I came away from the Andersons farm business consultants’ annual seminar on the outlook for UK agriculture with the gloomy message that things are very difficult for most sectors but most worrying is the plight of our dairy farmers.
Andersons predict little prospect of improvement for at least another year as milk prices continue to fall at an alarming rate for the 80 per cent of dairy farmers not on “supermarket-aligned contracts”.
Some of these farmers are lucky that for one reason or another they have been able to secure one of the supermarket contracts where they are effectively paid a milk price related to the cost of production rather than one based on the market price.
As a consequence the supermarket contracts are offering about 30p per litre but the other 80 per cent of farmers are receiving between 20 and 24p. The milk price being paid to these farmers is influenced by world milk commodity markets where supply exceeds demand.
Of course the market will one day right itself but not before the fundamentals have rebalanced and that will inevitably mean yet more dairy farmers having to leave the industry.
This depressing picture was reinforced by a leading dairy analyst, Chris Walkland at an NFU conference in Birmingham where he warned of a “spring tsunami of milk bringing more price pain” and said: “It is going to be pretty horrendous over the next three months.”
Walkland went on to predict the spot price for milk is likely to drop to around 10p per litre later this spring/early summer and as a result the total income for milk in April, May and June this year is predicted to be down by approaching 40 per cent on the peak seen only two years ago.
So why would anyone want to continue dairy farming at all? The answer is that some farmers are still making money, particularly those on the supermarket contracts and if you look back over say five years most dairy farmers will have seen good profits at times.
And this is perhaps how dairy farmers need to budget, looking at five years rather than just one year but at the same time recognising that the current crisis has to be survived. If that is not possible, then difficult decisions need to be made sooner rather than later because milk prices are unlikely to fundamentally improve for at least a year.
James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk
A property blog written and authored by our specialist blogging team, discussing all and any matter relating to the residential, rural and commercial property markets.
Showing posts with label rural agency. Show all posts
Showing posts with label rural agency. Show all posts
Monday, 14 March 2016
Wednesday, 13 January 2016
Goodbye and good riddance
Goodbye and good riddance: 2015 has been a year to forget for most farmers. The bright side has probably been the weather helping crops grow well and producing record harvests for many, which was just as well because crop prices tumbled.
To put this in to context, the value of feed wheat has fallen from around £130/tonne a year ago to around £105/t just before Christmas. This is a drop of nearly 20 per cent and with costs of production running at around £130/t it is not difficult to do the maths.
In the livestock sector, sheep farmers had a particularly difficult year as lamb prices fell away sharply in the spring and summer with many lambs being sold at around £60/head compared to £80-£90/head the year before. This has led to very challenging times which still remain with lamb prices now about 50p per kg lower than a year ago.
Beef prices became more stable in 2015 but that followed big price falls in 2014 and so some respite was welcome. But even so prices have eased with finished cattle prices currently down around 15p/kg compared to this time last year.
However, the headline grabbing news has been the sustained and dramatic fall in milk price which is keeping many dairy farmers under pressure. In this area we are luckier than some as very few of our farmers are signed up with the worst hit milk purchasers such as First Milk where their producers are receiving not much more than 17p/litre.
Even so, many of our local farmers are receiving only around 22 or 23p/litre which is well below the average cost of production, resulting in widespread financial problems.
But, unlike other agricultural sectors where the value of the product being produced is similar for most farmers in that sector, the price dairy farmers are paid for their milk varies widely, being dependent on the milk supply contract any particular farmer has been able to secure. As a result there are dairy farmers on supermarket aligned contracts who are still receiving around 30p/litre which is almost twice as much as those on the worst contracts.
This means that the fortunes of two seemingly similar neighbouring dairy farmers can vary widely but in reality the majority are not on the best contracts and are suffering badly. Unfortunately there is little sign that prices will improve dramatically in the short to medium term and so the gloomy theme of 2015 seems likely to continue in 2016.
The only ray of sunshine is the fall in other costs of production such as feed and fuel bills, but in many ways these simply reflect the worldwide fall in commodity prices across the board which are the main reason farmers around the world are feeling the pinch.
James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk
To put this in to context, the value of feed wheat has fallen from around £130/tonne a year ago to around £105/t just before Christmas. This is a drop of nearly 20 per cent and with costs of production running at around £130/t it is not difficult to do the maths.
In the livestock sector, sheep farmers had a particularly difficult year as lamb prices fell away sharply in the spring and summer with many lambs being sold at around £60/head compared to £80-£90/head the year before. This has led to very challenging times which still remain with lamb prices now about 50p per kg lower than a year ago.
Beef prices became more stable in 2015 but that followed big price falls in 2014 and so some respite was welcome. But even so prices have eased with finished cattle prices currently down around 15p/kg compared to this time last year.
However, the headline grabbing news has been the sustained and dramatic fall in milk price which is keeping many dairy farmers under pressure. In this area we are luckier than some as very few of our farmers are signed up with the worst hit milk purchasers such as First Milk where their producers are receiving not much more than 17p/litre.
Even so, many of our local farmers are receiving only around 22 or 23p/litre which is well below the average cost of production, resulting in widespread financial problems.
But, unlike other agricultural sectors where the value of the product being produced is similar for most farmers in that sector, the price dairy farmers are paid for their milk varies widely, being dependent on the milk supply contract any particular farmer has been able to secure. As a result there are dairy farmers on supermarket aligned contracts who are still receiving around 30p/litre which is almost twice as much as those on the worst contracts.
This means that the fortunes of two seemingly similar neighbouring dairy farmers can vary widely but in reality the majority are not on the best contracts and are suffering badly. Unfortunately there is little sign that prices will improve dramatically in the short to medium term and so the gloomy theme of 2015 seems likely to continue in 2016.
The only ray of sunshine is the fall in other costs of production such as feed and fuel bills, but in many ways these simply reflect the worldwide fall in commodity prices across the board which are the main reason farmers around the world are feeling the pinch.
James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk
Wednesday, 30 September 2015
Keep a close eye on promoting land for development
Owners wanting to promote land for development need to keep a close eye on their council’s Local Plan.
Many local authorities are reviewing their local planning policies following the last government’s significant change in emphasis, away from those led by the Regional Spatial Strategy to ones which comply with the National Planning Policy Framework (NPPF).
Within the NPPF, local authorities are not only tasked with the need to identify the number of houses required to satisfy a district’s five-year housing supply, they must also identify sites that can deliver these housing requirements which is a demanding process.
If the local authority fails to comply with either of these requirements their housing polices will be considered “out of date”.
In such circumstances the NPPF states that there is a presumption in favour of sustainable development, which means development can potentially take place wherever a landowner can prove the site is “sustainable” even if it is not identified for development under the local authority’s existing plan.
This is undesirable from a local authority’s perspective and so they have all worked hard to identify their five-year housing supply through the successful adoption of what most authorities call their Local Plan Part I (LLP I).
The LLP I identifies the minimum number of additional houses required and the broad locations where it should go, including identifying some large development sites.
The local authority then needs to identify in more detail where development will go in the district’s towns and villages within which it will consider individual sites for housing, employment and community facilities.
This will form what is known as the Local Plan Part II (LPP II) and it is during the building of this plan that landowners need to get involved if they want to promote their land for development and be identified in the emerging Local Plan.
In the Mendip District Council area, for example, the LPP I was adopted last year and the consultation phase for LLP II opened earlier this month and will close on December 16.
This is a very important period for landowners to ensure they are promoting land for development which complies with polices set out in the LLP I. Failure to act now could mean your land is excluded from development throughout the lifetime of the emerging local plan which in Mendip runs to 2029.
So, the message for landowners is act now and if anyone has any queries in this respect they are welcome to email me on James.Stephen@carterjonas.co.uk in the first instance for free initial advice.
James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk
Many local authorities are reviewing their local planning policies following the last government’s significant change in emphasis, away from those led by the Regional Spatial Strategy to ones which comply with the National Planning Policy Framework (NPPF).
Within the NPPF, local authorities are not only tasked with the need to identify the number of houses required to satisfy a district’s five-year housing supply, they must also identify sites that can deliver these housing requirements which is a demanding process.
If the local authority fails to comply with either of these requirements their housing polices will be considered “out of date”.
In such circumstances the NPPF states that there is a presumption in favour of sustainable development, which means development can potentially take place wherever a landowner can prove the site is “sustainable” even if it is not identified for development under the local authority’s existing plan.
This is undesirable from a local authority’s perspective and so they have all worked hard to identify their five-year housing supply through the successful adoption of what most authorities call their Local Plan Part I (LLP I).
The LLP I identifies the minimum number of additional houses required and the broad locations where it should go, including identifying some large development sites.
The local authority then needs to identify in more detail where development will go in the district’s towns and villages within which it will consider individual sites for housing, employment and community facilities.
This will form what is known as the Local Plan Part II (LPP II) and it is during the building of this plan that landowners need to get involved if they want to promote their land for development and be identified in the emerging Local Plan.
In the Mendip District Council area, for example, the LPP I was adopted last year and the consultation phase for LLP II opened earlier this month and will close on December 16.
This is a very important period for landowners to ensure they are promoting land for development which complies with polices set out in the LLP I. Failure to act now could mean your land is excluded from development throughout the lifetime of the emerging local plan which in Mendip runs to 2029.
So, the message for landowners is act now and if anyone has any queries in this respect they are welcome to email me on James.Stephen@carterjonas.co.uk in the first instance for free initial advice.
James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk
Friday, 18 September 2015
£8 million is now available for rural businesses looking to expand and promote tourism
Farming Minister George Eustice says another £8 million is now available from the Growth Programme for rural businesses looking to expand and promote tourism.
Hopefully this new funding will help unlock the potential in farming businesses across the country, but understanding how to access the money does not seem straightforward.
The Growth Programme provides grants to aid projects in England which create jobs and help the rural economy grow. They are funded by the European Agricultural Fund for Rural Development (EAFRD). The Rural Payments Agency manages the grants, working with Local Enterprise Partnerships (LEPs).
However, the LEPs are not well equipped to manage the process of handling these funds. In the past similar grant schemes have been various handled centrally by DEFRA and then by the Regional Development Agencies (RDAs) and following their demise in 2010, by the newly created LEPs.
LEPs are a rather strange invention of the last government which simply scrapped the old RDAs for ideological reasons and then left it to local authorities and businesses to set up their own LEPs. This has proved a difficult task and now these bodies are being tasked with coordinating the delivery of funds such as the EAFRD which will prove a big challenge.
Having looked at the website for the Heart of the South West, which is the LEP covering Somerset and Devon, there is no obvious reference to this latest tranche of funding although in the August newsletter, rural businesses are signposted to the LEADER scheme that is described as “one element of the Rural Development Programme for England, funded by the EU and Defra.
“There is in the region of £12 million of funding available for projects that meet the eligibility criteria throughout most of rural Devon and Somerset, and the funding is available until December 2020.
“Grants will be available to support the local rural economy, and will be particularly aimed at increasing farm productivity, developing micro and small enterprises and farm diversification, rural tourism, rural services, cultural and heritage activity and increasing forestry productivity.”
The funding is being administered by eight Local Action Groups (LAGs), each covering a specific area and focused on the things that matter most to their local economies. For Somerset you are directed to contact www.somersetleader.org.uk which covers the LAGs for Western Somerset; the Heart of Wessex; parts of Making It Local; and the Levels and Moors.
So, if you are a Somerset farming business interested in getting hold of some of this funding I suggest that in the first instance you contact the Somerset LEADER scheme in the hope they will have some idea about how you can access them.
James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk
Hopefully this new funding will help unlock the potential in farming businesses across the country, but understanding how to access the money does not seem straightforward.
The Growth Programme provides grants to aid projects in England which create jobs and help the rural economy grow. They are funded by the European Agricultural Fund for Rural Development (EAFRD). The Rural Payments Agency manages the grants, working with Local Enterprise Partnerships (LEPs).
However, the LEPs are not well equipped to manage the process of handling these funds. In the past similar grant schemes have been various handled centrally by DEFRA and then by the Regional Development Agencies (RDAs) and following their demise in 2010, by the newly created LEPs.
LEPs are a rather strange invention of the last government which simply scrapped the old RDAs for ideological reasons and then left it to local authorities and businesses to set up their own LEPs. This has proved a difficult task and now these bodies are being tasked with coordinating the delivery of funds such as the EAFRD which will prove a big challenge.
Having looked at the website for the Heart of the South West, which is the LEP covering Somerset and Devon, there is no obvious reference to this latest tranche of funding although in the August newsletter, rural businesses are signposted to the LEADER scheme that is described as “one element of the Rural Development Programme for England, funded by the EU and Defra.
“There is in the region of £12 million of funding available for projects that meet the eligibility criteria throughout most of rural Devon and Somerset, and the funding is available until December 2020.
“Grants will be available to support the local rural economy, and will be particularly aimed at increasing farm productivity, developing micro and small enterprises and farm diversification, rural tourism, rural services, cultural and heritage activity and increasing forestry productivity.”
The funding is being administered by eight Local Action Groups (LAGs), each covering a specific area and focused on the things that matter most to their local economies. For Somerset you are directed to contact www.somersetleader.org.uk which covers the LAGs for Western Somerset; the Heart of Wessex; parts of Making It Local; and the Levels and Moors.
So, if you are a Somerset farming business interested in getting hold of some of this funding I suggest that in the first instance you contact the Somerset LEADER scheme in the hope they will have some idea about how you can access them.
James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk
Wednesday, 2 September 2015
Retailers to pay more for milk
Pressure is mounting on retailers who have started to offer to buy milk from processors at an increased price but it is unclear how much this will impact on the price paid by processors to farmers.
ASDA has committed to paying 28p/litre to their milk supplier Arla although because Arla is a co-operative I believe the increase in price will be pooled across all 13,500 farmer members throughout Europe, not just British farmers which would dilute the benefit of this rise here in the UK.
NFU president Meurig Raymond said: “The NFU has been lobbying tirelessly for Asda to recognise the plight of the dairy industry so we are pleased that Asda has moved to support farmers in their hour of need.
“It is clear from Asda that this commitment is to support the UK dairy industry at a time of crisis. It is now important that Arla ensures this is delivered to British farmers on the ground, with immediate effect.
Aldi and Lidl have also made new commitments to pay processors 28p/litre while Morrisons will pay 26p/litre for milk before processing costs.
The Morrisons move followed the retailer’s previous announcement that it was preparing to launch this new brand giving customers the option to pay an extra 10p/litre more for it on the basis the extra 10p/litre would go back to the farm.
Again the detail as to how these new pricing plans will work is not entirely clear. But it is certain that the pressure put on retailers by farmers taking direct action and by talks behind the scenes between farming leaders in the NFU and other organisations is having some effect on the liquid milk market at least.
However, liquid milk is only one part of the dairy market. About half the milk produced in this country is processed into other products such as butter and cheese and farmers supplying milk to cheese processors for example will be unaffected by these developments.
So there is much more work to be done to help our dairy farmers across all sectors but there is no magic bullet which can insulate UK dairy farmers from the disastrously low world dairy commodity markets which are showing no sign of improvement.
James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk
ASDA has committed to paying 28p/litre to their milk supplier Arla although because Arla is a co-operative I believe the increase in price will be pooled across all 13,500 farmer members throughout Europe, not just British farmers which would dilute the benefit of this rise here in the UK.
NFU president Meurig Raymond said: “The NFU has been lobbying tirelessly for Asda to recognise the plight of the dairy industry so we are pleased that Asda has moved to support farmers in their hour of need.
“It is clear from Asda that this commitment is to support the UK dairy industry at a time of crisis. It is now important that Arla ensures this is delivered to British farmers on the ground, with immediate effect.
Aldi and Lidl have also made new commitments to pay processors 28p/litre while Morrisons will pay 26p/litre for milk before processing costs.
The Morrisons move followed the retailer’s previous announcement that it was preparing to launch this new brand giving customers the option to pay an extra 10p/litre more for it on the basis the extra 10p/litre would go back to the farm.
Again the detail as to how these new pricing plans will work is not entirely clear. But it is certain that the pressure put on retailers by farmers taking direct action and by talks behind the scenes between farming leaders in the NFU and other organisations is having some effect on the liquid milk market at least.
However, liquid milk is only one part of the dairy market. About half the milk produced in this country is processed into other products such as butter and cheese and farmers supplying milk to cheese processors for example will be unaffected by these developments.
So there is much more work to be done to help our dairy farmers across all sectors but there is no magic bullet which can insulate UK dairy farmers from the disastrously low world dairy commodity markets which are showing no sign of improvement.
James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk
Thursday, 20 August 2015
My chat with Prince Charles and the Grosvenor Estates manager Edwin Christian
Prince Charles takes relentless criticism and teasing in the media but his work for our countryside has earned my respect.
In 2010 he founded The Prince’s Countryside Fund to ensure a sustainable future for rural Britain and I was invited to its fifth anniversary celebrations at Highgrove, Charles’ country home near Tetbury.
My firm Carter Jonas gives financial aid to this charity which has distributed more than £6 million in grants to 135 projects benefiting 160,000 people living and working in our rural communities.
We are proud to provide this money as part of our support for the farming community and I was impressed by Charles’ profound concern over the current crisis facing our dairy industry.
As well as its normal grant application process, the charity operates an emergency fund for stricken rural communities in times of need, which last year helped farmers hit by the disastrous floods on the Somerset Levels.
During July’s National Countryside Week a further £800,000 of grants was allocated to rural projects across the UK.
Projects funded range from apprenticeships for budding hill farmers, training for young people to gain employment in the rural economy, community transport schemes in isolated rural areas and projects to educate school children about where their food comes from and why the countryside matters.
In addition, The Prince’s Countryside Fund runs a bursary project with Land Rover. All the fund’s projects focus on supporting the people who care for our countryside and make it tick.
Supporters of the fund at Highgrove included TV gardener Alan Titchmarsh, Countryfile presenter Ellie Harrison and former England rugby star Phil Vickery.
James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk
In 2010 he founded The Prince’s Countryside Fund to ensure a sustainable future for rural Britain and I was invited to its fifth anniversary celebrations at Highgrove, Charles’ country home near Tetbury.
My firm Carter Jonas gives financial aid to this charity which has distributed more than £6 million in grants to 135 projects benefiting 160,000 people living and working in our rural communities.
We are proud to provide this money as part of our support for the farming community and I was impressed by Charles’ profound concern over the current crisis facing our dairy industry.
As well as its normal grant application process, the charity operates an emergency fund for stricken rural communities in times of need, which last year helped farmers hit by the disastrous floods on the Somerset Levels.
During July’s National Countryside Week a further £800,000 of grants was allocated to rural projects across the UK.
Projects funded range from apprenticeships for budding hill farmers, training for young people to gain employment in the rural economy, community transport schemes in isolated rural areas and projects to educate school children about where their food comes from and why the countryside matters.
In addition, The Prince’s Countryside Fund runs a bursary project with Land Rover. All the fund’s projects focus on supporting the people who care for our countryside and make it tick.
Supporters of the fund at Highgrove included TV gardener Alan Titchmarsh, Countryfile presenter Ellie Harrison and former England rugby star Phil Vickery.
James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk
Monday, 3 August 2015
Milk prices continue to drop
As milk price continues to fall I was not surprised to learn that almost five per cent of dairy farmers in England and Wales have left the industry in the last 12 months leaving only 9,777 in production compared with 10,225 a year ago.
With little prospect of an increase in price on the horizon this trend is likely to continue, although I suspect the profile of the farmers leaving the industry will probably be closely correlated with the buyer to whom they are selling their milk.
This is because the gap between the price being paid on the best and worst milk contracts has widened vastly over the last year. Those farmers supplying milk to purchasers whose price reflects the fall in world market prices have found the value of their milk plummet.
In contrast those farmers who are lucky enough to have secured a contract with one of the big supermarkets, where the price being paid is usually linked in some way to the cost of production, have found their milk price has remained relatively firm. For example the Dairy Crest Sainsbury contract is offering around 30.4p per litre in July compared with 19p from First Milk, a farmer owned co-op.
However, farmers on the premium supermarket contracts must not be complacent because Tesco has written to the 650 farmers in its Tesco Sustainable Dairy Group saying major industry changes have forced them to rethink their contracts. Exactly what this will mean is not yet clear but it seems inevitable that Tesco will be looking to address the gap between the premium price they are paying for their milk and the cut price deals they are offering on the shelves as a result of fierce competition in the retail sector.
Other supermarkets which run similar programmes to Tesco such as Waitrose and Sainsbury’s have told Farmer’s Weekly that they have no plans to review their contracts. Similarly, M&S have publicly announced their intention to continue with their Milk Pledge to pay a fair price to farmers covering their cost of production.
Tesco is feeling the pinch and looking to save costs wherever it can. Reviewing their milk contract is an obvious target because they can secure milk from the wider market place at significantly less than they are currently paying their farmers.
However, Tesco need to appreciate that they must treat their supply chain fairly and even if the contract is reviewed, it must still reward their suppliers appropriately for the high standards of welfare and hygiene Tesco demands, on which I am sure they will not want to compromise.
James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk
With little prospect of an increase in price on the horizon this trend is likely to continue, although I suspect the profile of the farmers leaving the industry will probably be closely correlated with the buyer to whom they are selling their milk.
This is because the gap between the price being paid on the best and worst milk contracts has widened vastly over the last year. Those farmers supplying milk to purchasers whose price reflects the fall in world market prices have found the value of their milk plummet.
In contrast those farmers who are lucky enough to have secured a contract with one of the big supermarkets, where the price being paid is usually linked in some way to the cost of production, have found their milk price has remained relatively firm. For example the Dairy Crest Sainsbury contract is offering around 30.4p per litre in July compared with 19p from First Milk, a farmer owned co-op.
However, farmers on the premium supermarket contracts must not be complacent because Tesco has written to the 650 farmers in its Tesco Sustainable Dairy Group saying major industry changes have forced them to rethink their contracts. Exactly what this will mean is not yet clear but it seems inevitable that Tesco will be looking to address the gap between the premium price they are paying for their milk and the cut price deals they are offering on the shelves as a result of fierce competition in the retail sector.
Other supermarkets which run similar programmes to Tesco such as Waitrose and Sainsbury’s have told Farmer’s Weekly that they have no plans to review their contracts. Similarly, M&S have publicly announced their intention to continue with their Milk Pledge to pay a fair price to farmers covering their cost of production.
Tesco is feeling the pinch and looking to save costs wherever it can. Reviewing their milk contract is an obvious target because they can secure milk from the wider market place at significantly less than they are currently paying their farmers.
However, Tesco need to appreciate that they must treat their supply chain fairly and even if the contract is reviewed, it must still reward their suppliers appropriately for the high standards of welfare and hygiene Tesco demands, on which I am sure they will not want to compromise.
James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk
Thursday, 9 July 2015
Ash Dieback disease is starting to take hold
Driving around the Somerset countryside I am seeing increasing numbers of sickly looking ash trees with weak foliage growth and dead branches appearing in the canopy.
I fear this is a sign that the deadly Ash Dieback disease or Chalara fraxinea is beginning to take hold. Chalara is a fungus spread by wind borne spores and so its control is impossible.
Ash trees suffering from the infection have been found widely across Europe since trees were first reported dying in large numbers in Poland in 1992. It was not until February 2012 that it was first confirmed in the UK when it was found in a consignment of infected trees sent from a nursery in the Netherlands to a nursery in Buckinghamshire.
In October 2012, scientists from the Food & Environment Research Agency confirmed a small number of cases in Norfolk and Suffolk in ash trees in the wider natural environment, which did not appear to have any association with recently supplied nursery stock.
Further finds in trees in the wider environment have since been confirmed in a number of places, mostly in the east and south-east of England. In May 2013 the first wider-environment case was found in south-west Wales.
Having had suspicions that the disease may now be in Somerset I looked at the Forestry Commission website where there is an interactive map and sure enough I found the disease has now been discovered in the three 10km grid squares around my home patch near Wells.
So my worst fears may well be correct because if our ash trees become affected in the same manner as those on the continent there is likely to be a mortality rate of well over 90 per cent. This will have a devastating effect on our landscape as the ash is one of the commonest woodland and hedgerow tree species.
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.
It seems there is little we can do other than hope that some resistant genetic strains may develop. This is a possibility because the ash does reproduce prolifically, to the extent that it has in places almost been considered a weed species.
Lets hope that within this genetic diversity some saplings will survive to breeding age and re-populate our woodlands in due course.
However, in the meantime this is a timely reminder of the vulnerability of our tree species in particular, which being long lived and slow growing organisms can be devastated by the introduction of a new disease such as Chalara.
Sadly these diseases usually come from some form of imported tree or timber product and government need to take biosecurity measures far more seriously.
James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk
I fear this is a sign that the deadly Ash Dieback disease or Chalara fraxinea is beginning to take hold. Chalara is a fungus spread by wind borne spores and so its control is impossible.
Ash trees suffering from the infection have been found widely across Europe since trees were first reported dying in large numbers in Poland in 1992. It was not until February 2012 that it was first confirmed in the UK when it was found in a consignment of infected trees sent from a nursery in the Netherlands to a nursery in Buckinghamshire.
In October 2012, scientists from the Food & Environment Research Agency confirmed a small number of cases in Norfolk and Suffolk in ash trees in the wider natural environment, which did not appear to have any association with recently supplied nursery stock.
Further finds in trees in the wider environment have since been confirmed in a number of places, mostly in the east and south-east of England. In May 2013 the first wider-environment case was found in south-west Wales.
Having had suspicions that the disease may now be in Somerset I looked at the Forestry Commission website where there is an interactive map and sure enough I found the disease has now been discovered in the three 10km grid squares around my home patch near Wells.
So my worst fears may well be correct because if our ash trees become affected in the same manner as those on the continent there is likely to be a mortality rate of well over 90 per cent. This will have a devastating effect on our landscape as the ash is one of the commonest woodland and hedgerow tree species.
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.
It seems there is little we can do other than hope that some resistant genetic strains may develop. This is a possibility because the ash does reproduce prolifically, to the extent that it has in places almost been considered a weed species.
Lets hope that within this genetic diversity some saplings will survive to breeding age and re-populate our woodlands in due course.
However, in the meantime this is a timely reminder of the vulnerability of our tree species in particular, which being long lived and slow growing organisms can be devastated by the introduction of a new disease such as Chalara.
Sadly these diseases usually come from some form of imported tree or timber product and government need to take biosecurity measures far more seriously.
James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk
Wednesday, 1 July 2015
Milk prices... why so low?
I was sad to learn that Mark Oliver, the chairman of the NFU’s South West dairy board has announced he is selling his herd and quitting agriculture.
Mr Oliver explained he could not see a future in the industry having seen his milk price drop from 33-34 pence per litre a year ago to 25 pence today with further cuts in prospect.
I suspect Mr Oliver will not be alone in making this decision in the coming months. With milk currently trading on the spot market at prices as low as 12 pence per litre, the future does not look great except for those on the most lucrative supermarket contracts where the annual average milk price is still in excess of 30 pence per litre.
The current crisis in the dairy sector is accentuating the huge breadth of performance in the industry. For example, the Milk Price League Table for April published by the Agriculture and Horticulture Development Board (AHDB) shows the top annual milk price is offered under the Muller Wiseman Dairies Tesco contract at 31.88 pence per litre while the lowest price under the First Milk Liquid A contract at 19.56 pence per litre.
Similarly there is a huge gap in performance between the best and the worst farms. Again figures published by AHDB show the full economic cost of production for the top 25 per cent of farmers is around 26.5 pence per litre with the bottom 25 per cent being around 36.2 pence.
Therefore, even on the very best milk contract, the worst performing dairy farmers will be losing more than four pence per litre and if they were on the worst contract they would be losing nearly 17 pence on every litre of milk they produce. There can be no long term future for such businesses.
In contrast farmers in the top 25 per cent will still be making money on the best milk contracts, although in most cases even these farmers will struggle to break even.
So, more than ever, dairy farmers need to keep a very close eye on their production costs and where possible get on to the best milk supply contracts. But sadly there will be no future for the bottom 25 per cent of dairy farmers unless they can seriously improve their technical performance.
James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk
Mr Oliver explained he could not see a future in the industry having seen his milk price drop from 33-34 pence per litre a year ago to 25 pence today with further cuts in prospect.
I suspect Mr Oliver will not be alone in making this decision in the coming months. With milk currently trading on the spot market at prices as low as 12 pence per litre, the future does not look great except for those on the most lucrative supermarket contracts where the annual average milk price is still in excess of 30 pence per litre.
The current crisis in the dairy sector is accentuating the huge breadth of performance in the industry. For example, the Milk Price League Table for April published by the Agriculture and Horticulture Development Board (AHDB) shows the top annual milk price is offered under the Muller Wiseman Dairies Tesco contract at 31.88 pence per litre while the lowest price under the First Milk Liquid A contract at 19.56 pence per litre.
Similarly there is a huge gap in performance between the best and the worst farms. Again figures published by AHDB show the full economic cost of production for the top 25 per cent of farmers is around 26.5 pence per litre with the bottom 25 per cent being around 36.2 pence.
Therefore, even on the very best milk contract, the worst performing dairy farmers will be losing more than four pence per litre and if they were on the worst contract they would be losing nearly 17 pence on every litre of milk they produce. There can be no long term future for such businesses.
In contrast farmers in the top 25 per cent will still be making money on the best milk contracts, although in most cases even these farmers will struggle to break even.
So, more than ever, dairy farmers need to keep a very close eye on their production costs and where possible get on to the best milk supply contracts. But sadly there will be no future for the bottom 25 per cent of dairy farmers unless they can seriously improve their technical performance.
James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk
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:
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
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk
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
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk
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
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk
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
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk
Friday, 29 May 2015
Wish there was something positive to say...
I wish there was something positive to say in the world of agriculture but today farmers are under pressure across all sectors.
This will undoubtedly put severe strain on some farming businesses where the squeeze on cash flow is going to be a problem in the coming months.
Wheat, milk and lamb prices are now down 32, 26 and 17 per cent respectively compared to this time last year.
Meanwhile, although finished beef cattle prices have only fallen by around five per cent, many beef rearing units are really struggling. This is because they rely on making a margin between the price of the young cattle they buy and the price of the finished product, but this spring they have found the price of young cattle has been very strong, leaving them badly exposed to potential losses if the finished beef price does not rise significantly.
The whole situation is further compounded by the Rural Payments Agency (RPA) making a pretty good hash of introducing the new Basic Payment Scheme (BPS) through which farmers receive support payments from the EU.
In the past farmers have become used to receiving these payments in early December but agricultural consultants Andersons are suggesting farmers should not budget to receive this year’s payment until March 2016.
In contrast the RPA chief executive Mark Grimshaw said he would be very disappointed if most claims under the BPS were not paid out by the end of January. Obviously the sooner such payments are made, the better, but even if payments are made by late January this will still be two months later than in the recent past which will put pressure on many businesses.
That is not to say all farmers are struggling and in the milk sector in particular some farmers are still on favourable contracts and are being paid a reasonable price for their milk. In these circumstances good profits can still be made but the gap between the best and the worst milk contracts has widened enormously with the result that some will be losing large sums of money very fast indeed.
However, excluding the lucky few, most farmers are experiencing very challenging times and with the pound remaining strong on the foreign exchange markets this is making our exports less competitive and imports comparatively cheap, which is not helping any of the agricultural produce prices in this country.
Farmers are set for challenging times ahead and at present there are no obvious bright spots on the horizon.
James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk
This will undoubtedly put severe strain on some farming businesses where the squeeze on cash flow is going to be a problem in the coming months.
Wheat, milk and lamb prices are now down 32, 26 and 17 per cent respectively compared to this time last year.
Meanwhile, although finished beef cattle prices have only fallen by around five per cent, many beef rearing units are really struggling. This is because they rely on making a margin between the price of the young cattle they buy and the price of the finished product, but this spring they have found the price of young cattle has been very strong, leaving them badly exposed to potential losses if the finished beef price does not rise significantly.
The whole situation is further compounded by the Rural Payments Agency (RPA) making a pretty good hash of introducing the new Basic Payment Scheme (BPS) through which farmers receive support payments from the EU.
In the past farmers have become used to receiving these payments in early December but agricultural consultants Andersons are suggesting farmers should not budget to receive this year’s payment until March 2016.
In contrast the RPA chief executive Mark Grimshaw said he would be very disappointed if most claims under the BPS were not paid out by the end of January. Obviously the sooner such payments are made, the better, but even if payments are made by late January this will still be two months later than in the recent past which will put pressure on many businesses.
That is not to say all farmers are struggling and in the milk sector in particular some farmers are still on favourable contracts and are being paid a reasonable price for their milk. In these circumstances good profits can still be made but the gap between the best and the worst milk contracts has widened enormously with the result that some will be losing large sums of money very fast indeed.
However, excluding the lucky few, most farmers are experiencing very challenging times and with the pound remaining strong on the foreign exchange markets this is making our exports less competitive and imports comparatively cheap, which is not helping any of the agricultural produce prices in this country.
Farmers are set for challenging times ahead and at present there are no obvious bright spots on the horizon.
James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk
Monday, 27 April 2015
Give farmers a break – that is the plea to the Rural Payments Agency
Farming leaders are quite rightly calling on the RPA to take a lenient attitude to genuine mistakes made by farmers this year as the new Basic Payment Scheme is in such chaos.
The RPA have had to delay the application deadline by a month following the abandonment of their online application process in favour of a paper based system.
The failure to get the online process up and running means farmers will now have to carry out calculations manually which previously were supposed to be done automatically by the online system.
So farmers are now exposed to making errors which could have a significant impact on the payments they will receive as penalties are applied.
Also, having printed out a number of the forms that I have received by email on behalf of clients, there is clearly plenty of scope for basic mistakes to creep in.
For example, in contrast to the old paper forms which were printed in a booklet where all the information on one field could be completed on one line crossing two facing pages of the booklet, this is no longer possible because the two pages now have to be printed separately.
Therefore part of the information for each field will have to be completed on two separate sheets of paper. There are 11 fields per sheet and 10 columns to be completed for each field, four on the first page and six on the second page.
What used to be a reasonably straightforward task of following one line across two pages in a booklet has been made more complicated than it should.
A facility to print two A4 pages on one A3 sheet of paper would have been a great help both to farmers and the RPA but that does not seem possible at present.
So if your farm receives a visit from an RPA inspector this year, you should not sign off the inspector’s findings without looking at them very carefully and ensuring you have a witness present as to what is said.
In my experience such inspectors often downplay the potential consequence of their findings, partly so they can complete their task and possibly also because they do not always appreciate the consequence their findings may have on a farmer’s support payments.
Therefore utmost care is required this year in completing the BPS application form and advice should be sought if an inspector comes to call later in the year.
James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk
The RPA have had to delay the application deadline by a month following the abandonment of their online application process in favour of a paper based system.
The failure to get the online process up and running means farmers will now have to carry out calculations manually which previously were supposed to be done automatically by the online system.
So farmers are now exposed to making errors which could have a significant impact on the payments they will receive as penalties are applied.
Also, having printed out a number of the forms that I have received by email on behalf of clients, there is clearly plenty of scope for basic mistakes to creep in.
For example, in contrast to the old paper forms which were printed in a booklet where all the information on one field could be completed on one line crossing two facing pages of the booklet, this is no longer possible because the two pages now have to be printed separately.
Therefore part of the information for each field will have to be completed on two separate sheets of paper. There are 11 fields per sheet and 10 columns to be completed for each field, four on the first page and six on the second page.
What used to be a reasonably straightforward task of following one line across two pages in a booklet has been made more complicated than it should.
A facility to print two A4 pages on one A3 sheet of paper would have been a great help both to farmers and the RPA but that does not seem possible at present.
So if your farm receives a visit from an RPA inspector this year, you should not sign off the inspector’s findings without looking at them very carefully and ensuring you have a witness present as to what is said.
In my experience such inspectors often downplay the potential consequence of their findings, partly so they can complete their task and possibly also because they do not always appreciate the consequence their findings may have on a farmer’s support payments.
Therefore utmost care is required this year in completing the BPS application form and advice should be sought if an inspector comes to call later in the year.
James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk
Friday, 17 April 2015
Was it an administrative error?
The farmer-owned dairy co-op First Milk hit yet more trouble last Friday as their milk suppliers failed to receive their monthly cheque as expected.
First Milk blame this on an administrative error but there are continued fears about the organisation’s financial stability which must be arousing fear among the 1,200 farmers who supply milk to the co-op.
Since the turn of the year First Milk has been rocked by a number of problems that started in January when they announced a delay in paying the monthly milk cheque by two weeks.
This sent shock waves through their membership. Then in February First Milk announced a change in the way farmers would be paid for their milk by introducing an “A and B pricing contract”.
Instead of paying farmers a single price for all the milk they produce, farmers from April 1 would receive a fixed price for the “A” milk; approximately 80 per cent of their produce and a second variable price for the “B” milk.
The “B” price is being set to reflect the short-term prices such as those on the spot and milk powder markets. This clearly introduces uncertainty for First Milk members who will not know what price they will be receiving for their milk at the end of the month.
Then in March First Milk announced its milk price for April would likely end up being around 20p/litre which is well below the cost of production.
This makes one wonder how long dairy farmers can continue to supply milk at this price, especially as other dairy farmers are being paid significantly more by other milk buyers.
In this context some farmers on the best contracts are still being paid more than 30p/litre, an incredible 10p per litre more than most First Milk producers are getting for doing more or less the same job.
Why don’t farmers change contracts? Well the answer is that it is not easy to change contracts and for some there will be no choice at all. Many of the beleaguered First Milk suppliers will have to hang on in hope of better prices to come or cease dairy farming altogether.
So with the milk price at around 20p per litre, First Milk producers are facing a difficult choice and their confidence in the management of the organisation will have not grown when their monthly milk cheque failed to hit their bank accounts last Friday.
James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk
First Milk blame this on an administrative error but there are continued fears about the organisation’s financial stability which must be arousing fear among the 1,200 farmers who supply milk to the co-op.
Since the turn of the year First Milk has been rocked by a number of problems that started in January when they announced a delay in paying the monthly milk cheque by two weeks.
This sent shock waves through their membership. Then in February First Milk announced a change in the way farmers would be paid for their milk by introducing an “A and B pricing contract”.
Instead of paying farmers a single price for all the milk they produce, farmers from April 1 would receive a fixed price for the “A” milk; approximately 80 per cent of their produce and a second variable price for the “B” milk.
The “B” price is being set to reflect the short-term prices such as those on the spot and milk powder markets. This clearly introduces uncertainty for First Milk members who will not know what price they will be receiving for their milk at the end of the month.
Then in March First Milk announced its milk price for April would likely end up being around 20p/litre which is well below the cost of production.
This makes one wonder how long dairy farmers can continue to supply milk at this price, especially as other dairy farmers are being paid significantly more by other milk buyers.
In this context some farmers on the best contracts are still being paid more than 30p/litre, an incredible 10p per litre more than most First Milk producers are getting for doing more or less the same job.
Why don’t farmers change contracts? Well the answer is that it is not easy to change contracts and for some there will be no choice at all. Many of the beleaguered First Milk suppliers will have to hang on in hope of better prices to come or cease dairy farming altogether.
So with the milk price at around 20p per litre, First Milk producers are facing a difficult choice and their confidence in the management of the organisation will have not grown when their monthly milk cheque failed to hit their bank accounts last Friday.
James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk
Friday, 10 April 2015
The abolition of Milk Quota
As I sit writing this article on April Fools Day, I cannot let the day pass without making mention of the abolition of Milk Quota.
It was introduced across the then EEC on April 2, 1984, some 31 years ago almost to the day as a mechanism to control milk production because of the “milk lakes” and “butter mountains” which were growing in intervention stores.
How times have changed: back in 1984, under the Common Agricultural Policy, famers received support not through direct payments but via the support of commodity markets. When a commodity fell in price, it was bought into intervention stores thereby supporting the market price, which not surprisingly encouraged overproduction.
Since 1984 intervention support has all but disappeared and farmers now receive support through direct area-related payments not linked to production and they then have to sell their produce at whatever price they can get.
Accordingly farmers are now exposed to world commodity prices which tend to be volatile and dairy farmers are currently facing very low milk prices due to an oversupply on global markets.
But back in1984 when quotas were introduced, it was not the price that was the problem, but the fact that without warning farmers were forced to cut their production to stay within the level of Milk Quota they were allocated.
Failure to do so would result in fines at the end of the year. As a result milk quota became very valuable because farmers could not expand without securing extra milk quota.
Milk Quota rather than milk price was the limiting factor.
I cut my teeth as a young surveyor back in the 1980s dealing in milk quota and I can remember trading quota at more than 80p a litre for sale and 22p/litre for lease.
These were crippling prices for some but in more recent years the UK has remained under quota and as a result the value of Milk Quota plummeted to a fraction of a penny and now has finally been scrapped altogether.
However, other European countries such as Germany, the Netherlands and Ireland have all been going over quota on a regular basis and it is assumed that without the constraint of Milk Quota, production there will rise.
It is estimated that across the EU the additional milk production following the lifting of quota is likely to be similar to the total production of Ireland and there are fears this will hinder the recovery of milk prices, particularly here in Europe.
So, although the passing of milk quota will not be mourned by many it does represent the end of an era of EU agricultural policy which encouraged production without heed to whether there was a market for the produce.
That era has now well and truly passed and dairy farmers currently find themselves all too exposed to the reality of “the market”.
James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk
It was introduced across the then EEC on April 2, 1984, some 31 years ago almost to the day as a mechanism to control milk production because of the “milk lakes” and “butter mountains” which were growing in intervention stores.
How times have changed: back in 1984, under the Common Agricultural Policy, famers received support not through direct payments but via the support of commodity markets. When a commodity fell in price, it was bought into intervention stores thereby supporting the market price, which not surprisingly encouraged overproduction.
Since 1984 intervention support has all but disappeared and farmers now receive support through direct area-related payments not linked to production and they then have to sell their produce at whatever price they can get.
Accordingly farmers are now exposed to world commodity prices which tend to be volatile and dairy farmers are currently facing very low milk prices due to an oversupply on global markets.
But back in1984 when quotas were introduced, it was not the price that was the problem, but the fact that without warning farmers were forced to cut their production to stay within the level of Milk Quota they were allocated.
Failure to do so would result in fines at the end of the year. As a result milk quota became very valuable because farmers could not expand without securing extra milk quota.
Milk Quota rather than milk price was the limiting factor.
I cut my teeth as a young surveyor back in the 1980s dealing in milk quota and I can remember trading quota at more than 80p a litre for sale and 22p/litre for lease.
These were crippling prices for some but in more recent years the UK has remained under quota and as a result the value of Milk Quota plummeted to a fraction of a penny and now has finally been scrapped altogether.
However, other European countries such as Germany, the Netherlands and Ireland have all been going over quota on a regular basis and it is assumed that without the constraint of Milk Quota, production there will rise.
It is estimated that across the EU the additional milk production following the lifting of quota is likely to be similar to the total production of Ireland and there are fears this will hinder the recovery of milk prices, particularly here in Europe.
So, although the passing of milk quota will not be mourned by many it does represent the end of an era of EU agricultural policy which encouraged production without heed to whether there was a market for the produce.
That era has now well and truly passed and dairy farmers currently find themselves all too exposed to the reality of “the market”.
James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk
Tuesday, 7 April 2015
Basic Payment Scheme has slid into chaos
Giving credit to the Rural Payments Agency does not come easy as their administration of the Basic Payment Scheme has slid into chaos.
Last week the Western Daily Press reported the shock announcement by the RPA that, for this year at least, the new online computer system has been abandoned for making the claim.
However, I commend the RPA for facing up to the very real problems that farmers and their advisors were facing with the failings of the online process.
We are also grateful that the EU Commission has extended the deadline for submission of the BPS application from May 15 to June 15 because of problems being experienced with the introduction of the new scheme throughout Europe.
But the practical details about how the application process will now work are only just emerging and there are a number of important points to note.
First, you still need to ensure you are registered on the new RPA online system. This is usually reasonably straightforward and the easiest way to do this is to call the RPA on 03000 200 301.
Once registered you will need to check your business details, appoint any agent you may wish to deal with your claim and check the level of “permissions” you wish to give yourself or your agent.
Then, although the deadline for the submission of the BPS application itself has been extended to June 15, the deadline for submission of entitlement transfers remains May 15. This is important because in this first year of the BPS, any spare entitlements which are not claimed will be confiscated permanently and their value placed in the National Reserve.
This means claimants must make sure they have matched their eligible land with the equivalent number of entitlements and if any adjustment in their number is required, these need to be made by May 15 and not June 15. To transfer entitlements you need to complete a paper RLE1 form which can be downloaded from the RPA website.
To make a claim, the RPA have produced a blank claim form (BPS5) which can also be downloaded from the website. However, the RPA have said they will be emailing sometime in April pre-populated forms to people who claimed last year with a copy of their RLR maps. So it seems sensible to wait for these pre-populated forms and plans to arrive rather than trying to complete the blank form from scratch.
This is obviously a busy time in the farming calendar and so it is welcome that the application deadline has been pushed back to June 15 but this is no reason to be complacent because there are still tasks which need to be dealt with by May 15.
Farmers and their advisors need to keep their wits about them during this crucial period.
James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk
Last week the Western Daily Press reported the shock announcement by the RPA that, for this year at least, the new online computer system has been abandoned for making the claim.
However, I commend the RPA for facing up to the very real problems that farmers and their advisors were facing with the failings of the online process.
We are also grateful that the EU Commission has extended the deadline for submission of the BPS application from May 15 to June 15 because of problems being experienced with the introduction of the new scheme throughout Europe.
But the practical details about how the application process will now work are only just emerging and there are a number of important points to note.
First, you still need to ensure you are registered on the new RPA online system. This is usually reasonably straightforward and the easiest way to do this is to call the RPA on 03000 200 301.
Once registered you will need to check your business details, appoint any agent you may wish to deal with your claim and check the level of “permissions” you wish to give yourself or your agent.
Then, although the deadline for the submission of the BPS application itself has been extended to June 15, the deadline for submission of entitlement transfers remains May 15. This is important because in this first year of the BPS, any spare entitlements which are not claimed will be confiscated permanently and their value placed in the National Reserve.
This means claimants must make sure they have matched their eligible land with the equivalent number of entitlements and if any adjustment in their number is required, these need to be made by May 15 and not June 15. To transfer entitlements you need to complete a paper RLE1 form which can be downloaded from the RPA website.
To make a claim, the RPA have produced a blank claim form (BPS5) which can also be downloaded from the website. However, the RPA have said they will be emailing sometime in April pre-populated forms to people who claimed last year with a copy of their RLR maps. So it seems sensible to wait for these pre-populated forms and plans to arrive rather than trying to complete the blank form from scratch.
This is obviously a busy time in the farming calendar and so it is welcome that the application deadline has been pushed back to June 15 but this is no reason to be complacent because there are still tasks which need to be dealt with by May 15.
Farmers and their advisors need to keep their wits about them during this crucial period.
James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk
Monday, 16 March 2015
Mendip Farmers’ Point to Point
In my part of Somerset our version of the Cheltenham Festival is the Mendip Farmers’ Point to Point held at Ston Easton. Well, it’s not quite that standard but to the amateur observer like me it is just as much fun.
The first of six races starts at 12.30pm and these are followed by two pony races for younger riders aged between nine and 15.
These pony races are a relatively recent innovation at point to points which provide interest and excitement for families and are a firm favourite with the crowds, rounding off the day’s racing in an informal, yet competitive and thoroughly enjoyable manner.
However, what astounds me about all point to points - the Mendip Farmers’ event is no exception - is the huge amount of work put in to make this one-day event such a great success.
There is so much to be organised, ranging from the health and safety involving doctors, ambulances and paramedics to making sure the appropriate bar licences have been secured. And that is before the course has been built, marquees erected, hospitality sorted, stewards and car parking arranged, tickets printed, trade stands set up, etc.
The list of tasks seems endless and without the generous support of many local businesses and individuals who sponsor aspects of the event, and of course all the time given freely by the committee, it would simply not be affordable.
But the racing is what it is all about and over the years the Mendip community has had its successes both locally and nationally.
For instance during the 1970s, Max Churches produced top horses, such as Rich Rose and Panmure, both of which won hunterchases, while in 1988, Mendip girl Jenny Litson, daughter of successful point to point owner Bill Gooden, achieved her goal of becoming Champion Ladies Jockey.
In recent years, more success has been seen with horses such as Double Silk, Earthmover and Double Thriller. All three set course records at the Mendip Farmers’ Point to Point, reached the top of the hunterchasing field and progressed to the higher reaches of National Hunt racing.
So, why not come along on Sunday and join the fun? There will be good quality horse racing, bookies, the Tote, bars, trade stands and a great atmosphere for the whole family to enjoy and all at a very reasonable cost for a family day’s entertainment.
James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk
The first of six races starts at 12.30pm and these are followed by two pony races for younger riders aged between nine and 15.
These pony races are a relatively recent innovation at point to points which provide interest and excitement for families and are a firm favourite with the crowds, rounding off the day’s racing in an informal, yet competitive and thoroughly enjoyable manner.
However, what astounds me about all point to points - the Mendip Farmers’ event is no exception - is the huge amount of work put in to make this one-day event such a great success.
There is so much to be organised, ranging from the health and safety involving doctors, ambulances and paramedics to making sure the appropriate bar licences have been secured. And that is before the course has been built, marquees erected, hospitality sorted, stewards and car parking arranged, tickets printed, trade stands set up, etc.
The list of tasks seems endless and without the generous support of many local businesses and individuals who sponsor aspects of the event, and of course all the time given freely by the committee, it would simply not be affordable.
But the racing is what it is all about and over the years the Mendip community has had its successes both locally and nationally.
For instance during the 1970s, Max Churches produced top horses, such as Rich Rose and Panmure, both of which won hunterchases, while in 1988, Mendip girl Jenny Litson, daughter of successful point to point owner Bill Gooden, achieved her goal of becoming Champion Ladies Jockey.
In recent years, more success has been seen with horses such as Double Silk, Earthmover and Double Thriller. All three set course records at the Mendip Farmers’ Point to Point, reached the top of the hunterchasing field and progressed to the higher reaches of National Hunt racing.
So, why not come along on Sunday and join the fun? There will be good quality horse racing, bookies, the Tote, bars, trade stands and a great atmosphere for the whole family to enjoy and all at a very reasonable cost for a family day’s entertainment.
James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk
Monday, 2 March 2015
All things to all men
When the new regulations for permitted development rights to convert agricultural buildings to residential use were introduced on 6th April last year, the hope was that this would allow farmers to convert old farm buildings to generate much needed additional income or a capital asset to sell. At the same time it was hoped that this would also help alleviate the shortage of residential accommodation in the countryside.
However, the reality has been very different because the regulations are open to wide interpretation. They state that the local planning authority can consider “whether the location or siting of the building makes it otherwise impractical or undesirable for the building to change from agricultural use…” to residential use. What does that mean I may hear you ask? Well the answer appears to be “all things to all men”.
As a consequence, some local authorities have been very relaxed while according to the Country Land and Business Association (CLA) nearly 60 local authorities have refused all applications.
In the Mendip area, anecdotal evidence appears to indicate that many of the early applications were permitted but as time has gone on, the planning authority has become more confident in turning down applications. Common reasons for refusal are that the building is in an “undesirable” or “impractical” area or the conversion is considered to be “unsustainable”.
Fenella Collins, head of planning at the CLA has commented that, “There is real frustration and there needs to be greater guidance to reduce misinterpretation”.
I suspect frustration is also felt by local authorities who are having to balance what on the face of it are contradictory policies coming out of national government, which on the one hand discourages new development in isolated areas and then on the other appears to be encouraging exactly the opposite.
Therefore government needs to clarify what they are wanting to achieve and in so doing provide clearer guidance on what may be considered to be “undesirable” or “impractical” or indeed what may be considered “sustainable” in the context of farm buildings, which by their very nature are often found in the countryside.
For example government may consider giving consent for conversion of an isolated building down a long farm track to be “undesirable”, whereas the conversion a building or group of buildings that may in themselves be close to existing residential property or near a bus route or village may be considered desirable.
These are only a few of my thoughts but if government were to provide some more explicit guidance on the subject I think this would assist farmers and local authorities alike so as to avoid the “post code lottery” that currently exists.
James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk
However, the reality has been very different because the regulations are open to wide interpretation. They state that the local planning authority can consider “whether the location or siting of the building makes it otherwise impractical or undesirable for the building to change from agricultural use…” to residential use. What does that mean I may hear you ask? Well the answer appears to be “all things to all men”.
As a consequence, some local authorities have been very relaxed while according to the Country Land and Business Association (CLA) nearly 60 local authorities have refused all applications.
In the Mendip area, anecdotal evidence appears to indicate that many of the early applications were permitted but as time has gone on, the planning authority has become more confident in turning down applications. Common reasons for refusal are that the building is in an “undesirable” or “impractical” area or the conversion is considered to be “unsustainable”.
Fenella Collins, head of planning at the CLA has commented that, “There is real frustration and there needs to be greater guidance to reduce misinterpretation”.
I suspect frustration is also felt by local authorities who are having to balance what on the face of it are contradictory policies coming out of national government, which on the one hand discourages new development in isolated areas and then on the other appears to be encouraging exactly the opposite.
Therefore government needs to clarify what they are wanting to achieve and in so doing provide clearer guidance on what may be considered to be “undesirable” or “impractical” or indeed what may be considered “sustainable” in the context of farm buildings, which by their very nature are often found in the countryside.
For example government may consider giving consent for conversion of an isolated building down a long farm track to be “undesirable”, whereas the conversion a building or group of buildings that may in themselves be close to existing residential property or near a bus route or village may be considered desirable.
These are only a few of my thoughts but if government were to provide some more explicit guidance on the subject I think this would assist farmers and local authorities alike so as to avoid the “post code lottery” that currently exists.
James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk
Tuesday, 24 February 2015
Private Rented Sector Energy Efficiency Regulations
Fears that many rural properties may be adversely affected by the “Private Rented Sector Energy Efficiency Regulations” appear to be misplaced.
When the Department of Energy and Climate Change (DECC) published the regulations, this led to immediate reports that properties with an EPC rating in Bands F and G would become un-lettable from 1st April 2018.
The basic premise of the regulations is that from 1st April 2016 domestic tenants will have the right to request consent to make energy efficiency improvements under the regulations that have been laid before Parliament. Landlords would need to provide a response to the tenant’s request within one month.
The minimum energy efficiency standard applied will be set at E and from 1st April 2018, the regulations will apply upon the granting of a new tenancy to a new tenant or new tenancy to an existing tenant. The regulations will then be extended to apply to all privately rented property from 1st April 2020. In effect this appears to mean that any property that cannot achieve an EPC rating of A-E could no longer be let.
The concern for farms and rural estates was that very many farm and estate cottages would struggle to achieve and EPC rating of A-E. This is because they are often old and built using traditional construction methods, which may make them attractive country cottages but it is often difficult to bring them up to modern energy efficiency standards without very significant expenditure.
If these properties were to become un-lettable this would put real pressure of the availability of housing in the countryside which in turn would have serious implications for rural communities where affordable housing is already a serious problem.
But, crucially, there is the ability for landlords to seek exemptions. Essentially, where a landlord considers an exemption applies allowing them to let their property below the minimum energy efficiency standard the landlord will need to provide such evidence to a centralised register, the “PRS Exemption Register.” Landlords may be required to submit relevant evidence and details of their exemption to the Register. The Government may use this information to assist local authorities in targeting their enforcement activity.
Thus it appears that if the cost of upgrading a property is greater than the financial benefit to be gained from the upgrade the landlord may be able to apply for an exemption. The regulations will detail specific circumstances under which a landlord can refuse consent for the tenant to implement energy efficiency measures. Landlords can also claim exemption where a tenant refuses their proposals to improve efficiency.
There will be an appeals tribunal system. The regulations will include a number of safeguards to ensure that only appropriate, permissible and cost effective improvements are required under the regulations.
In time it seems these regulations will bite as energy prices rise in the long term, but in the short term it appears band F and G properties which cannot be cost effectively upgraded to band E or above will not be relegated to the scrap heap immediately although we will wait to see if the rental value of such properties will be impacted.
James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk
When the Department of Energy and Climate Change (DECC) published the regulations, this led to immediate reports that properties with an EPC rating in Bands F and G would become un-lettable from 1st April 2018.
The basic premise of the regulations is that from 1st April 2016 domestic tenants will have the right to request consent to make energy efficiency improvements under the regulations that have been laid before Parliament. Landlords would need to provide a response to the tenant’s request within one month.
The minimum energy efficiency standard applied will be set at E and from 1st April 2018, the regulations will apply upon the granting of a new tenancy to a new tenant or new tenancy to an existing tenant. The regulations will then be extended to apply to all privately rented property from 1st April 2020. In effect this appears to mean that any property that cannot achieve an EPC rating of A-E could no longer be let.
The concern for farms and rural estates was that very many farm and estate cottages would struggle to achieve and EPC rating of A-E. This is because they are often old and built using traditional construction methods, which may make them attractive country cottages but it is often difficult to bring them up to modern energy efficiency standards without very significant expenditure.
If these properties were to become un-lettable this would put real pressure of the availability of housing in the countryside which in turn would have serious implications for rural communities where affordable housing is already a serious problem.
But, crucially, there is the ability for landlords to seek exemptions. Essentially, where a landlord considers an exemption applies allowing them to let their property below the minimum energy efficiency standard the landlord will need to provide such evidence to a centralised register, the “PRS Exemption Register.” Landlords may be required to submit relevant evidence and details of their exemption to the Register. The Government may use this information to assist local authorities in targeting their enforcement activity.
Thus it appears that if the cost of upgrading a property is greater than the financial benefit to be gained from the upgrade the landlord may be able to apply for an exemption. The regulations will detail specific circumstances under which a landlord can refuse consent for the tenant to implement energy efficiency measures. Landlords can also claim exemption where a tenant refuses their proposals to improve efficiency.
There will be an appeals tribunal system. The regulations will include a number of safeguards to ensure that only appropriate, permissible and cost effective improvements are required under the regulations.
In time it seems these regulations will bite as energy prices rise in the long term, but in the short term it appears band F and G properties which cannot be cost effectively upgraded to band E or above will not be relegated to the scrap heap immediately although we will wait to see if the rental value of such properties will be impacted.
James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk
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