FACTS FROM FIGURES CUSTOMER CALL By Roger W Dean, Dean Agricultural Associates
It goes without saying that the financial well-being of the feed industry’s customers is of paramount importance to companies manufacturing livestock feed. And, at the present time, that importance is more than paramount. The UK’s impending exit from the European Union brings with it the presumed requirement to devise a new, British, Agricultural Policy to succeed whatever regime that devolves from the Common Agricultural Policy. The range of options is enormous, from casting agriculture adrift in a global melting pot to creating what would amount to a British facsimile of the Common Agriculture Policy. Whatever approach is adopted, following the debate that must now ensue, a decision must be founded on the empirical facts rather than on a wish-list conjured out of thin air.
the day-to-day business of running a farm, the balance remaining after the cost of inputs has been subtracted from the farm’s output. The second item is agri-environmental payments. Agri-environmental schemes are voluntary agreements that pay farmers and other land managers to manage their land in an environmentally friendly way. The first such scheme in the UK, Environmentally Sensitive Areas, was launched in 1987. The schemes are run by Natural England on behalf of DEFRA. Such schemes are supported through the Rural Development Programme for England, with EU funding from the European Agricultural Fund for Rural Development, part of the Common Agricultural Policy, transfers - known as modulation - from the Single Farm Payment (SFP), and with matched funding from the UK Treasury. The third source of Farm Business Income is described as
As observed previously in this column, the decision of the British people to exit the European Union was driven to a considerable if unquantifiable extent by the alleged excesses of national resources paid for the Common Agricultural Policy. ‘Subsidies, damned subsidies’, the cry went up from a number of
media outlets and their political allies, portraying farmers as ungrateful or, even, undeserving recipient of unjustified funding from the EU but ultimately provided by, amongst other sources, UK taxpayers. Farmers, it was implied, lived in a virtual lap of luxury at the taxpayers’ expense. One authoritative but highly-placed source was quoted as saying that the biggest single issue influencing the decision of the UK electorate at the time of the referendum vote on 23 June 2016 was the alleged ‘inequity’ of the Common Agricultural Policy, seen as the principal source of voters’ opposition to continued UK membership of the EU. And it is indeed true that a significant proportion of UK agriculture’s Farm Business Income comes via Brussels. In the simplest terms, Table 1 shows the breakdown of Farm Business Incomes for England during the period running, approximately, from 1 March 2015 to 28 February 2016. The data, which was published in late October 2016, includes the update to the original estimates made in late January 2016. Before embarking on an analysis of the 2015-16 data, it is worthwhile reminding ourselves of what Farm Business Income means. Essentially, it has four components. First, there is Agriculture,
‘Diversified Income’. This is precisely what it means: income generated from activities outside the basic business of agriculture. To take the most cynical approach, this might mean the provision of cream teas or a camp site; a more realistic view might include a range of significant economic and other activities. Finally, there are payments made under the Basic Payments Scheme. This replaced the old Single Payments Scheme and it is this constituent of Farm Business Income upon which much of the focus over the future shape and conduct of British agriculture will be directed.
First, some background. The Farm Business Survey (FBS) is conducted each year to collect
business information from around 2,400 commercial farm businesses in England and Wales. The Survey provides information on the financial position and physical and economic performance of farm businesses, the better to inform policy decisions on matters which affect farm businesses and to enable analysis of the impacts of policy options. It is intended to serve the needs of farmers, farming in general and land management interest groups, government at both the national and European level, government partners, and those involved in research. The primary objective of the Survey’s results is to contrast the performance or other business characteristics of different groupings of farm, such as between regions or other geographical or environmental designations, farm types and farm size, right down to the age or education of the farmers involved. Two other technical aspects are of significance. To ensure
consistency in harvest or crop year and comparability of subsidies payable within any one Farm Business Survey year, only farms which have accounting years ending between 31 December and 30 April inclusive are included in the Farm Business Survey for England and Wales, although for Scotland, accounting years up to 31 May are allowed.
FEED COMPOUNDER MAY/JUNE 2017 PAGE 19
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