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Total Income From Farming (TIFF)
DEFRA figures show a huge decline in farm incomes in 2015, with TIFF falling by 29% to £3.77bn – equalling around £1.5bn being wiped off farm incomes in the year. In comparison, the TIFF decline in 2014 was just 3%.
The main reasons for the steep decline in TIFF have been the slump in commodity prices globally and the strength of sterling reducing support payments.
Looking ahead to the rest of the year and Andersons Farm Consultants forecast that TIFF for 2016 will be just under £4bn, based on a weaker pound. Uncertainty surrounding the EU referendum has weakened the sterling and, if this continues, then the sterling equivalent of support payments will rise and exports will be more price competitive.
No succession plan for 70% of young farmers
A Farmers Weekly survey of 61 young farmers has found that 70% do not have a succession plan in place.
Of those that responded, almost one in three had not spoken at all with their parents about the family farm’s future. Fear of offending and embarrassment to parents were found to be the main causes of non-discussion of the issue.
Other reasons cited included:
- They’re too busy
- They’re worried about hearing the wrong thing
- There’s plenty of time to think about succession planning in the future
Succession is widely held as one of the central management issues in the agriculture sector, and is an issue farmers need to start planning ahead for. Whether you’re thinking of passing on the business to the next generation or selling the business to a third party, succession only really succeeds optimally when it is prepared for.
NFU Mutual is launching a social media campaign to help farmers make succession plans.
Other agriculture news…
- The crisis in commodity prices appears to be putting downward pressure on rents, the Tenant Farmers Association says.
- Bank of England figures to the end of February show an 8.7% rise year-on-year in agricultural borrowing. Commodity price pressure and late BPS are the main causes.
- Potato prices have risen in the week to 29 April. The GB average has risen by £6.98 per tonne to £234.24 per tonne.
- A Farmers Weekly survey has found that 58% of farmers back an EU exit, in findings which run counter to most farming unions. Sovereignty, immigration and EU regulation and policies were the factors. The NFU’s 90-strong ruling council, however, has passed a resolution in favour of the UK remaining in the EU.
- The National Non Food Crops Centres (NNFCC) report on Anaerobic Digestion Deployment in the UK says the dramatic growth of the UK biogas sector is unlikely to continue much beyond 2017, as a result of reduced support and greater investor uncertainty. 130 AD plants came online in the last year (total 316) and 454 projects are in development.
- Oilseed rape prices continue to rise as global soya bean demand outstrips production. The US Department of Agriculture is forecasting the world crop to fall from 68mt to 66mt. There are lower plantings in Canada, whilst Brazil and Argentina’s production estimates have fallen.
- The RPA has announced that 9000 farmers are still waiting for BPS payments, four months after the payment window opened. 50% Treasury funded bridging payments are now planned.
- British beef and lamb exports to the USA have moved closer after talks between the respective farm ministers. A 15-year ban was lifted in November 2013 for all EU imports.
- 10,842 tractors above 50 HP were sold in 2015. The first 3 months of this year 2,382 agricultural tractors were registered for road use, a decline of 9.5%. The average size of tractors remained largely unchanged at 158 HP. Sales of tractors from 100-160 HP suffered the most. Most geographical areas saw a fall, but the East Midlands, West Midlands and Yorkshire and the Humber bought more tractors than last year.
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Martin Wilmott acts as lead engagement partner for a wide range of corporate and non-corporate clients in the Doncaster office, especially in the Legal and professional, agricultural, transport, property and construction, manufacturing, healthcare and hospitality sectors. For more information or advice on anything covered in this article please contact Martin on [email protected] or 01302 367 262.