Farming Updates

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The Defra Secretary has re-stated the Government aim of producing the 25 year plans for Food and Farming and The Environment. The Plans were delayed from the summer due to the referendum and with agriculture accounting for over 70% of UK land use the two plans are interlinked.

The United Nation’s Food and Agricultural Organisation has called on the industry to do more to achieve better levels of nutrition and food security. It has also said that over-use of antibiotics in farming needs to be curbed if increasing resistance to them is to be halted. World leaders agreed that action should be taken, at the UN General Assembly.

The co-operative, First Milk, has announced a price increase of 2p/litre for its producers starting in October, the largest increase since 2007. Arla is raising its price by 1.6p at the same time. More rises are expected as the market continues to firm up.

If elected, Labour have promised to end the badger cull, extend the powers of the Grocery Code Adjudicator and introduce an Agricultural Sector Council. The latter would oversee all areas of employment and wages. The wages boards were abolished in England but retained in Scotland.

Information on the future of farm subsidies has been limited since the headline statement guaranteeing them until 2020. It now seems that the guarantee for the Basic Payment Scheme will only apply up until the December 2019 payment window and will not cover the 2020 harvest. Support may continue for other multi-year EU funded schemes. Scottish and Welsh ministers also appear to have been told of a number of other schemes that will not be covered.

The euro exchange rate for calculating the 2016 Basic Payment Scheme payments was set on 30th September at €1 = £0.852, reflecting the current relative weakness of the pound sterling against the euro. The rate last year was £0.73 meaning that farmers will receive around 16% more this year.
Farming leaders are calling for more research to improve crop quality and yields. This comes on the back of the 2016 harvest results where both wheat and barley yields have been less than expected. Whilst both are within the rolling five-year average they compare poorly with rising global yields. The situation is much worse for oilseed rape with the 2016 yield 32% below the average.

The latest survey of farmland sales, in 2016 to date, shows farmers account for less than 50% of transactions for the first time since 1996, with private and institutional investors playing a bigger role. Prices have weakened on the back of lower farm profitability.