Agricultural business experts came together to offer advice to farmers at an event last week.
Farming Matters, our annual agricultural event, took place at Harlaxton Manor in Grantham on Thursday 16 February.
We were joined by speakers from Wilkin Chapman, Brown&Co, and the NFU who discussed topical issues facing farmers. These include ways to capitalise on the new support schemes that will be replacing the Basic Payment Scheme, the risks of informal or undocumented contracts, and why biodiversity represents an attractive opportunity for farmers and landowners
A common theme among the speakers at Farming Matters was the impending end to the current Basic Payment Scheme (BPS) - the biggest of the rural grants and payments that provide help to the farming industry.
2023 is the last year that BPS will be paid, and the government has announced that it will be replaced by a new scheme called Delinked Payments which will run from 2024 to 2027.
Experts at the Farming Matters event were consistent in urging farmers to act now to ensure they receive support.
Richard Wordsworth, Senior Advisor (Support Schemes) at the NFU, said:
“Farmers need to claim and be eligible for BPS in 2023 to receive delinked payments. So it is vitally important that farmers submit their claims for BPS this year, even if they think they will only receive a small amount, to ensure that they are eligible for the new scheme once that kicks in next year.”
Richard's slides can be found here.
The speakers provided clarity now that more information is known about the future of support for farmers. The new schemes include:
All of these new schemes offer an opportunity for farmers. Chris Sheldon, Agricultural Business Consultant at Brown&Co, explained:
“For farmers, it will be vital to build the future support schemes around their farms and adapt to accommodate them. It can be a case of changing farm strategy to ‘harvest’ future subsidies.
“Farmers should continue to produce food and make use of the support schemes available to them.”
Another key theme of the Farming Matters event was a focus on farming partnerships and, specifically, ensuring that partnerships are properly documented.
Catherine Harris, Partner and Head of Agriculture at Wilkin Chapman, said:
“Partnerships can be problematic if they are either left unwritten or go out of date. A partnership document needs to be a living, breathing document and tailored to each specific farming family.
“By not documenting a partnership, farmers are putting themselves at the mercy of quite archaic laws such as the Partnership Act of 1890, which is still cited in disputes to this day. The Partnership Act can automatically end partnerships upon the death of a partner, so the stakes are high if there is no written agreement in place.”
Catherine's slides can be found here.
2022 saw largely excellent results for arable farmers as the war in Ukraine caused global shortages and therefore pushed crop prices up by over 60%.
Mark Chatterton, Director and Head of Agriculture at Duncan & Toplis, urged arable farmers to consider forward budgets, factoring in the high levels of inflation. He said:
“Tax is high this year and in January 2024 tax will also be high so it is important for farmers to plan for it. Taxable profit can be very different from account profit so now is the time to budget and link profit and loss to cash flow.”
The final speaker at the event was Tim Atkinson, Land Agent and Divisional Partner at Brown&Co.
Tim delved into the Biodiversity Net Gain Act which will come into force in November 2023.
The act says that all land developers must enhance biodiversity by 10% and that all planning applications must include a biodiversity net gain plan.
Tim explained how this could present an opportunity for farmers:
“Under the act, land is split into nature units, and units can range in price from £15,000 to £30,000 - which can equate to around £55,000 per acre - depending on the habitat of the land.
“If developers can’t enhance biodiversity by 10% on the sites they’re building on they will need to buy units elsewhere in the local area. Therefore, creating nature units and selling them to developers could be a very profitable venture for farmers.”
Farming Matters was attended by over 150 delegates comprising local farmers and representatives from each of the companies involved in the event.