James Gillies MBIAC MIArgM – james-gillies.com
Never before have we seen such massive change in UK farming. It’s happening now and affects all farmers, those in Oxfordshire being no exception.
So what’s going on? There are a number of direct impacts, including two critical factors: a reduction in financial support and increased input costs.
Firstly, the Farm Basic Payment (BPS), or subsidy as it used to be known, is being withdrawn gradually until 2028 when it disappears altogether. This is an annual payment that makes most farms profitable. Secondly, as we all know, our cost of living is rising, largely due to rising energy prices.
This is having a huge impact on farms in Oxfordshire, which are energy hungry in the form of fertiliser, machinery and fuel.
For too long subsidies have been relied upon to make farms look profitable. But farms will now need to make a profit to survive. So, what are farmers doing to generate income while complying with the ever-increasing burden of legislation?
Farmers are now thinking as businesses, looking at income and expenditure, often with the help of external consultants to identify areas of loss or potential gain. For many smaller farmers, in higher age groups, this is particularly challenging.
Diversification works well when planned correctly, with finance readily available for the right, profitable project. Horse livery, farm shops, solar power generation all do well in our area.
Regenerative agriculture (or farming with less inputs and looking after the soil) is also being used to reduce costs.
Countryside Stewardship is the main current environmental improvement scheme from the Government that provides extra finance. From 2024, it will be replaced with three new Environmental Land Management schemes (ELMs): Sustainable Farming Incentive; Local Nature Recovery; and Landscape Recovery. These schemes pay farmers to carry out improvements that benefit wildlife and biodiversity. The current Countryside Stewardship scheme works and is well funded. However, it must be remembered that these schemes should fit the farm business and be managed appropriately.
Biodiversity Net Gain is an effective approach on small parts of large farms. Developers must provide an uplift in biodiversity on any site or pay an equivalent value into a ‘pot’ which is then paid to farmers to carry out works on their land to provide the equivalent uplift. This is new and can work well, but it comes with strings attached in relation to tax, control and management.
Carbon sale is also very new and is charging forward through woodland creation, where farmers sell the carbon absorbed by growing trees. Reduced tillage and hedgerow sequestration will be following soon. However, it is likely that farm businesses will also need to be carbon neutral, so it is essential they don’t sell all their own capacity as buying it in could be disastrous. A carbon unit can only be sold once.
Farmers are under pressure, but are still working hard to improve their land for wildlife, with or without financial support.