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Farming

Confidence drops as markets stay volatile

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British farming has faced massive challenges in 2015: Meurig Raymond

British farming has faced massive challenges in 2015: Meurig Raymond

INCREASED volatility and falling commodity prices across the sectors have seen farmers’ confidence drop to lower levels than last year, a new survey by the NFU has revealed. Confidence, specifically in the arable and dairy sectors, has declined significantly from 12 months ago, but farmers across the industry have told NFU that the three-year forecast is much more positive. As part of our sixth annual confidence survey, members told the NFU that they expected negative impacts on their businesses in the coming year relating to regulation and legislation (69%); CAP reform (51%); output prices (56%) and input prices (46%). Output prices are the second most important factor affecting confidence, as members have seen their margins squeezed as a result of the fall in farmgate prices greater than the reduction in their costs of production.
The survey also shows that in the last two years twice as many farmers have seen their profits declining, with 49% of respondents now reporting declining profits (42% last year). Some 7% think their business may not survive – the highest figure in any year so far. Those figures were even more worrying in the dairy sector, where almost 20% of dairy respondents declared that their business may not survive, a rise from 3% in 2014. NFU President Meurig Raymond said: “This year has seen British farming face massive challenges, not least of all falling farmgate prices, particularly within the dairy and arable sectors. “Given the levels of volatility we have seen across the industry it is no surprise that we have seen farmer confidence in the negative.
It shows very clearly that we are absolutely correct to urge Defra and RPA to make every effort to speed delivery of BPS payments and that we press processors and retailers for a fairer return for the highquality food that farmers supply. “Regulation remains the key blocker for our members’ confidence. This gives a clear message that government must to do all that it can to ease regulatory pressure. Confidence is critical because it influences investment and production intentions. If we want our farms to compete in an increasingly global market place and make the most of emerging export opportunities, we need government action rather than rhetoric when it comes to reducing red tape. This is why NFU is calling for action in 2016 to reduce the frequency of farm inspections and improve their coordination.
“Our research has shown that looking forward, farmers have a generally optimistic outlook on their medium-term prospects. The government has a golden opportunity, in its 25-year Food and Farming Strategy, to map the course for a more confident and profitable industry. The NFU urges government, retailers and the public to back British farming to ensure this optimism is not misplaced.” More farmers said they want to invest in diversification, training and energy efficiency in the three years to come. Those intentions are backed by the higher levels of borrowing in agriculture registered for the first nine months of the year.
The volatility of markets was a key part of evidence given by the NFU to House of Lords committee on December 16. The NFU has given evidence to a group of Peers on how agricultural price volatility impacts farm businesses. Head of food and farming Phil Bicknell appeared before the House of Lords Energy and Environment Sub- Committee as part of its enquiry into market prices and wider resilience among farmers. It follows a similar enquiry being held by MPs on the House of Commons Efra Select Committee into farmgate prices.
With volatility characterising most agricultural markets, and the associated pressures on cash flow, profitability and long term business planning, the committee heard about the challenges of price volatility faced by NFU members. Mr Bicknell emphasised that sustained price volatility risks the viability of farm businesses, leads to reduced investment levels, and is a challenge for the whole food supply chain rather than just a farming issue.
He said: “Volatility is an ever increasing characteristic of agricultural markets, particularly as we’ve seen farm policy back away from market management and control to less marketdistorting policy tools. “Farming is a very resilient industry. Our industry is made up of farmers who are past masters at dealing with anything that’s thrown at them – whether that’s periods of low prices or the recent devastating floods that hit farming communities in Northern England. “But it’s important that we’re an industry that thrives rather than just survives and is geared up for future food production. A boom and bust cycle of prices benefits can be damaging in the long run.”

 

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Farming

Farming Unions set out key Senedd election priorities

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WALES’ two farming Unions, NFU Cymru and the Farmers’ Union of Wales (FUW) have used their joint fringe event at the Welsh Liberal Democrats’ spring conference in Cardiff, to set out some of their shared asks for the next Senedd and Welsh Government term to assembled delegates and politicians.

In the event chaired by Brecon and Radnor MP, David Chadwick, key messages from both Unions’ Senedd elections manifestos were communicated to the audience. Amongst these was the need for the SFS to provide stability for farmers in Wales, the necessity of fair and sufficient funding for Welsh agriculture, a genuinely comprehensive TB eradication strategy which combats the disease in all its sources, a risk-based and evidence-led approach to water quality, and a review of the regulatory burden faced by farmers.

With recent global events now placing additional financial pressures on the sector, NFU Cymru President Abi Reader said: “For well over a decade the amount of funding available to support Welsh farmers has remained cash-flat. Inflation has therefore made significant inroads into the real terms value of this funding, whilst farmers are also facing significant and rising costs associated with regulatory and environmental compliance. The unfolding conflict in the Middle East has underscored yet again the importance of ensuring that there is sufficient and secure funding available to support Welsh agriculture, and to ensure our farming families are able to carry on producing the food we need in a volatile world.”

Developing Abi’s comments further FUW President, Mr Ian Rickman said: “Had the agricultural budget kept pace with inflation it would now be well in excess of £500 million.   We need the next Welsh Government to commit to an inflation adjusted, ring-fenced, multi-annual budget which matches our shared ambitions for the sustainable growth of the sector, with the majority of that funding directed towards stability, productivity, and efficiency gains on-farm.”

Delegates also heard from the Unions of how future uplifts to agricultural support funding in Wales are now subject to the Barnett formula, with both NFU Cymru and the FUW setting out their shared concerns about the disadvantage such an arrangement means for Wales. NFU Cymru President Abi Reader said: “When agriculture plays a more significant role in the national economy than in some other parts of the UK, we need to ensure that future uplifts to agricultural support fairly reflect the size and scale of the sector in Wales, rather than being tied to population size via the Barnett formula.”

There were also heartfelt thanks from both Presidents for the support of the Welsh Liberal Democrats during the 14-month battle with the UK Government over its inheritance tax changes. With Abi Reader commenting: “After a long, hard-fought campaign, a fantastic outcome was secured in December when we saw the threshold at which IHT kicks in raised significantly. Whilst the taxation of business assets as if they were personal wealth remains misguided, the adjustment of the thresholds upwards, combined with the transferability of the allowance now places most family farms in Wales outside the reach of this destructive tax and that is something to be welcomed.”

Bringing proceedings to a close Mr Rickman said: “Both Unions have today emphasised how fair and sustainable funding, evidence-based policymaking and regulatory reform will all be crucial to safeguarding the viability and long-term sustainability of Welsh agriculture. 

On behalf of the FUW and NFU Cymru I want to say a big thank you to David Chadwick MP for chairing this afternoon’s session and to all those who came along, listened, and contributed to the discussion. Between now and May the 7th we look forward to continuing constructive engagement with all parties to ensure our shared asks are delivered for the benefit of our farmers, rural communities, and the wider Welsh economy.”

 

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Farming

Farmers’ Union warns proposed lamb welfare changes risk unintended consequences

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THE FUW has raised serious concerns over proposals to change the rules governing lamb castration and tail docking, warning that the measures could have unintended consequences for both animal welfare and sheep farming businesses.

Responding to the UK Government’s consultation on lamb welfare, the union said that while farmers recognise the importance of maintaining high welfare standards, the proposals as currently drafted are impractical and fail to reflect the realities of sheep farming across Wales and the wider UK.

The FUW stressed that although castration and tail docking do cause pain, they remain important management tools used to prevent serious welfare problems throughout an animal’s life. These procedures reduce the risk of fly strike, prevent unintended pregnancies in ewe lambs and minimise injuries caused by aggressive behaviour in ram lambs.

One of the union’s main concerns is a proposal requiring the use of pain relief medicines that are not currently authorised for use in young lambs. The FUW argues that the suggestion is premature because the range of approved medicines remains limited. At present, such treatments are only available through the veterinary cascade, meaning they have not been specifically tested or licensed for use in sheep.

The union also warned that the proposals could place significant pressure on veterinary services during the busy lambing season, potentially creating delays in treatment and increasing administrative burdens for both farmers and vets.

According to the FUW, the changes could introduce new risks, including accidental overdosing due to extremely small dose volumes, a higher chance of infection at injection sites and additional stress on lambs caused by repeated handling.

Concerns were also raised over plans to extend the upper age limit for routine castration and tail docking from seven days to three months. Farmers believe carrying out the procedures on older, larger lambs could increase welfare problems and infection risks.

While members broadly supported delaying procedures long enough for lambs to receive colostrum and bond with their mothers, the union said a strict 24-hour rule would not be practical across all farming systems.

The FUW also warned that introducing the proposals without equivalent standards for imported lamb could place UK sheep producers at a competitive disadvantage. Additional veterinary involvement, medicine costs and increased labour could significantly raise production costs for domestic farmers.

The union said the measures would particularly affect extensive upland farms, which play an important role in sustaining rural communities, maintaining landscapes and supporting the Welsh language.

FUW Animal Health and Dairy Committee chair Gerwyn Williams said: “Farmers care deeply about the welfare of their livestock and these procedures are never carried out lightly. However, the proposals outlined in this consultation do not reflect the practical realities of sheep farming and risk creating greater welfare problems than those they aim to solve.

“While we support efforts to reduce pain wherever possible, the lack of authorised medicines for young lambs and the reliance on off-label treatments raises serious safety and practical concerns. There is a real risk these proposals could increase stress on animals, worsen health and welfare issues and place further pressure on already stretched veterinary services.”

FUW President Ian Rickman added that any future policy must be developed in close partnership with farmers, vets and industry experts.

“It is essential that any new legislation genuinely improves animal welfare without creating unintended consequences for farmers or the animals in their care,” he said.

The union is calling for further research and deeper engagement with the farming sector before any legislative changes are introduced, arguing that future welfare policies must be practical, workable and effective across the wide range of sheep farming systems operating across the UK.

 

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Business

Medical equipment scheme at Castle Villa farm gets approval

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A CALL for the relocation of a Pembrokeshire farm diversification scheme which packages and distributes specialist medical equipment across Europe has been given the final go-ahead by councillors.

In an application recommended for refusal at the March meeting of Pembrokeshire County Council, Mr Van Der Spoel sought permission for the relocation and expansion of an existing farm diversification business into an existing agricultural building at Castle Villa, Hayscastle.

The proposals were before full council rather than its planning committee as members had twice gone against officer recommendations of refusal with a ‘minded to’ support for the scheme, and a ‘cooling off’ period, meaning a final decision would need to be made by all councillors.

Last July a similar application by Mr Van Der Spoel, through agent Harries Planning Design Management, was refused by planning officers.

A supporting statement for that application said the Dutch-born applicant, together with his wife and adult daughter ran the farm diversification business packing specialist medical insulated insulin supplies at their sheep farm.

It added: “The business run from this site is FRIO ASTRID EURO Ltd, which has a franchise agreement with FRIO UK. This business has been run from Castle Villa since its incorporation in 1998. The business was initially run from the stable building on the farmyard at Castle Villa.

“The business set-up involves receiving stock from FRIO UK in Wolfscastle, packaging orders and distributing the stock to seven Western Europe countries.”

Wolfscastle-based FRIO produces the world’s first patented insulin cooling wallet which keeps insulin and other temperature-sensitive medicines cool and safe.

The scheme for the business, said to have outgrown its current site, was refused by county planners on grounds including a lack of “robust evidence” to prove it couldn’t be sited within a nearby settlement or an allocated employment site, such as Haverfordwest.

The latest application was recommended for refusal on similar grounds.

Agent Wyn Harries has previously said his client’s business, selling into Holland, Belgium, Switzerland, and Germany, accounted for some 20 per cent of FRIO UK’s trade on its own, adding that previous articles on the planning application in the Western Telegraph had shown a great deal of public support for the applicants.

At the January meeting, local member, and chair of the planning committee, Cllr Mark Carter moved approval, delegated to senior officers on receipt of a Section 106 legal agreement, saying the proposals had community council support, adding it was “hard not to support a business that keeps local jobs and keeps a family farm viable”.

Cllr Michelle Bateman, whose neighbouring ward has FRIO UK’s base, said she was “fully supportive” of Cllr Carter’s call.

Members were warned of the danger of potentially setting a precedent by going against officer recommendations, with both former leader Cllr David Simpson and Cllr Michael Williams expressing their concerns at going against the officer recommendations.

Cllr Carter’s call, against the recommendation of refusal, was passed by 28 votes to 15, with one abstention.

 

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