DEFRA Revises TIFF Estimate

Defra TIFF Estimate.jpg

DEFRA (Department for Environment, Food & Rural Affairs) has now published revised estimates which suggest Total Income From Farming (TIFF) in the UK fell by around 7.5% in 2016. This is significantly different from their original figure of 1.5% reported earlier in the year, with the Government blaming incorrect data accounting for the error in the previous estimate. The TIFF is calculated using income from farm production and subsidies, less costs.

The revised figures confirm the slump in the value of UK farm produce, resulting from falling production and poor prices for dairy and cereal farmers last year. This is perhaps surprising given that there had been some good news with improved productivity in the beef, sheep and pork sectors and the cost of fertilisers and feeds dropping. It seems, however that these factors were not enough to pull back the negative impact of falling revenues overall.

Despite income for farmers having dropped consecutively for the last 4 years, there is optimism that 2017 will see something of a recovery with commodity markets trending upwards at the present time.

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

Water Abstraction License Reforms

Tomato Water

Both Defra and the Welsh Government have announced plans to abolish Water Abstraction Licences and replace them with Water Abstraction Permits in the early 2020’s.The current licencing system was initially set up in the 1960’s and has been described as not flexible or modern enough to cope with the needs of various stakeholders, such as the environment, farming, climate change and the needs of an increasing population.

The reform aims to provide those who need to abstract water with an allocated volume based on the amounts used over the past decade during peak times.

With this comes the proposed abolition of ‘section 57’ which restricts the use of spray irrigation during droughts. Although this will be welcomed by most, it is likely that other regulations will come into force during times of low river flow.

There are many factors concerning the transition between the two systems which include calls for possible tax incentives for farmers who build reservoirs to store surplus water, as well as the new permit system to be introduced at a pace which allows farmers to adjust their irrigation strategy.

Both the security and certainty of water for food production is a key concern along with the regulation of pre-approved trading within water catchments.

There may be some variations between Defra and the Welsh Government’s proposals which should be taken into consideration, once further information has been released.

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

The Growth In Anaerobic Digestion

DEFRA have recently published the third and final annual report into the Anaerobic Digestion (AD) Strategy and Action Plan which was launched in June 2011. They report that:

  • By September 2014 there were 140 AD plants in operation (This is up from the baseline of 68 in 2011). Also more than 200 had received planning permission.
  • The capacity for electricity generated using AD was nearly 4 times the amount in 2014 than it was in 2011. The most recent figures available for the amount of electricity generated using AD shows that nearly 1.5TWh were generated in 2013. The government has a target of 3 to 5TWh by 2020. This should be achievable when you take into account the 200 potential new sites.
  • Food and drink waste provides the biggest proportion of feedstock for the AD. Purpose grown crops (300,000 tonnes) and manures (260,000 tonnes) provide a smaller proportion compared to solid food waste (830,000 tonnes) and liquid (610,000 tonnes).
  • Over a million tonnes of digestate was applied to agricultural land in 2012-13 which is 90% of the total amount produced.
  • Support for farmers to decide if AD is right for them is available through grants for business cases through the £10 million AD Loan Fund. The Fund is currently supporting 41 farm-based projects which have generated 22 feasibility studies, and 5 business plans.

This is a major project for any business and as such needs careful preparation and planning. Here at Green and Co we have the expertise to advise on such projects.

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

Dairy Farmers – DEFRA Appeal to HMRC for Tax

www.greenandco.comAccording to farming minister George Eustice DEFRA have requested that HMRC take a “sympathetic stance” with dairy farmers and consider the individual circumstances of each business in the wake of the dairy crisis. It has been requested that tax payments be deferred for the hardest hit or payment plans be considered so that liabilities can be paid in instalments.

This and other action points were outlined at a recent meeting of dairy industry representatives hosted by DEFRA, where it was also decided that a new industry-led group would be set up to investigate the dairy supply chain and the development potential of a futures market.

DEFRA has asked the Rural Payments Agency to prioritise dairy farmers when administering farm payments and UK banks were also in attendance at the meeting, outlining the ways they can offer support to dairy farmers.

Hopefully we will see these plans executed in the near future.

For further information please contact Green & Co.

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

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Bird Flu – Prepare Your Farm Profile

Avian influenza is once again making the news after it was reported that it had been detected on a duck farm in the north-east of England. The Department for Environment Food & Rural Affairs (DEFRA) have since introduced a 10km restriction zone and culled all poultry on the farm to prevent any potential spread of infection. A detailed investigation is also being carried out.

The Animal and Plant Health Agency (APHA) office should be notified immediately if you suspect that bird flu might be present on your farm. The number of your local APHA can be found online and it is recommended that you store this number should the worse happen.

In the event of an outbreak DEFRA and APHA will dispatch veterinary experts to carry out testing and will implement all other precautionary measures. You will be asked many questions during what will be a time of heightened stress and worry for the family, and therefore APHA have suggested that farmers prepare a Farm Profile which would be used to help all the scientists, policy-makers and veterinary officers who have to make decisions about the outbreak on your farm.

In your Farm Profile, which will need updating periodically, APHA would like you to answer the following questions:

  • The location of your business
  • Number of sites and their location
  • What do you do — e.g. broiler breeder, egg producers, turkey farmer
  • How many birds you have on site
  • Where you get your chicks/pullets
  • When, how and where you move birds
  • Number of employees
  • Layout of the site
  • Any contractor details
  • Disease history
  • Any relevant production issues
  • Vaccinations and other health treatments
  • Cull and deadstock handling arrangements
  • Vet contact details
  • Biosecurity protocols

Although time is precious for the working farmer, this could be a valuable tool to help minimise the anxieties faced should you suffer an outbreak.

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

The Future of Farming – Biodiversity Offsetting

In the next few years you may be able to benefit from a new income source if government plans are achieved. Biodiversity Offsetting is the creation of new habitats to compensate for losses from new developments.

This would mean that Landowners could sell the use of their land to produce these offset areas. These would be long term commitments, but the payments could be attractive given the value locked up in development land.

DEFRA has issued a formal consultation on how this could be incorporated into the Planning System. However this clearly shows that the Environmental Management Enterprise is becoming an increasingly important part of all Farm businesses.

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