The money will not be there – what then?

Writers Posted 04/09/19
The land agent is not the only one who has got the wind up.

The land agent picked up his phone and before I even had the chance to say good morning and introduce myself, he said ‘Ah Stephen, I presume you are phoning me to complain about your loss-making arable enterprise’.

My first thought was ‘Gosh, how on earth did he get access to my arable gross margin calculations when the only version of them is a bit of scribble on a tatty piece of paper behind the clock on the mantelpiece? (When I say rough, I mean rough: three and half tonnes of feed wheat to the acre worth £130 per tonne minus rent, the cost of seed, sprays, fertiliser, and work equals a thumping great loss!)

But then I realised that the agent was joking. He did not have inside information about my own arable profit margins but was merely passing a general comment that, with grain prices at a five-year low, and input costs continuing to rise, arable farming is in deep financial trouble. He said he had just been doing some contract farming budgets for some of his arable farming clients and ‘the figures look universally grim’.

He is not the only one who has got the wind up. I was recently asked to write an introduction for a book entitled ‘Brexit and British Agriculture’ (available for £6.99 online from www.bite-sizedbooks.com). At the book’s London launch I shared a platform with ex-NFU leader Sir Peter Kendall. As most readers will know, Peter is famous for his positive outlook and confidence that British farming has a great future.

Indeed, during the panel discussion, he continually expressed his optimism about the future of farming. But to my surprise he also stated that he was considering giving up his contract arable farming operations because he was ‘fed up with losing money’. Things have surely come to a certain point for grain farmers when this master of the positive soundbite about farming’s future is seriously considering throwing in the towel on his contract arable farming?

As this autumn progresses, I wonder how many other arable farmers beside Sir Peter will be pondering whether it is worth continuing with their grain growing? Such considerations are particularly urgent, given that the BPS is set to be gradually reduced to nothing after 2020.

Given current low arable commodity prices many arable farms in the South East will probably need all (or even more than all) of their BPS receipts to pay their outgoings. From 2021, that money will increasingly not be there to draw on. What then?


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