Wednesday, 24 June 2015

Europe – in or out

Europe – in or out – is a hot topic and the debate is particularly important for the UK farming community.

Having just had my annual catch-up with many clients as we have completed their Basic Payment Scheme forms, there is no doubt that the mood is generally downbeat as most farmers are struggling with the impact that low commodity prices are having on their business.

So the support payments received from Europe through the CAP have once more become a very important income stream for most farmers. Whether that is a good thing is a different question, but I suspect many farmers will be relying on such payments to make a profit this year.

This is a significant change from the last few years when commodity prices were higher and the underlying farming business was able to make a profit without support from Europe. This led a number of my clients to question the need for support payments because of all the cross compliance regulations attached to them, but I hear this radical opinion less often now.

That does not take away the immense frustration many feel about the endless red tape and regulations, many of which seem to have their roots in European legislation, although whether our own government “gold plates” these rules is a moot point.

David Cameron would ease the concerns farmers about Europe if he could cut meaningless red tape, like the “greening” rules associated with the new Basic Payment Scheme.

Then there is the issue of European workers. When I started practising in Somerset more than 25 years ago I cannot remember any non-British (and very few non- Somerset) farm workers here. The contrast today is quite extraordinary, especially on intensive dairy farms where Eastern Europeans are almost the norm.

So, before any farmers vote to get out of Europe because of all the hassle associated with regulations, they need to ask themselves some serious questions.

First, would a British government of any hue provide the same level of direct payments that farmers now receive via the EU? My hunch is they would not.

Second, how would some more intensive farms staff their holdings without the availability of a European labour force? I suspect attracting a replacement British workforce would prove significantly more expensive.

Third, do you think that rules and regulations will significantly diminish if we are outside the EU? I have my doubts as we seem perfectly capable of creating our own red tape.

Fourth, if we think the playing field is uneven when we are in the EU, do we think it will get better or worse if we are outside? I don’t think this question is very difficult to answer.

Farmers who are understandably frustrated by the endless rules and regulations coming out of Europe should think twice about voting to quit the EU because our exit would herald a challenging new world for agriculture in this country.

There is an argument that these dramatic changes would benefit the industry, as it did in New Zealand some years ago, but there would undoubtedly be significant collateral damage affecting the wider farming community.  

James Stephen MRICS FAAV
Rural Practice Chartered Surveyor, Wells

T: 01749 683381

Monday, 15 June 2015

Does farming still appeal to young people?

A government survey has confirmed my view that farming does not appeal to young people with no family background in the industry.

DEFRA announced last week the results of their annual Farm Business Survey which began to collect data about farm business succession arrangements in 2013/14. The survey gathers information from a sample of around 1,900 farmers on the financial position and physical and economic performance of farm businesses in England.

The data is then weighted to represent all farm businesses that have an output of at least 25,000 euros a year. There are about 58,000 such businesses in England.

The key findings of this first survey on succession are:

  • Just over a third (37 per cent) of farm businesses had a nominated successor and unsurprisingly the vast majority of these businesses will continue within the family.
  • Of the other business that responded, 29 per cent said it was too early in family or business circumstances to answer who would become the nominated successor. This response was most common for farmers under 40 years of age which can hardly be surprising as they probably have only just succeeded their father.
  • A further 27 per cent of farm businesses said they had no nominated successor. This response was most likely for spare and part-time farms and for sole traders.
  • Only six per cent of the nominated successors would be new to farming.

This latter finding is perhaps the most telling and one that politicians and farm leaders need to heed. Whenever I go to talks where government ministers or policy makers are present, there always seems to be emphasis on how to get “new entrants” in to farming.

This is largely pie in the sky and although it is perfectly possible for college leavers to become farm workers or farm managers, I think the chances of a person who does not come from a farming background, becoming a full-time farmer in their own right is slim and the results of this survey bear this out.

I am not saying that there is no chance of a new entrant developing a career in agriculture, but building up an owner occupied or even tenanted farming business in one’s own right is very difficult unless one has the resources of an existing farming business behind you or the availability of a lot of capital from outside farming.

Perhaps the emphasis should be more on how to ensure the next generation of successors to our existing farming businesses are best trained and equipped to tackle the economic challenges that lie ahead, rather than encouraging new entrants to enter a world where in reality the opportunities in mainstream farming are contracting rather than expanding.  

James Stephen MRICS FAAV
Rural Practice Chartered Surveyor, Wells

T: 01749 683381

Friday, 5 June 2015

Only Rupert Cox has my full confidence

Today I tell a tale of two citizens.

Both have key rural roles but only Rupert Cox has my full confidence.

This year’s Royal Bath & West Show was the first held under his direction and congratulations must go to Rupert and his team for putting on a great event.

As chief executive of the Somerset Chambers of Commerce for the previous nine years, Rupert has brought a wealth of experience of membership organisations, event management, political acumen and, most importantly accomplished leadership skills.

Rupert is also steeped in rural life as a farmer’s son with a 20-year career in agriculture before takinga change in direction in 2000, first working for the Federation of Small Business.

On taking on his new role in January Rupert said: “I am honoured to have been appointed the chief executive of the Royal Bath & West of England Society. Who would have thought that when I started stewarding in the sheep section of the Bath & West Show as a teenager 35 years ago, I would return to lead this iconic and highly regarded institution?”

He is deeply committed to the important role the Bath and West Show plays in bringing consumers and producers closer together while demonstrating the process from field to fork.

This is particularly important now with the problems farmers are facing as commodity prices remain low, so I was pleased to see Liz Truss, the Secretary of State for DEFRA, visit the show.

However it was disappointing to hear from many that she did not seem as committed to the needs of the farming industry as her predecessor, Owen Patterson, who David Cameron sacked last year.

This impression may be unfair, but as one of my colleagues who saw her at the show said: “She did not seem to want to look anyone in the eye when she was talking to them”, which never leads to a great feeling of confidence.

I just hope this impression of the minister is wrong and that she proves supportive of an industry which is being battered by low commodity prices abroad and an imbalance of power between the supermarkets and their farming suppliers at home.

James Stephen MRICS FAAV
Rural Practice Chartered Surveyor, Wells

T: 01749 683381