Farms come in all shapes and sizes, but as a farmer you control your business and make decisions every day. In the current times of uncertainty, one thing is certain, direct subsidy support in the form of area payments are reducing and being phased out in England. This is leading many farmers to consider change and place a greater emphasis on productivity and efficiency, something that has been masked historically by the comfort provided by subsidy support.
Coupled with this, is the drive for environmental improvement because of climate change, manifested in our daily lives through biodiversity, water and air quality. These are THE objectives of the nation but will have to be delivered by farmers, landowners, and land managers. This year will see a change in direction as money is released from Basic Payment into new schemes and objectives, to drive change and support best practice. It is hoped that these policies will deliver these outcomes, but they will come at a financial cost and could provide a distraction from your core business, particularly where your land or business model is not suited to these policies. This was recognised recently as the Government has released additional payments for the Sustainable Farming Incentive and increases in both revenue and capital payments for Countryside Stewardship.
These are not substitutes for Basic Payment and are not intended to be, the question to consider is do they work for your business, do they integrate, add value, allow flexibility or do they limit the potential of your business and the drive for efficiency. That is not to say they should not be embraced, and that farming sustainably, in an environmentally sensitive way by reducing carbon, but they must be considered as part of your overall business plan.
Assessing cost, risk and reward, against your objectives and the options available to you, will be different in every situation. Policy and support must form part of the answer, but not be a distraction or necessarily the reason for change. Income is driven by output and currently just under 90% of agricultural income is generated by production not from support payments. This has been brought into sharp focus over the last two years with significant rises in costs and commodity markets, demonstrating an ever greater need to produce what the market requires sustainably and at a viable cost. To deliver that farmers will require access to land they need and thus assets must not be sold off too cheaply or locked up without having an appreciation of what you require to achieve your goals.
William Young, Director at Newton LDP says: “It is clear that we are in a period of significant change, it is therefore more important than ever to understand what you have, what you want to achieve and what options may be available to you. Equally it is important not be distracted or sell off what you have too soon or too cheaply.” If you would like to discuss what options are available to you, please contact William Young at