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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.

 

Farming

Badger Trust urges new Welsh Government to reject cull

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Polling shows strong public opposition to killing badgers in Wales

BADGER Trust is calling on Wales’ incoming government to rule out badger culling, after new polling suggested widespread public opposition to killing badgers as part of efforts to tackle bovine TB.

The call comes as a newly expanded Senedd begins its work and a new Welsh Government prepares to set out its priorities.

Badger Trust said ministers and political parties should reject calls for culling and instead focus on “evidence-led cattle measures” to control the disease.

Polling carried out by RSPCA Cymru found that only 27% of people in Wales support badger culling, while 46% are opposed. The survey also found that 63% of respondents were uncomfortable with killing badgers, and 68% opposed the use of public money to fund culling.

The organisation said the figures showed bovine TB was likely to remain one of the most significant animal welfare issues facing Wales in the coming years.

As Plaid Cymru prepares to form a minority government, with Rhun ap Iorwerth MS expected to become Wales’ new First Minister, Badger Trust is urging all parties to take note of public feeling on the issue.

More than half of those surveyed, 51.8%, said they would be less likely to support a political party that backs badger culling, compared with just 7.2% who said they would be more likely to do so.

The poll also found strong support for wildlife protection, with 98% of respondents describing it as important and 69% saying it was “very important”. Around 73% said they were concerned about badger welfare, while 53.8% described badgers as iconic British mammals and 43.5% said they were heavily misunderstood.

Nigel Palmer, chief executive of Badger Trust, said: “The people of Wales have spoken loud and clear: badger culling is a vote loser for the new government.

“It’s clear how much the people of Wales value their badgers as an integral part of their landscape. This underlines the fact that badgers belong here.”

Mr Palmer said Wales should learn from what he described as “politically driven mistakes” in England, where more than 250,000 badgers have been culled over the past 13 years.

He said: “Farmers need support to tackle bovine TB where the infections arise — within the national cattle population, particularly in the larger herds.

“The answer lies in evidence-based cattle measures, delivered in partnership with vets and farmers, not in the unnecessary killing of wildlife.”

Badger Trust said Wales had already shown that bovine TB could be reduced in cattle without killing badgers, through science-led cattle measures aimed at tackling the disease more effectively and humanely.

The charity said the message from the Welsh public was clear, and that Wales should not follow England “down the path of badger culling”.

Badger Trust said: “It’s time to end the badger blame game. The science is solid, and the public has voiced its opinion; now it is time for the new government to listen and act accordingly.”

Badger Trust is the leading voice for badgers across England and Wales and works with local badger groups through its Badgers Belong Here campaign.

 

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Farming

Welsh dairy farmers face ‘perfect storm’ as costs surge

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Rising fuel and fertiliser bills add to pressure as milk prices remain below production costs

WELSH dairy farmers are being warned that rising fuel and fertiliser costs are threatening the viability of family farms already under pressure from weak milk prices.

The Farmers’ Union of Wales says the sector is being squeezed by a combination of global instability, higher input prices and returns that are failing to keep pace with the cost of production.

The union said recent tensions in the Gulf, together with fears over disruption to energy supplies through the Strait of Hormuz, had contributed to sharp rises in costs facing farmers.

Fertiliser prices are reported to have increased by up to 53% compared with levels before the latest conflict, while red diesel costs have effectively doubled in recent months.

The pressure comes at a difficult time for dairy producers, many of whom the FUW says are still receiving milk prices below the cost of production.

The situation could worsen as the spring flush brings higher milk volumes, which can place further downward pressure on farmgate prices and add to cashflow difficulties.

The Central Association of Agricultural Valuers has also warned that tightening oil markets could reach a tipping point in early June, with higher energy costs already feeding through into agriculture.

In response, the FUW has met major lenders, including HSBC and NatWest, to discuss support for farming businesses. The talks focused on flexibility over lending, overdrafts and cashflow arrangements.

The union is urging farmers who are worried about their finances to speak to banks, accountants and advisers at the earliest opportunity.

FUW President Ian Rickman said Welsh farmers were facing a “perfect storm” of international instability and soaring input costs.

He said: “The sharp increases we are seeing in fertiliser and fuel costs are placing enormous pressure on farm businesses at a time when many dairy farmers are already producing milk below the cost of production.

“These challenges are completely outside farmers’ control, yet they are having a direct and immediate impact on the viability of family farms and rural communities across Wales.

“It is therefore vital that farmers speak openly and early with their banks and professional advisers if they are facing difficulties.

“Our recent discussions with major lenders have been constructive. It is encouraging that banks recognise the exceptional circumstances currently affecting the agricultural sector. Flexibility and understanding will be crucial in helping viable farm businesses navigate this period of uncertainty.”

 

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Farming

Plaid urged to move faster on farming reforms amid subsidy concerns

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Welsh Conservatives accuse Plaid Cymru of failing farmers as ministers call for patience over changes to agricultural support

CONCERNS over the pace of farming reforms in Wales have intensified after the Welsh Conservatives accused the Welsh Government of failing to act quickly enough on promised changes to agricultural subsidy schemes.

The criticism comes after Welsh Government Rural Resilience and Sustainability Minister, Llyr Gruffydd, urged farmers to be patient as major changes to support payments continue to be developed.

Speaking to ITV Wales, Mr Gruffydd acknowledged that “change is difficult” as the government seeks to reshape agricultural support across rural Wales. The comments come at a time of growing unease among parts of the farming community over the future of post-Brexit subsidy arrangements and concerns about financial pressures facing farms.

The reforms centre on replacing previous support systems with a new approach intended to balance food production, environmental sustainability and rural resilience. However, some farmers and unions have warned that uncertainty over payments and policy changes risks damaging confidence in the sector.

Reacting to the minister’s remarks, Welsh Conservative Shadow Farming Minister, Andrew RT Davies, said Plaid Cymru was not moving quickly enough to deliver on commitments made to Welsh farmers.

Mr Davies said: “Change is not difficult – contrary to Plaid Cymru separatists’ claims.

“If the will is there, there’s no reason reforms can’t be implemented immediately.

“Plaid Cymru separatists must fulfil their promises to Welsh farmers now.”

The comments reflect wider political tensions over the direction of farming policy in Wales, with opposition parties arguing that delays and uncertainty are creating anxiety for agricultural businesses already facing rising costs and economic pressures.

Farming remains a major part of the Welsh economy, particularly in rural counties such as Pembrokeshire, Carmarthenshire and Ceredigion, where many communities rely heavily on agriculture and associated industries.

The Welsh Government has previously said changes to support schemes are aimed at creating a more sustainable long-term future for farming, though ministers have acknowledged the transition period will take time and may prove challenging for some in the industry.

The debate over subsidy reform is likely to remain a key political battleground as the government finalises details of its future support model and seeks to reassure farmers concerned about their livelihoods.

 

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