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Farming

Farm diversification more difficult in Wales

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Diversification: Upland farming makes task difficult

ALMOST half of UK farmers are planning to pursue diversified income streams to support their agricultural businesses, according to new research from leading rural insurer NFU Mutual.
With changes to Government support and the way Britain trades with the rest of the world ahead, farmers are diversifying their businesses to boost profitability and fortify their farms for the future.
Forty-eight per cent of farmers are planning to set up or expand diversification businesses following Brexit, moving into new areas such as tourism, hospitality, retail and renewable energy.
This figure has doubled since NFU Mutual carried out similar research in 2018 and found 23 per cent of farmers were planning to expand or start diversification enterprises.
The sharp increase in diversification comes as agriculture undergoes the biggest change to funding in decades following the UK’s exit from the European Union.
In a report published on Friday (Feb 7) NFU Mutual provides advice on setting up new diversification businesses and looks at case studies of successful schemes from wedding venues and glamping to kefir dairy products and cosmetics.
“The next seven years will be crucial for the farming industry,” explained Chris Walsh, NFU Mutual’s Farm Specialist. “Because of this, many farmers are looking at new business opportunities to spread their risk.
“Farmers have always had to adapt to changing times, and a number have been diversifying for decades. But even more are now deciding to support their agricultural work with new ideas.
“Whether it’s building holiday cottages, launching a wedding venue, or opening a farm shop, not only can these new businesses supplement the existing farm, they often provide other members of the family with a crucial role in the business.
“Our research shows nearly half of UK farmers are either looking into setting up new businesses on their land or expanding existing diversification ideas, with a quarter planning to diversify to create business opportunities for family members.
“There is only room for a certain number of farm shops, holiday cottages and wedding venues so farmers planning to diversify need to do careful research and costings before they start converting cow sheds into cafes.
“Farmers and their families also need to have the right skills – particularly if they’re going to be working with the public. It’s a big change looking after a demanding wedding party if you’re used to being on a hillside with a flock of sheep all day.”
The report stresses the importance of detailed planning to minimise risks to the public and employees and make insurance of new diversification schemes straightforward. It also highlights the importance of looking at the financial implications of setting up non-farming activities to avoid higher Inheritance Tax Bills.
Looking ahead, the report suggests there may be new opportunities for farmers to access Government financial support for diversification schemes as changes to agricultural support are rolled out.
DEFRA statistics show that diversification activity brought in £740m of income in 2018/19 – up 6% on the previous year.
NFU Mutual’s report, together with a series of videos and podcasts produced to help farmers considering diversification, is now available to download at nfumutual.co.uk/diversification
NFU MUTUAL DIVERSIFICATION ADVICE
Diversification means using your farm’s assets, such as its land, buildings or machinery to develop a new business activity. Diversification ventures usually set out to provide additional revenue and can complement the agricultural activity or may even, over time, replace it.
Before you start, consider:
• Do you have the skills, resources and commitment to make it work or would it be a distraction from the core farm business?
• Have you fully reviewed your farm business and identified strengths and areas where you can add value to your existing model?
• What are your assets – from people, land, location, buildings, finance to skills – and have you realised their full potential?
• What market and demand is there for your diversification venture?
• What makes your farm unique and sets you apart from the competition?
• Have you asked the experts for advice? For example, speak to insurers at the planning stage to ensure you understand the risks and have the right level of cover to meet your needs.
DIVERSIFICATION TOUGHER IN WALES
Farming businesses in Wales face many hurdles, such as poor upland land quality, and remoteness from centres of population. These factors severely restrict business resilience and diversification.
Improving farm efficiency, developing non-food and non-crop revenues, participation in agri-environmental schemes, or access to rural development funding and business support, are more difficult in Wales than elsewhere.
When compared with England, Welsh farms are also smaller and less well resourced and receive an average of £3,300 less in funding.
Although diversification on Welsh farms has grown over the past decade, diversification revenues on Welsh farms represented on average only 3.4% of total farm revenues in 2017, compared to an average of 7.7% in England.
That suggests reliance on increased farm diversification to build resilience in Wales remains an optimistic strategy. In the worst-case post-Brexit scenario diversification revenues might need to increase up to tenfold to replace other lost revenues.
Farms in Wales depend on income streams separate from the main farming business.
A range of actions might support the continued growth in diversified income. However, although they could help deliver wider social and environmental public goods, they might not support farming, community identity or build economically sustainable farm businesses.
Welsh Government policy might want to pull in one direction but reality suggests that its goals will be far harder to achieve than sunny optimism and glib soundbites suggest.

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Farming

£1,000 bursary award available to Pembrokeshire agricultural students

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PEMBROKESHIRE Agricultural Society’s £1,000 Bursary Award is now open for applications from students studying agriculture, veterinary science, agricultural engineering, food technology, forestry or other subjects allied to agriculture.

The Student Bursary Award 2024 is available to students, from Pembrokeshire, who are currently studying or have been accepted to start their studies. They can apply for this financial support to assist with their chosen college or career path.

Last year’s winner of the award was Lottie Wilson from Hayscastle. Lottie was studying agriculture at the University of Nottingham when she applied for the bursary. When she is at home she is a general dairy farm worker as well as a lambing hand and a calving beef herd assistant. In 2021 she was the top agriculture student at Hartpury College.

Robert James, Chairman of the Society’s Bursary Committee said, “I would urge all Pembrokeshire students who study subjects that are clearly aligned to agriculture to apply for this bursary as it won’t only assist with your studies but will also give you great experiences such as undertaking an interview which is a key employment skill. It will also assist in your future career within the agriculture industry.”

“A panel of independent judges will draw up a short list of candidates who will be interviewed and the winning candidate will be asked to give a short presentation at a future meeting of the society’s show council.

“The standard of applications has always been exceptional which gives a lot of heart that there are a lot of very talented young people in our community. We are very much looking forward to receiving applications for this year’s bursary and hearing from the younger generation.”  

Qualifying students must not have won the student bursary on a previous occasion, the applicant must be studying or has been accepted to study agriculture or allied subjects at a UK college or university at A-Level or higher and the applicant’s family home must be in Pembrokeshire.

The bursary is tax free and will be awarded to the student who, in the opinion of the panel of judges, has submitted the best dissertation on how the bursary will assist them to complete their course of study.

Further details and the entry form can be found online: Student Bursary Award | Pembrokeshire County Show | Pembs Agricultural Society (pembsshow.org)  or by calling the show office: 01437 764331. The closing date for applications is noon on Monday, 1 July 2024.

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Farmers who knowingly kept cattle with bovine TB on farm fined

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THREE members of a Pembrokeshire farming family have been sentenced for deliberately swapping cattle ear tags; actions that saw animals with Bovine Tuberculosis (TB) reactors remain on the farm.

Bovine Tuberculosis is a zoonotic infection that can infect many species, including humans and wildlife, though transmission to humans in the UK is very rare as a result of control measures in place across the agricultural and food industries.

The actions of Edward, Charles and Henry Hartt displayed widespread illegality and created an unacceptable and serious risk to animal health.

The Hartts operate a large scale dairy and beef farming enterprise – Messrs EW Hartt & Sons – at Longford Farm, Clynderwen, comprising about 2800 cattle.

The three men were sentenced at Swansea Crown Court on Monday, March 4th for offences committed under the Cattle Identification (Wales) Regulations 2007; legislation which underpins cattle management, disease control and traceability systems put in place to ensure the safety of the entire farming industry.

All three defendants had previously pleaded guilty to 12 counts on March 25th, 2022.
The court heard that where higher value cattle had tested positive for TB and would be valued for compensation, poorer quality animals would then be sent for slaughter in its place.

This meant that infected animals were kept on the farm with a significant risk of spreading the disease to other animals and jeopardising the success of the TB eradication programme.

Their retention would undoubtedly allow the disease to persist on farm, slowing the progress of eradication within the herd and the general cattle population and increasing costs to the Welsh Government and taxpayer.

The practice would also have resulted in the slaughter of healthy animals not actually infected with TB.
It was also determined that a portion of farm’s milk would have come from TB reactors that should have been removed, which under food safety legislation was banned from entering the food chain.

Where poorer cattle tested positive, evidence showed that they were substituted at valuation for higher value animals, attracting a higher level of compensation – but with the more valuable animals subsequently retained and the lower value TB reactors sent for slaughter.

Each defendant was fined a total of £24,000 – £2,000 for each count on the indictment.

The sentencing reflected the heightened TB risk of reactors remaining on farm, TB lesions present in cattle and a clear risk that misidentified animals could have entered the food chain.

As well as the significant fine, associated action had been taken against the defendants under the Proceeds of Crime Act 2002 (POCA).

This legislation was introduced with the aim of recovering assets, including money, acquired through criminal activity.

The use of POCA is particularly pertinent when it is so manifestly in the public interest to ensure criminal activity is not rewarded.

The criminal benefit arising in connection with the offending would have been derived through a mix of pathways.

This included TB compensation payments, sale of illegal stock, sale of milk from illegally retained stock, as well as the wider benefits gained by the farming enterprise.

The Hartts’ actions enabled a steady and continual expansion of the business, on a stronger financial footing, to the detriment of other farms in a competitive market.

This resulted in confiscation orders of £217,906 against each defendant jointly and severally to reflect the ‘criminal benefit’ associated with the offending.

The court also awarded the Council costs of £94,569.

The case brought by Pembrokeshire County Council followed an in-depth investigation by officers from the Council’s Public Protection Animal Health and Welfare Team, working in conjunction with the Animal and Plant Health Agency veterinary officers and other regulatory partners.

The investigation was triggered following the identification of anomalies at the farm in June 2019.

The subsequent investigations were complex and protracted over the remainder of the year, involving a number of inspections and visits, DNA sampling of milking cows, detailed audit and cross-referencing of farm records, ear tag and freeze brand (markings on the animal) checks, post-mortems and blood samples.

In one instance remarked upon by the Judge, the freeze brand of a milking cow was altered.
It was later discovered that her ear tags had been changed twice. DNA testing later proved that the animal should have previously left the farm.

Of 828 animals checked as part of the investigation, 123 had discrepancies in relation to their origin and identity, equivalent to 15% of the stock.

The extent and nature of the tagging issues and deliberate changes in identity dwarfed anything previously encountered by officers, and highly unlikely to be by error or mistake.
It was subsequently discovered that the farming operation had received TB compensation payments at a level far above most other farms.

The farm was one of only two in Wales to have had TB present for over 20 years. Since 2009 the farm had received more than £3 million in compensation payments, more than any other farm in Wales.

The prosecution maintained that the large scale illegality underpinned the foundations of the entire farming enterprise over a considerable period of time.

In December 2019, Food Standards Agency veterinary officers placed a stop on 19 carcases and associated offal/edible co-products from two lots of cattle sent for slaughter by the farm, that were destined for the human food chain.

This was due to irregularities concerning the identification and origin of certain animals and potential food chain implications.

Following the conclusion of the court case, Cllr Michelle Bateman, Cabinet Member for Housing Operations and Regulatory Services, welcomed the level of sentence.

She said: “This case will have resulted in unnecessary cost and a drain on resources for those involved in the TB eradication programme, including the major use of public money by Welsh Government who fund the implementation of the compensation scheme.
“It also greatly risks the health of neighbouring herds through unnecessary contamination of the environment as well as damaging the farming industry and public confidence in the safety of milk and meat.
“I congratulate our Council officers and all agencies in bringing this case successfully to court. I hope that this action and sentence will send a message that this sort of illegal behaviour will not be tolerated.”

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Kurtz leads farming protest on the Senedd’s steps

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LOCAL Senedd Member Samuel Kurtz helped lead the largest protest in the history of the Senedd, as thousands of farmers and those from rural Wales descended on Cardiff Bay.

As unrest has grown in farming circles following the publication of the Welsh Labour Government’s consultation on the Sustainable Farming Scheme (SFS), focus has also been drawn on the failing Bovine TB eradication strategy and the all-Wales Nitrate Vulnerable Zone (NVZs).

These three policies, which are directly the responsibility of the Welsh Labour Government, have caused untold stress, frustration and anger in rural Wales, as hundreds from West Wales made the journey in protest.

A Welsh Labour Government commissioned economic assessment showed that the SFS could see 5,500 jobs lost in rural Wales, with an economic hit of over £199 million.  

Samuel Kurtz, the Senedd Member for Carmarthen West and South Pembrokeshire, and Shadow Minister for Rural Affairs, who has long stood against the Welsh Labour Government’s failures, spoke to the protestors from the steps of the Senedd.

Speaking to the protest, Samuel stressed the importance of the rural community, and how the current policies risk both the current and future generations who live in rural Wales.

Following the protest, Samuel added:

“Speaking at the protest outside the Senedd was one of the proudest moments of my life, both as a politician and as a farmer’s son. But it is a sorry state that the Welsh Labour Government have let it get this far.

“The momentum is with the industry now and whomever becomes Wales’ next First Minister, and next Rural Affairs Minister, must work hard on the SFS, NVZs, and Bovine Tb, to repair a broken relationship between government and the agricultural sector.

“Can I thank all those who attended the protest for the respect and order that they showed. It was the largest of its kind and if the message hasn’t got through to the Welsh Government now, I’m not sure it ever will.”

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