Weaker Pound Leads to Higher Subsidy Payments

Basic Payment Scheme

Basic Payment Scheme payments for 2017 will be just under 5% higher than in 2016 due to the currency exchange rate.

Under the rules of the Common Agricultural Policy (CAP), support payments for the UK are set in Euros and then converted to Sterling  by using the average exchange rate across the month of September.

It means that the payments made this year will be at their highest exchange rate since 2009, which will surely be a welcome boost for UK farmers.

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.

Back British Farming Day

Back British Farming

The 13th September marks Back British Farming day, with many MPs wearing a corn and horns badge to show their support for British farming.

The special day is a rallying call to encourage MPs to use their positions to support the industry, especially with upcoming Brexit negotiations. The special badge has been sent to all MPs and Michael Gove, Defra Secretary of State, is calling on his colleagues to join him in showing support.

The British farming industry is worth over £100 billion and currently employs 3.8 million people. The period of Brexit negotiations has been seen as a crucial time to back this ever growing industry.

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.

Concerns over the Future of EU Workers

EU Workers, Brexit

A recent survey by the Food and Drinks Federation has shown that many in the “farm to fork” sector of UK industry are worried that their businesses will become unviable if they lose their EU workers in the wake of Brexit.

More than a third of businesses said that they had already lost many of their EU citizen workers since June 2016 with even more considering leaving the UK now that exit talks are under way.  The agricultural industry in particular considers UK workers lack the “will and skill” needed to efficiently carry out some of the jobs currently done by Europeans.

It is estimated there are currently around 2million EU nationals working in the UK, with around 20% working in the food supply chain.  Whilst the Government has promised to look at introducing a “settled status” for workers, many feel concerned for their future and no mention has been made on how temporary staff will fare.

A representative from the Food and Drinks Federation has described food is a matter of “national security” and has called on the Government to provide greater reassurance to both workers and their employers affected.

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.

Second Window for Farm Business Grant Scheme

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Further to our blog in April regarding the Farm Business Grant Scheme, the Welsh Government will be opening the second window for those to apply for the scheme this month. As last time, the window will be open for two months, with a total of £40m funding available over the course of the scheme running, until 2020.

More detailed guidance has been published by the Welsh Government regarding the scheme, and can be found here.

Those looking to apply are reminded to make sure you have attended a ‘Farming Connect: Farming for the Future’ event to ensure you are eligible to make an application, as well as being registered with Farming Connect and Welsh Government Rural Payments Wales.

For more information about the scheme, please visit the Welsh Government Website.

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.

A Farmer’s Life – Through Rose-Coloured Glasses?

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A recent study by The Prince’s Countryside Fund (PCF) has suggested that the public’s view of the life of today’s farmers is a long way from the truth.

Around 25% of those adults who took part in the study said that they found the idea of giving up their day jobs to go and work on a farm an attractive proposition, having what would appear to be an idealised view of living close to nature and making a comfortable living at the same time. When asked to estimate the annual wage of a farmer, the average came out at just over £46,000 pa, with some even guessing at £75,000. A far cry from Defra’s calculated average of around £20,000!

In reality, more than half of farmers today have to supplement their incomes by doing other things alongside the traditional farming role; and with so many dairy farms now closed and fewer and fewer young people coming into the industry, the future of farming in the UK sits under a cloud of uncertainty.

The PCF concludes that more needs to be done to educate the public on the daily challenges of those working in agriculture, and to enable a better understanding of what it means to be a farmer in modern-day Britain. Better links between the industry and the consumer, they suggest, can help to create awareness and promote British farm products.

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.

 

Farming in China Exchange Opportunity

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The EU and China are seeking 10 young farmers to take part in a fully funded exchange programme to share knowledge and farming experience.

Programmes for the trip are still being finalised but the aim is to include farm visits and discussions, visits to research institutes, government meetings and various training workshops.

The main objectives of the programme are to:

  • Facilitate effective sharing and dissemination of experiences and best practices
  • Enhance capacity building in modern farming techniques
  • Reinforce cooperation in green development, environmental protection practices and sustainable agriculture
  • Produce recommendations to practitioners and policy-makers on sustainable farming practices
  • Increase the mutual understanding between young professional farmers and agricultural professionals from both sides, develop close collaboration and ties, and deepen the international cooperation and exchange in agriculture between China and the EU.

To find out more and to apply click here.

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.

Apply Now For Tesco Future Farmer Foundation

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The Tesco Future Farmer Foundation is looking for young people in UK & Irish farming who are keen to develop a successful future in agriculture.

Running from 19 June until 29 September 2017, the programme is available for those aged between 20 and 35 from all farming sectors, and aims to help in four particular areas:

  • Business Skills Workshops with leading experts to help get to the grips with the financial, business and life skills needed to succeed.
  • Supply Chain Events including visits to leading food, farming and retail businesses to help build knowledge of supply chains across a host of different sectors.
  • Business Mentors with the skills and experience to help guide you towards your goals.
  • Training Bursary with funding available for further technical or business training.

The aim of the programme is to inspire and develop the next generation of growers and producers and more information, as well as the application form, can be found HERE.

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.

Ejected Farmers Could Be Entitled To Compensation

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Farmers who HMRC have ejected from the Agricultural Flat-Rate Scheme (AFRS) may be entitled to a repayment or compensation.

An opinion from the advocate general to the European Court of Justice has led to the belief that many who feel they have been unfairly removed from the VAT simplification scheme may be able to make compensation claims or ask to re-join the scheme.

The AFRS is a simplified scheme under which farmers with qualifying agricultural forestry or fishing activities do not have to submit VAT returns. Instead they receive a flat rate compensation of 4% on the value of their sales. It is thought to be used by several hundred UK farmers.

In some years some farmers will gain a net benefit and in other years they may suffer a net loss. HMRC take it upon themselves to withdraw farmers’ AFRS certificates if the compensation they receive from the scheme results in a farmers gaining a greater benefit than he would under a normal VAT registration.

The opinion of the advocate general felt that farmers cannot be excluded for reasons other than specified under the European VAT directive. Instead it could be deemed that the withdrawing of certificates is an indication that HMRC are failing to properly implement and regulate the scheme.

While the European Court does not always agree with the opinions of its advocate generals, if it were to do so in this case, many farmers wrongly removed from the scheme would be entitled to a VAT refund or some other form of compensation.

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.

Rural Payments Agency Risking Wrath of Farmers

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The Rural Payments Agency (RPA) has managed to spark outrage with its latest gaffe.

More than 600 letters have been sent out to farmers who they think were overpaid under the Basic Payment Scheme in 2015 or 2016. The fact that really grates is that some claimants have been waiting more than 18 months for their underpayments to be rectified. In some instances, this is understood to be worth tens of thousands of pounds.

The Basic Payment Scheme is the biggest of the European Union’s rural grants and payments designed specifically to help the farming industry. Claimants apply once a year – usually in May – and payments begin in December.

However since the scheme began in 2015 it has been fraught with problems, with the majority of payments being late from the off.

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.

Farmers and Banks – a Relationship on the Rocks?

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A recent survey undertaken by YouGov reveals that farming businesses feel that they are not getting sufficient support from their banks.

Over 1,000 small and medium farming businesses took part in the survey, with over 30% stating they would like to see more commitment to the agricultural industry from banks.  One of the biggest concerns was a lack of specialist knowledge to fully comprehend the support the sector requires.  Many also called for greater transparency regarding fees and charges.

As Brexit negotiations continue, there is still considerable apprehension in the farming community about the future of aid and its effect on the industry.  This, coupled with the feeling that banks do not fully understand the particular pressures they are currently facing, suggests that farmers are becoming increasingly frustrated in their relationships with the banking industry.

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.