Readers may remember me reporting previously on the new virus called the Schmallenberg virus (SBV) which causes fetal abnormalities in cattle and sheep. The virus was first identified in 2011 and is carried by midges which infect animals when they bite them, rather like mosquitoes can infect people with malaria.
However, in the case of SBV the problem arises when the midge bites and infects a pregnant ewe or cow. The virus then causes problems with the development of the fetus resulting in a range of deformities which may include bent limbs and fixed joints, twisted neck or spine and brain deformities. The nature of the deformity depends on when during the pregnancy the infection took place.
Studies have shown that infection is widespread throughout the UK which is not surprising as there seems very little that can be done to prevent livestock being bitten by midges. In this area I am aware of a number of clients who have reported problems with the virus and certainly the early lambing ewes seem to have suffered worse. This is because they would have been in the early stages of pregnancy during the late summer and early autumn when the midges would have been active.
This appears to be supported by the experience of local vets. For example Paddy Gordon of the Shepton Vet Group said, “We saw sporadic cases of the disease last year, however diagnostic costs mean that confirmed cases are unknown. We saw most lamb deformities in January and the majority of affected calves were seen in March and April”.
When the virus was first discovered there was no means of protecting livestock against the disease but scientists have now produced a vaccine which has been licensed for use in non-pregnant animals only. Cattle require two vaccinations approximately four weeks apart while sheep only require a single dose of the vaccine. Onset of immunity then takes place about three weeks after the last vaccination although how long immunity will last is not known and annual boosters are recommended.
However at a cost of approximately £3 per dose many farmers will think twice about treating all their livestock. In this respect Paddy Gordon commented, “Farmers will want to target the treatment on those animals which are most likely to be at risk of fetal deformities. We do not know how many animals will have developed a natural immunity to the virus and so we will have to wait and see what happens this year to fertility and calving/lambing next spring. We see the vaccine being used by early lambing sheep flocks in particular, probably smallholders with a few pet or pedigree sheep to protect and in some beef herds and maiden heifers according to concern and experience. One problem is that the vaccine has no licence for use in pregnant animals, and we would not recommend its use in pregnant animals due to the possibility of abortion due to vaccine response or stress of handling. This rules out use in most dairy herds which are all year round calving.”
So, although SBV has been nothing like as catastrophic to livestock farmers as BSE or Foot and Mouth Disease, it has certainly infected many livestock in this area we wait to see how many livestock will develop natural immunity, the long term impact of the disease on fertility and the role vaccination may play in the future.
James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk
As we approach the end of June there is serious concern that a deal will not be reached on the reform of the Common Agricultural Policy (CAP) before the EU presidency transfers from Ireland to Lithuania.
It is generally thought that if a deal is not reached under the Irish presidency there could be a long wait before there will be clarity as to what the reforms will look like which will be very damaging for farmers across Europe.
DEFRA secretary Owen Paterson said, "I think there's a 60:40 sporting chance we will get a deal on CAP reform under the Irish presidency. If not, next year's EU parliamentary elections will delay any deal even further."
Some of the major sticking points include whether or not there should be a ceiling on direct payments for large farms, what environmental or “greening” measures will become compulsory as of the scheme and how payments should be redistributed more fairly across the EU. All these matters have the capacity to become very contentious because of the very different types of farming across Europe.
In the UK the average size of our farms tend to be larger than most of the rest of Europe and so our farmers are not keen on limiting payments to large farms. Further, in England we already have a variety of environmental stewardship schemes in to which farmers have entered large areas of land and these farmers will not want to be compelled to take further land out of production under some form of compulsory greening measures. The obvious way forward from our perspective would be to allow such schemes to qualify as part of the compulsory greening measures but other countries in the EU will no doubt disagree.
As far as the level of payments is concerned, the countries which have entered the EU more recently are campaigning for their payments to be increased but this will be at the cost of those countries who already have higher payments.
Talks to try to resolve the current impasse are due to start in Luxembourg on 24th June and if I was to hazard a guess it is likely that an agreement will be reached because failure to do so would be incredibly damaging for farmers across Europe. This is not just because the support payments make a crucial contribution to a farmer’s ability to make a profit but also because there is nothing worse than a prolonged period of uncertainty to hold back investment in and development of any industry and agriculture is no exception in this respect.
James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk
What a difference a week of fine weather makes – silage making has been going at full throttle and even the recently drilled maize crops have started to grow. But that is not a moment too soon because everything is running about 3 week’s behind a usual season and as a result late planted crops will struggle to produce a sensible yield.
Early indications are that although the quality of silage crops will be reasonable they will be “light” and so farmers will still be hoping this summer proves a little more “normal” than last year with sunshine, rain and warmth in equal measure to encourage the growth of grass for and 2nd and 3rd cut silage crops.
Cereal crops are also a long way behind where one would normally expect them to be and with so many spring sown crops being planted this year rather than autumn sown “winter” crops, this emphasises the appearance of a late season. This will also have an impact on yields because although the input costs are generally lower for spring rather than winter crops, yields are also lower and so the impact of last year’s wet weather will be reflected in this year’s harvest output.
But it is not only the weather that has perked up a bit, so have global commodity markets which point to the potential for price rises for dairy farmers on cheese contracts in particular. In the past week, two major companies, Dairy Crest and First Milk have announced price rises for their milk suppliers on cheese contracts that will kick in next month.
There is also talk of cheese supplies tightening later in the year because it is believed less cheese was made earlier in the year following a move by processors to divert milk for cheese into other products. This could lead to shortages towards the back end of the year giving rise to optimism for further milk price rises still to come.
Whether such price rises will come to fruition is not known but at least there is reason for optimism in the cheese markets at present and let’s just hope this is also reflected in the weather continues as we move on in to the summer.
James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk
By the time you read this article the first shots may already have been fired in west Somerset heralding the start of the controversial Badger cull. As many readers will be aware the cull has been introduced by the government on an experimental basis at two sites here in the West Country as part of an overall strategy to bring Bovine TB in cattle under control.
This is a subject that will continue to divide opinion but what is for certain is that the current strategy to bring is simply not working. Around 28,000 cattle were slaughtered last year and if current trends continue this number will rise further and it is estimated will cost the taxpayer in the order of £1bn over the next 10 years.
That is not to mention the suffering imposed on the cattle and badgers which become infected by the disease and the financial and emotional stress this disease has on farmers themselves. I know of many farmers in this area who have been very badly affected; some have even been prevented from restocking their farms because the incidence of TB is so high, while others just describe the feeling of dread every time they have a TB test.
It is this side of the debate that seems to be almost entirely forgotten; farmers may receive compensation for the cattle which are lost but they suffer the consequential losses such as the ongoing loss of milk or the need to rear calves whose mothers may have been slaughtered for example. This is made even worse if some farmers are then not allowed to restock at all. But there is also the emotional strain on farmers and their families which is quite simply not appreciated.
So the audience which attended the breakfast meeting that opened proceedings at the Royal Bath and West Show last week were pleased to hear Agriculture Minister and Somerton and Frome MP, David Heath categorically state the government’s commitment to the Badger cull. David Heath made no bones about the fact that this is a controversial matter but he also made the point very clearly that no other country in the world has ever been able to bring bovine TB under control without culling the wildlife vectors of the disease.
He gave examples of Ireland, New Zealand and Australia where this is or has happened but he also emphasised the cull will be part of a much wider programme of measures. These will include pre-movement testing in cattle and other on farm bio-security measures which are already in place. He also explained that research in to effective vaccines in badgers and cattle will be ongoing but he emphasised that there is little immediate prospect of these being able to be used widely. This is partly because they have not been perfected in a form that can be administered in an economically viable manner in badgers and partly because of EU regulation which will not allow the use of the current vaccines in cattle.
Finally David Heath explained that it is likely to be a long process to bring TB under control. He thought it may take as long as 25 years and although an effective vaccine for cattle will be one of the long term aims, culling of badgers will form an important part of government policy at least in the short term.
James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk
It seems almost incredible after the wet year we have just experienced to be calling for rain, but that is in fact what is needed. After last year’s wet weather many farmers were simply unable to access land to plant autumn crops and so they were desperate for the rain to stop. Therefore, farmers were pleased to find conditions became drier in March and April which enabled many to plant spring crops.
However, the dry weather has been accompanied by strong, drying winds which were initially also bitterly cold and although recently it has warmed up a little the wind in particular has dried the surface of the soil too much which is making it difficult for crops to thrive. The rain we have had in the last week or so will be welcome but the return to low temperatures and strong winds will not be helpful.
Many readers will probably say that farmers are always complaining about the weather, but in the last few years I think they have had ample reason to do so and I just can’t help wondering whether we are beginning to experience the first real evidence of climate change. The unpredictable and extreme conditions, going from drought to flood and hot to cold as we have seen in recent years is exactly what climate scientists have been predicting would happen.
I suspect the problem is that it will only be in hindsight that we will be able to say for certain whether what we are experiencing now is the start of climate change. However, what is for certain is that the unpredictable and extreme weather patterns we have experienced in recent years pose a real challenge for farmers to produce food. This is of concern to farmers here in mid-Somerset whose profitability will undoubtedly be affected but it is also of concern at a global level which is one of the reasons why reducing carbon dioxide emissions is on the political agenda.
As a consequence we are now seeing solar parks springing up around the countryside as the government drives policies forward to subsidise renewable energy projects. Yet we also here talk of the potential of fracking here in Mendip where natural gas may be extracted from the rocks beneath our local landscape which if burned will presumably contribute further to climate change.
It seems to me that a comprehensive energy and food policy is required. For example it would be ironic in the extreme to find renewable energy projects on the surface, removing good agricultural land from production and at the same time find gas being extracted from the rocks beneath which will ultimately release more carbon dioxide in to the atmosphere. This just does not seem to make sense – but then when government gets involved with subsidising farming, renewable energy projects or conservation measures this very often seems to result in contradictory policies and unintended consequences.
James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk
The misery which bovine tuberculosis (BTB) brings to the British farming industry continues unabated and latest figures released indicate that the disease problem is getting worse rather than better despite increased bio-security measures which have been introduced in an attempt to control the disease.
Last week Defra released the most up to date figures which showed that 3,215 cattle were slaughtered in January alone, which was a 24.2% increase on the number slaughtered in the previous January. Indeed in total 186,664 cattle have been slaughtered in the Great Britain since 1st January 2008 of which 37,754 were slaughtered in 2012 as compared to 34,245 in 2011.
At a local level matters are also getting worse. This has been brought home to me in recent weeks in particular as I have visited a number of dairy farms in mid-Somerset who are suffering serious problems as a result of the disease.
Some farms may only have experienced a low number of reactors and so although they may have only had one or two cattle lost to the disease, the consequential losses in terms of restriction on the movement and sale of cattle can be very serious. This is a particular problem for dairy farmers where many may have relied on selling calves at a young age but find themselves having to hold on to these animals, in many cases being forced to house and rear them for 2 years or more.
This obviously puts a huge strain on resources, whether it is labour needed to help rear the extra cattle, buildings in which to house the cattle or simply cash required to pay for the above and the extra feed and bedding which may also be required.
These problems are compounded when a significant number of cattle are taken from a herd and again it is dairy farmers who face the most difficult challenges. This is because although farmers are compensated for the animal which is lost, there is no compensation available for the consequential losses. Thus if a dairy cow is lost, although compensation will be received for the cow, this will not be enough to purchase a similar replacement animal and nor will there be compensation for the loss in milk production until the cow can be replaced.
It is estimated the cost to a farmer of an average BTB breakdown is around £12,000 and where a significant number of cows are lost this will be considerably more. So it is no wonder farmers are so desperate to see action taken to reduce the incidence of this devastating disease and although it is appreciated that culling badgers will not be a panacea it is seen as one of the weapons which will have to be introduced if this disease is to be brought under control.
James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk
Last Wednesday saw over 100 farmers flock to the Bath and West Showground on a cold and wet evening to attend a seminar presented by Old Mill Accountants, Barclays Bank and Carter Jonas.
Oliver McEntyre of Barclays Bank spoke about the cost of funding, why banking margins have changed, how banks look at a funding proposals and the importance of producing a business plan and budgets when applying for extra funding from any bank.
I then presented a round up on farmland prices and recent trends in agricultural rents while my colleague Thomas Ireland gave a presentation on current planning issues. In this context he highlighted one or two very important recent developments, including the announcement earlier this year by central government that it is intended permitted development rights are to be relaxed in certain circumstances. Most notably this may give farmers the opportunity to change the use of an office building to a house without the need to make a formal planning application.
Anne Gardner Thorpe of Old Mill then spoke on the importance of tax planning in the context of Capital Taxes and Mike Butler, Old Mill’s Senior Partner, spoke about other tax issues including the advantages of a company structure as opposed to a partnership where income tax is concerned.
He went on to highlight that following the budget, which had taken place earlier in the day, the advantages of a company structure had become even more obvious as the government had signalled their intention to reduce Corporation Tax to 20% for all companies. However he also noted there were one or two less helpful announcements.
In particular, he explained there is an anti-avoidance provision which was announced that could significantly increase farmers’ exposure to an Inheritance Tax (IHT) charge. Mike warned, “Most agricultural or business assets qualify for Inheritance Tax relief to protect against the break-up of farms upon death. For many years it has been sensible to secure borrowing against assets that don’t qualify for this relief, which effectively reduces their value on death, and hence lowers the IHT burden.”
However, from July, it appears that this will no longer be possible, as borrowings will first be offset against assets that do qualify for Agricultural or Business Property Relief, potentially leading to huge increases in IHT.
To take everyone’s mind off such unpleasant thoughts, the evening then ended with a wholesome supper of cottage pie which was enjoyed by all before the attendees left, hopefully with food for thought as well as food in their bellies.
James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk
