Norfolk farmers urged to assess what their bottom line will look like without subsidies
PUBLISHED: 16:14 08 February 2018 | UPDATED: 16:14 08 February 2018
Norfolk farmers must pay closer attention to their bottom line and consider alternative income streams in order to adapt to an evolving financial landscape, said rural business experts.
With changes looming in the way farms are supported with public money, funding was a key topic at a spring seminar run by rural specialists from Brown and Co, held at Holt Rugby Club.
Simon Wearmouth, a partner in the firm’s Norwich office, said recent announcements from environment secretary Michael Gove proved the need for farmers to pay closer attention to their finances in the coming years, as the government aims to wean them off land-based subsidies in favour of payments which reward “public goods” such as environmental work.
“In the five years to 2024 there will be capping (of subsidies) and there will be a gradual reduction in our basic payments,” he said. “Now is the time you should be thinking about what your bottom line will look like without BPS (the Basic Payment Scheme), and about the other sources of payment available.”
Farmers attending the event were told of a range of rural grant opportunities including Countryside Productivity schemes which could fund anything from new technologies and robotics to diversifications such as glamping sites, barn conversions and farm shops.
Henry Harrison from Brown and Co also outlined opportunities from the government’s Growth Programme and the £4.5m available for rural projects in Norfolk and Suffolk through the Leader programme, distributed via Local Action Groups in the Brecks, Broads, Waveney Valley, Wensum and Coast and West Norfolk.
“This is all EU money so the agencies which distribute this money are under increasing pressure to spend it before it goes back to Europe,” he said. “So there is a lot of money out there to take advantage of.”
Agri-business consultant Abby Maynard explained the latest available options for Countryside Stewardship payments, including the new wildlife offers for arable, mixed, lowland grazing and upland farms.
She said although the schemes were designed to be less onerous, farmers should carefully consider whether this was the best option for their business, or whether to apply for the more flexible but more competitive Mid Tier scheme.
“Make sure you get appropriate advice on which scheme is best for you,” she said. “Easier is not always better.”
Andrew Fundell, a partner in the agricultural business consultancy, outlined changes in the “greening” element of the Basic Payment Scheme, which requires arable farmers to set aside 5pc of their land as “ecological focus areas” (EFAs) – or risk losing a percentage of their subsidy money.
He said the main changes announced in January included a ban on using plant protection and insecticide sprays on fallow land, field margins, cover crops or nitrogen-fixing crops, such as peas and beans, which are being used as EFAs.
“There is a complete ban on plant protection products for nitrogen-fixing crops, and the catch crops window has been extended, from August 20 to October 14,” he said.
“Fallow land is the easy option but it could be the most costly option as you are giving up the ability to farm it – and you cannot have any plant protection products on fallow land, so if you were thinking of using this as an opportunity to clean up that land if you have blackgrass, you probably won’t be able to do it.”
Mr Fundell also urged farmers fortunate enough to have received their 2017 BPS payment to check their statement closely to ensure there are no errors or undue penalties due to mapping changes.
Anne Barker, a partner in the land agency at Brown and Co, gave an outlook on the farmland market after a year in which the firm bought and sold 3,000 acres in Norfolk – with an almost even three-way split between plots valued from £6-8,000, £8-10,000 and £10-12,000.
“There is strong demand for higher quality land, but purchasers are more selective when it comes to poorer quality which is probably what has driven the variability in the market,” she said.
“I am fairly confident that variability will continue, and values will come under more pressure. So there are plenty of opportunities for buyers but for sellers it may be an opportunity to think ahead.”