Facing up to the Challenges

Facing up to the Challenges

Brexit is just one of a number of challenges facing farmers in the next few years. Farmers have the choice of listing future problems, analysing what they may mean, and then planning for the future - what ever that may bring. Or else they plan to go on pretty much as they have been and don’t see the point in planning for an uncertain future. 

Delegates at the winter conference on Nov 15 of Worcester based agricultural accountants Ballards were given a presentation by Practical Farm Ideas editor Mike Donovan who told them that a head in the sand approach is unlikely to work too well over the next few years. The signs of change are just too great.  Mike told the delegates “It is a racing certainty that Brexit will result in changes to the trading relationships in food and agri products with European countries. Of course we don’t know as yet now what these will be, and it may well be many months before anything is decided. But the chances are that farm economics will become tougher for many farmers.” 

The packed hall had farmers, and accountants, fascinated in the detail of methods to improve farm efficiency -  agricultural productivity 

He went on to point out that the Brexit trading relations with the EU are just one part of the uncertainty. Another is the direct payment subsidies which make up half of UK farmers’ income. Once out of the EU the UK farm support will be directed from London and all the signs are for a major reduction. The price of oil, together with interest rates are further major issues which will impact all farmers, whatever their enterprise or efficiency.

Mike was explaining the contents of this slide - all practical ideas which make farm work easier, cheaper, safer

Drill down and there are other additional challenges: farmers will face continuing controls over inputs: products like neonics and glyphosate, recently given a five year reprieve - a subject in itself - are both under a microscope which is being operated by the public and politicians with limited knowledge and others, like antibiotics and other products may well be more closely controlled. Livestock regulations are very likely to change. Housing cattle and access to outside loafing areas, ducks being given access to water for swimming and splashing… it’s a dense and growing minefield which the farmer will have to negotiate. 

What should farmers be doing now, in this time of uncertainty?

Advisors all tell farmers they need to become more efficient. What does this mean in practice?  For decades farmers have been led to think efficiency means investment, new machinery - a new tractor and plough which gets more work done in the hour.  Farmers with ambitions and helpful bankers will go ahead and make sure their farming is bang up to date. Others will resist the lure of efficiency and be happy with the way they are doing things at present.

Mike went on to explain that farmers have improved efficiency without spending a fortune. His slides showed a great many successful adaptations and home made machines and implements. 

* a cheap pick-up fitted with 650mm tyres that run at 9ps. It is a great substitute for the ATV with the slug pelleter and is used for many jobs.  

* an in-field calving box which makes a better job calving a 250 cow suckler herd outside. Making it easier to secure the cow means reduced calf, and cow, losses. 

* cluster flushing done with a system that was home built ten years ago has massively reduced mastitis - one slide shows the herd’s annual NMR summary with zero mastitis cases in a 140 cow herd. It cost £2k to make. 

* using worn-out Astro-Turf for cow tracks.

* installing vent pipes in grain is like putting in pedestals into a full grain store

* converting an old dumper truck to a self propelled hoe for sugar beet - and many other possible applications

* a hitch that fits the front of the Manitou handler

* converting an old grain trailer into a batch crop dryer

* security locks for a Land Rover Defender with Ifor Williams canopy

* the Farm Ideas workshop miracle - using candle wax as a releasing fluid. Heat and apply a candle and the wax finds it’s way between the rusted parts

* making a removable link box for your ATV

* silage is covered by tyre mats made by bolting 6 x 3 rows of tyres together

* how to wash a field water trough. Keep them really clean and give the cattle uncomtaminated water

Farming with biology. 

Soil loss pictures. Cover crops; direct drilling; home built direct drill based on Bomford cultivator; crimper roller

Farm Safety needs a total re-think. 

We now work iin the most dangerous industry there is. 30-40 people killed annually; 15,000 have injuries that require a hospital; Pictures show a  disabled young farmer’s wheelchair ramp to get into tractor; a home designed power step to lift a disabled driver into cab. Positive pictures: a handler for dual wheels that means they get used when they are needed; orange beacon on an ATV; garden designed into a child’s play area; trailer safety brake; front mirror looks down the road; ATV link box stops flip over. 

Today’s interest rates allow farmers with the right set-up access to capital. Last week I met a farmer who that day had fixed a £1.5million loan fixed for 12 years at 2.5%. It sounds like cheap money - yet the interest is going to cost nearly £40k a year, so he’s looking for a return of £75k. That’s not going to come from replacing new kit for old.       

What can Mr Average Farmer do? 

Improving the outcome of tasks - which can often be achieved with some simple adjustments to procedure and machinery. Many advisors fail to recognise this. They front up innovations such as the new mini robots before they have been used commercially, and with no economics and figures attached to them. Professors and others compare them with robotic milking parlours without saying anything about the huge differences. The only thing they share is the word robot. 

The advice is to search out and apply great simple ideas. The funds at risk are incredibly small. Mike mentions the effects of aerating grassland, using the one he built in 1988. A 30% increase in grass production by year 4 from a machine which cost £250 to make (say £1,000 today) and costs no more to tow around than a roller is a no-brainer as they say. Yet very few farmers have taken the initiative and made one for themselves. And that’s the problem - 90 per cent of farmers will only make changes when they see everyone else doing it. The simpler the idea, the longer it takes to get used. 

The presentation went well, and the email in thanks 

Hi Mike

Thank you so much for coming last night. It was great to meet you and the feedback on the talks has been fantastic. I hope you got back safe last night.

I will have a check with the venue regarding the box of cards and let you know.

In the meantime, I would really like to keep in touch and hopefully meet up again.

Thanks once again for a fun and informative talk.

Best Wishes

Steve

Steven Jones BSc (Hons)

Business Development Director

Ballard Dale Syree Watson LLP

Tel:      +44 (0) 1905 794504

Fax:     +44 (0) 1905 795281

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Is there a future for smallholders?

Summary:  Is the small farm becoming extinct? Are property prices making a few acres no more than a dream for many?   This analysis suggests there are opportunities and a future, and gives good reasons why the small farm sector should not be abandoned by either politicians or farming unions.

“What are the prospects for smallholders today?” was a question posed by a reader this morning. “The small farms seem to be disappearing around here (Derbyshire) with the big boys expanding like nobody’s business. Are there any small farms left near you?”  Farms are increasing in size, and big ones expand at the expense of the smaller ones. With houses in the country fetching high prices there’s an incentive for farms to be divided. 

Small farms are being sucked up by larger ones by:

1.  Sellers can divide the property into two. The house, buildings and five acres, and there's the land to be sold in one or a number of lots.

2.  A farmer wanting more land buys a complete farm and then divides it into house + buildings as one lot which is sold and the land which is kept.

3.  Smaller farmers can decide to stop day-to-day farming yet remain an ‘active farmer’ through contract agreements. Or rent land on tenancies drafted to maintain eligibility for Agricultural Property Relief for inheritance tax.

4.  Faster tractors with larger loads increase the feasible range of operations for off-lying land. 

My caller wanted to know the future. I replied it is surely based on how entrepreneurial they are. Many use their limited land much the same as a regular farmer, selling stock in the mart, but the returns are very small, if positive at all. It surely is a life-style choice, nothing more. But if the microscopic income from their small farm is enhanced by a generous pension, or work off the holding, or a separate and profitable business on the holding, why not enjoy the the life-style? Far more interesting than many other occupations, like golf or cruising.

The current popularity of ‘country’ - 4x4s, Agas, clothing, boots, farm fresh food, dogs and so on - stimulates the attraction and value of country properties. Those in possession have a useful asset, even if it’s not one producing much income. Those aspiring to farm will find smallholdings don’t provide the entrée into the business that it once did. The initial 20 - 60 acre holding is over-priced for those wanting to farm conventionally. 

Yet a few acres and some reasonable buildings plus a polytunnel of two have the potential to provide a worthwhile rural business, but it won’t be selling a few fat lambs or a steer or two, or selling a few tons of corn. 

Direct selling to the final customer is obviously key, and the range of vegetables, herbs, flowers and exotics is considerable. Specialising in off-beat varieties of plants or livestock can be very significant. The popularity of 'bronze' turkeys among the food writers has developed a demand which, a few years ago, was quite specialised. Less common varieties can often find a premium price which more than off-sets lower yield. 

Providing a service for local, and less local farmers is another route to financial stability. The smallholding has the potential to provide a base, be it farm contracting, secretarial work or something entirely off-piste which matches the skills and interests with the local, or even national market. While many standard farm contractors are off-shoots of conventional farm businesses, others can build up successful operations in pest control, woodland work as well as fencing and other needed jobs which the ever-expanding conventional farmer needs to buy in. 

The future of the smallholder is far from dull and those involved shouldn’t see themselves as a dying breed. Regulations and risks will always be a part of their lives, as they are for anyone with any type of business. The popularity of their main asset, the property itself, says they are not alone in valuing both life-style as well as finding they can achieve an income which pays the bills and maybe more besides.


Small farms post-Brexit

The chances of Whitehall and Westminster downgrading the farming sector is likely. The demands on public funds from health, education and defence are very likely to overshadow the needs of farming. Not only will this threaten payments it is likely to result in am effort to reduce the administrative costs of farm subsidies.
Cutting out small farmers would make a big reduction in the work of the Rural Payments Agency, as well as making the job of application easier as well. HMRC have simplified VAT for small companies, so there’s a precedent. Farm subsidies for small holdings could be made on a formula or algorithm that is easy to use.
There’s a danger that payments might be reduced, on the basis the holdings are part-time, hobby sized, unimportant. It is an argument which could be quite logically used by the farming unions in their negotiations, on the basis their membership is made up of larger full time farmers.
This would be a mistake. Small farms, family units, are an important source of British born labour and provides starters with the chance of getting going. Building a farm business from a low base remains possible.   

Further reading: 

• Swiss dairy farmer rents out his cows - and keeps their milk!  Alpine 20 cow dairy herd engages those interested in the traditional way of life and cheese production, and has self-catering accommodation for members to use. Practical Farm Ideas 25-3
• Rabbit netting machine rolls out and buries netting - 1000m/hr  Practical Farm Ideas 19-4
• Garden playground ideas, all made in farm workshop  Practical Farm Ideas 18-2

Every issue has innovations and ideas with the potential of building to a business based in a smallholding.