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Welcome to our first agriculture update for UK farmers of 2016.

Please do register for our agriculture newsletter if you would like to receive the agriculture update each month, along with our quarterly agriculture newsletter and topical sector developments.

A British exit from the EU?

What would a British exit from the EU mean for UK farmers? Leading economist, Professor Buckwell, suggests that an exit could deliver long-term benefits at the cost of a short-term hardship. However, the long-term gains would depend on the legislative and policy environment that replaces the CAP and the industry’s competitiveness.

Some form of direct payment would also have to come from the UK government, but what form is not yet known of course. An EU exit could be a wake up call for the industry and a catalyst for change.

Farm minister George Eustice is backing the EU exit campaign, putting himself in opposition to DEFRA secretary Liz Truss. At the NFA annual conference in Birmingham Mr Eustice outlined fledgling policies, suggesting the possibility of retaining an area payment together with accreditation schemes. He suggested that concerns over the level of agricultural support in a Brexit were unfounded.

Liz Truss, however, suggested that a vote to leave the EU was a leap in the dark. She pointed to the size of the single market and the ability to export products freely without trade barriers.

The Yorkshire Agricultural Society has also outlined some potential disadvantages of an EU exit:

Support payments – The Treasury may see an exit as an opportunity to reduce the cost of support payments to farmers.

Regulation – Lobby groups would continue to exert pressure for more stringent regulation of agriculture.

Labour – Labour availability may be reduced, particularly in soft fruit and horticulture.

Trade – Trade agreements, tariffs and subsidies will have to be negotiated. Farming may be overshadowed by other sectors.

Grants for farm-based projects

Countryside Productivity Scheme (CPS)

  • Targeted at improving productivity e.g. automated feed systems, real-time animal monitoring or LED lighting
  • Grants are £2,500 to £1m, for up to 40% of costs
  • Administered by RPA

Growth Programme

  • Aims to create rural jobs
  • Target is £25k of funding for one job
  • Generally targets larger projects over £100k
  • Administered by LEP’s

Leader

  • Smaller projects is the focus
  • Administered by Local Action Groups (LAGs)

Other agriculture news…

  • The RPA wants the bulk of BPS claims submitted online in 2016.
  • December 2015 was among the mildest on record in the UK and 2016 is forecast to be among the warmest years globally.
  • Farm Business Income (FBI) is expected to fall significantly in the year to February 2016. FBI is defined as profit before unpaid labour or reinvtesmnets. Cereals £34k (down 24%); general cropping £43k (down 17%); pigs £26.5 (down 46%) and dairy £46.5k (down 45%).
  • UK farm income per worker fell by 19.3% in the UK between 2014 and 2015. On average in the Euro zone it fell 4.3% according to Eurostat estimates. The largest fall was Germany at 37.6%. Croatia saw a rise of 21.5%. In total, 13 Euro countries saw a rise.
  • Land values in Yorkshire and The Humber will be difficult to predict in 2016. Average values remained the same throughout 2015 and 2015. Average value for all types were £6,800 per acre with prime arable land £10,100 per acre. Low commodity prices will make land less attractive in general.
  • The last Land Rover Defender has been produced after 67 years.

More from our agriculture experts

You can find all of our latest agriculture sector news and newsletters here.

If you are looking for advice in a particular area, please get in touch with your usual Hawsons contact.

Alternatively, we offer all new clients a free initial meeting to have a discussion about their own personal circumstances – find out more or book your free initial meeting here. We have offices in Sheffield, Doncaster and Northampton.

Richard Marsh is managing partner in the Doncaster office and joined Hawsons after working for two major international accounting firms. He has over 30 years’ experience in dealing with the needs of businesses of all sizes and acts for a wide range of commercial clients. For more details and advice, please contact Richard on [email protected] or 01302 367 262.

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