive steps to help farmers, said NFU President Ben Gill, who farms near Easingwold.

Freezing rates on red diesel, used in on-farm machinery, and a 2p/litre cut in low sulphur petrol will all bring benefits to hard-pressed farming communities, he added.

While welcoming many of the points made by the Chancellor, Mr Gill expressed his fears that some farmers, hit by plummeting prices, spiralling costs and the recent bad weather, would still feel frustration that Gordon Brown had not offered a larger cut in fuel taxes.

Mr Gill said he was pleased that the statement took on board some of the key points of an NFU submission to the Treasury, put forward with the Freight Transport Association.

Reform of the Vehicle Excise Duty rates for lorries, a scheme for foreign lorries to pay to use Britain's roads and a road tax cut for smaller vehicles, were all requested by the NFU.

Mr Gill said: "It is clear the Chancellor has listened to our case on many points.

"However, the total cost of keeping a truck on the road in the UK still remains the highest in Europe, over three times the level in some European countries.

"This higher cost base which is passed back to farmers means that the competitive position of the food industry in Europe remains extremely poor."