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Farming & Rural Business Community

The view from the Chair

Author: Keith Phillips, Chair of the Farming & Rural Business Community advisory group

Published: 10 Apr 2024

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In both my last review and the webinar our committee recently hosted, I mentioned one of the biggest challenges facing many farmers this year – the significantly wet autumn and spring they have faced. In the words of Farmers Weekly, it has been “wetter than an otter’s pocket”.

Despite this, farmers appear to be resilient and it was really interesting to me to hear how other parts of the country are somewhat drier and have better growing conditions. I also recently attended a local farmers group, where it was clear farmers were improvising where they could by altering their cropping plans or entering various DEFRA schemes to give the land a break to take the best agronomic advantages of the situation as they could.

Another challenge for many of the growers, reliant on more intensive labour to harvest their crops, has been the continued rise in the living wage; (10% in effect from 5 April 2024) and the knock-on effect this has had on labour rates in general. This has been acutely hard as the product prices have at best stayed fairly flat and, in many cases, fallen off compared to 2022. This has seriously squeezed margins for many of these farmers and many have decided to call it a day.

As part of the Budget and Prime Ministerial appearance at the NFU conference, we have seen a number of what it is hoped are positive announcements. The number of schemes under the new SFI have been extended so there are now over 170 options, I am led to believe; there was the announcement of an additional £20m to be added to the current £220m package of funding for technology and Innovation; a future round of £70m of funding is to come and finally, the treasury issued their long awaited follow up to the consultation on the taxation of environmental schemes and this brought a strong recognition of the points our own group and many other industry representatives were seeking.

We have made an application to be part of the panel to now work with the Treasury to bring these good intentions into workable guidelines.

From the NFU conference, we also learnt that 19,000 farms have taken up the free advice offered under the farm resilience scheme, and I would encourage all members to encourage their farmers to take advantage of this scheme if at all possible. Whilst this is a good take up, it represents about a 1/3 of all farms, or as one of my fellow members on the committee highlighted, this means 2/3 of farmers have not taken it up!

There have been many comments from farmers over the past few years that the Government policy of “public money for public good” really was a path that led to farmers being encouraged to make the countryside look good or meet carbon targets. It was not about feeding the country. As such, many farmers had a very jaundiced view of even considering the many schemes available. It was therefore very interesting to hear from the Prime Minister that in his view food production was for the “public good”.

Will this mean the emphasis of the schemes will change? Will the recently announced limit on land under SFI mean the fears of farmers in this area will be alleviated? How will the election affect policy in this area?

All these are questions that the next 6-9 months will perhaps clarify. What I do see, is still a resilient farming industry keen to keep growing food in a profitable way, who do, in the most part, have environmental concerns in the way they farm. Are they better off or worse under a UK only scheme? That is hard to say but we have all seen protests in Europe over the current EU policies, and the current evidence is that DEFRA and the Government are happy to listen to farmers and industry about policy and how best to implement Government policy whilst trying to ensure profitable farming.

The big question to be answered is whether, once they have listened, DEFRA and the Government will ensure the schemes on offer are the right ones to balance their desires and to create an environment in which farmers feel, weather allowing, they can grow crops profitably.

*The views expressed are the author's and not ICAEW's