Category: The Andersons Centre

• Andersons’ consultants are continuing to support their clients during the pandemic. If you require any advice, please contact your  usual consultant, or the office on 01664 503200 or email [email protected].
• The Future Farm Resilience Fund opens this month (August) in England and will run until March 2022. It is designed to provide business support to farmers during the early years of the Agricultural Transition.  Nineteen organisations have been awarded funding to deliver a variety of business support, which will be free of charge.  This initial phase will be fed-in to design the final scheme which will run from 2022 to 2024.  Andersons, in partnership with Ricardo are one of the organisations delivering support and will offer one-to-one farm resilience reviews, resilience planning webinars and access to online skills and training.  If you would like some free business support to help plan for the future, more information can be found at https://www.eventbrite.co.uk/o/ricardo-future-farming-resilience-fund-29430290977 or contact one of our consultants to sign up.
• Defra has confirmed the new Farming Investment Fund (FIF) will open for applications in October this year. This is for capital items and is expected to be similar to the previous Countryside Productivity Small Grant scheme, where a 40% grant was available for pre-identified capital items.
• A new Welsh Agriculture Bill is to be laid before the Senedd this autumn.  It will contain the powers to enact the new Sustainable Farming Scheme (SFS).  The Welsh Government has suggested the new support scheme should start in 2024 (although this is not 100% certain).  The Bill is unlikely to give details of how the SFS will work in practice, this is still being worked on.  Instead, it will set the legal framework under which the scheme will operate.
• It was announced by the AHDB at the Cereals Event that the levy board was working in collaboration with Defra to produce an industry-standard carbon calculator for farming.  The aim is to have a tool available for the start of 2023. There is a plethora of different carbon calculators being used in UK farming at present, all with different methodologies and producing different results.  In addition, an industry group has been granted funding to develop a Farm Soil Carbon Code.  This would be similar to the existing Woodland and Peatland Codes, providing a set of formal protocols that would allow farmers to quantify and verify reduced greenhouse gas emissions and/or soil carbon capture as a result of adopting regenerative farming practices.  The lack of a formal standard is one of the issues holding back the development of a market in carbon offsetting in farming.
• Defra and Natural England have announced the potential creation of two new AONBs, plus the extension of two existing ones.  The new ones are a Yorkshire Wolds AONB and a Cheshire Sandstone Ridge AONB.  The extensions are to Surrey Hills and the Chilterns.  Unhelpfully, the statement (see https://www.gov.uk/government/news/natural-england-announces-landmark-new-programme-for-protected-landscapes) gives no details on the precise areas to be covered by the designations.  A consultation is promised later in the year.
• The second part of the National Food Strategy has been released. Whilst the recommendation of a sugar and salt tax made headline news, other recommendations directly affect farming more.  Such as guaranteeing the budget for Agricultural payments until at least 2029 and ring fencing some of the money to put towards schemes which would fund taking out of production 20% of the least productive land to create environmentally friendly landscapes.
• British Sugar has announced the beet price for the 2022 season will be a minimum of £25.   This compares to £21.10 being paid for the current crop (under one-year contract terms).  The idea behind the company releasing an ‘indicative’ price before negotiations are complete seems to be to persuade growers to keep beet in the rotation as they plan their cropping decisions. The NFU is holding out for a higher contract price.  In recent years a contract price has not been announced until September.
• According to the AHDB’s 2021 Planting and Variety Survey, GB winter wheat plantings have recorded a year-on-year rise of 26% to 1,742K hectares.  Every region recorded a rise in plantings. In contrast, the total GB barley area has recorded an 18% year-on-year fall to 1,119K hectares as growers ‘correct’ their rotations from their enforced spring cropping regime last season.  The winter barley area rose 15% to 350K hectares, with spring barley plantings recording a 28% fall on the year to 769K hectares; still quite historically high.  58% of the GB barley area is of a malting variety. The area of oats has risen by 1%, whilst OSR plantings have fallen by a further 15% since last year.  This makes the cropped area the lowest since 1989 (including spring OSR).  Ironically, crops look good this year and those growing it look like being rewarded with a high gross margin so it may encourage a small resurgence of OSR for 2022.
• The UK potato crop escaped the storms which hit mainland Europe, but conditions are ideal for blight. New crop prices have been supported as stocks have been slow to the market.  Easing of Covid-19 restrictions has seen an increase in demand for processing and chipping potatoes.  The warm weather has helped demand for salad, but less so for maincrop packing types.  The loss of data from AHDB means it is difficult to know the area planted in the UK.  World Potato Markets initially assumed a 5% decline, but it may be less.  Any decline would result in one of the smallest crops ever; an average yield would mean a crop of just over 5mt.  Planting in Germany, France, Belgium and the Netherlands is estimated to be down by 4.5% to less than 500,000ha, with up to 20,000ha impacted by storms, although some should be salvageable.

This month’s Spotlight looks at the latest information released on the Sustainable Farming Incentive (SFI).  This is the first component of ELM. This initial phase of SFI will open for applications in 2022 Click Here for further information.

If you would like more detail on the topics covered above as well as additional articles on UK farm business matters, why not subscribe to Andersons’ AgriBrief Bulletin? Over the course of each month, we give a concise and unbiased commentary on the key issues affecting business performance in the UK agri-food industry, and its implications for farming and food businesses. Please click on the link below for a 90-day free trial:

https://agribrief.co.uk/

• Andersons’ consultants are continuing to support their clients during the pandemic. If you require any advice, please contact your  usual consultant, or the office on 01664 503200 or email [email protected].
• The UK and Australia have agreed the outline terms of an historic free-trade agreement – the first all-new deal signed by the UK since it left the EU.  As such, it is seen by many as an important precedent for future trade deals, particularly concerning agriculture.  Whilst the deal has been announced, it is an agreement in principle and subject to further negotiations on the legal text. There is an eventual aspiration to fully liberalise Australian goods entering the UK market.  However, there are lengthy adjustment periods for most agricultural products – up to fifteen years for beef and lamb. But the UK grazing livestock and sugar sectors in particular will be exposed to increased competition from Australia in the long-term.  Additional competitive pressure is likely to emerge when the likes of New Zealand and others strike trade deals with the UK.  Of course, having generous quota access with eventual full liberalisation does not necessarily mean that Australian imports will reach these levels, particularly as there is plenty of demand in Asia-Pacific and the UK is a long way from Australia.  But the access offered to Australia is sizeable and of concern to British farming, particularly as it is the first of several trade deals.
• Further details of the Sustainable Farming Incentive (SFI) pilot scheme are now available. Those who submitted an Expression of Interest in the pilot will be shortly asked to make an application.  The pilot agreements will commence in October 2021 and continue until late 2024.  If you expressed an interest and would like advice on drawing-up an application, please contact one of our consultants.
• The new England Woodland Creation Offer (EWCO) is now open.  The EWCO is available in addition to the Woodland Creation and Maintenance grant provided under the Countryside Stewardship scheme.  It supports the creation of a range of woodland types, but it will have more emphasis on the environmental and public benefits of woodlands. Sizes range from a minimum of 1ha per application with 0.1ha blocks. Capital grants covering the standard costs of buying and planting a tree, up to a maximum cap of £8,500 per ha is available – this compares to a maximum of £6,800 per ha under the Woodland Creation and Maintenance grant via the CS.  Maintenance payments for 10 years and further ‘Additional Contributions’ of between £400 and £2800 per ha are also available.
• Tenants will be able to challenge their Landlords’ refusal to allow them to enter into land management agreements under new regulations which came into effect from the 21st June.  It applies to 1986 Agricultural Holdings Act (AHA) tenancies only.  Tenants can apply to arbitration to vary the terms of the tenancy, or to gain Landlord’s consent, to enter one of the new financial assistance schemes (such as ELM) or to comply with a statutory duty (e.g. erecting a slurry store to be NVZ compliant).  The regulations apply to England with equivalent Welsh ones expected later in the year.
• The first estimates of Total Factor Productivity (TFP) for 2020 (unsurprisingly) show a sharp decline compared with 2019.  TFP measures how well inputs are converted into outputs and thus gives an indication of the efficiency and competitiveness of the farming industry.  After a significant increase in 2019 (+4%), TFP has fallen back further by 6.7% in 2020.  The decrease was mainly due to a -6.3% decline in the overall levels of production but there was also a small 0.5% increase in the volume of inputs. The main driver was the drop in crop output of -12.4%.  Cereals decreased by -26% due to the challenging weather.  OSR and sugar beet experienced declines of -41% and -23% respectively. The overall livestock output declined by -0.6%.
• Reports from the Royal Institution of Chartered Surveyors (RICS) and the Royal Agricultural University (RAU) show the Weighted Average farmland price for the full year 2020 was £10,390 per acre (£25,674 per Ha).  This is a hefty 20% rise over the two surveys combined for 2019, where the price was £8,602 per acre (£21,257 per Ha).  The Weighted Average Value excludes those sales which have been identified as having a residential value of more than 50% and a regional adjustment is also made.
• Bovine TB cattle vaccination trials commenced in June in England and Wales with the aim of rolling out cattle bTB vaccinations by 2025.  This would be a ‘game changer’ and cannot come soon enough, particularly for those that live with the drudgery of constantly testing. The Government has also said it will end issuing new licenses for intensive badger culls as from 2022.  Many farmers will be disappointed to hear this, especially as even under the Government’s own admission it has led to a ‘significant reduction’ in the disease. 

This month’s Spotlight looks at the forecasts for Andersons’ Meadow Farm model. Click Here for further information.

If you would like more detail on the topics covered above as well as additional articles on UK farm business matters, why not subscribe to Andersons’ AgriBrief Bulletin? Over the course of each month, we give a concise and unbiased commentary on the key issues affecting business performance in the UK agri-food industry, and its implications for farming and food businesses. Please click on the link below for a 90-day free trial:

https://agribrief.co.uk/

• Andersons’ consultants are continuing to support their clients during the pandemic. If you require any advice, please contact your  usual consultant, or the office on 01664 503200 or email [email protected].
• UK farm profits fell by 20% in real terms between 2019 and 2020 based on latest Defra Total Income from Farming (TIFF) data. TIFF measures aggregate profitability of all UK farming businesses for the calendar year. The main reason for this decline was a 15% fall in the value of crop output. Income from diversification declined by almost 25%. Livestock sector output was broadly flat whilst costs declined in real terms. Looking to 2021, there are good prospects for a recovery with crops looking in good condition and prices, for crops and livestock, looking generally good (with 1-2 exceptions).
• The Queen’s Speech which sets out the Government’s legislative agenda for the forthcoming Parliamentary session included a number of bills of relevance to the farming and rural sector. The most notable is the Environment Bill which is planned to be passed before the end of the year. Three Animal Welfare Bills are also planned which will include provisions to ban live animal exports for slaughter or fattening. A Planning Bill is set to include provisions for the ‘zoning’ of sites for development and plans to increase the numbers of homes built.
• The farming industry has come together to call on the Government to protect the agricultural sector under any Free-Trade Agreement (FTA) with Australia. The farming sector is asking that some tariff and tariff rate quota restrictions remain whilst UK standards (environment, labour, food safety and animal welfare) are maintained. Some within Government are pushing for tariff-free and quota-free trade. Whilst imports from Australia are currently small in many cases, the deal sets an important precedent for future trade deals with the likes of the US and Brazil.
• Plans for nature restoration and woodland creation have been unveiled as part of the Government’s plans to tackle climate change, address biodiversity challenges and help to deliver its net-zero commitment. The England Wood Creation Offer (EWCO) is due to open for applications shortly and replaces the Woodland Carbon Fund. It will be administered by the Forestry Commission and support will be available for diverse woodland types, from a minimum of 1 Ha per application. Payment rates are not yet published. From 2024, EWCO will transition into ELM and EWCO agreement holders will be able to transfer across to ELM at agreed points without penalty. 
• The UK organic farming land area grew marginally in 2020. Latest Defra estimates put the organic land area at 489,000 Ha, up 0.8% on 2019. This accounts for 2.8% of the UK farmed area on agricultural holdings. It is mostly permanent pasture (62%) and temporary grassland (20%) with cereals accounting for 9% of area. Grazing livestock numbers on organic farms are down with sheep 13% lower and cattle numbers down by 9%. Pig numbers were down marginally (-0.6%) whilst poultry numbers rose by 2%. 
• AHDB restructuring, due to the votes by the horticultural and potato sectors to end their levies, means that it is seeking to make around 140 staff redundant (30% of workforce). The majority will be in the two sectors concerned but it is also looking to make wider efficiency savings.
• Wheat prices have fallen by £20/t since their highs of early May and currently stand at around £172/t. This is driven by improved weather conditions globally and projected records for cereals yields in the US. Feed barley has also slipped in line with the wheat price. Malting barley premiums are mixed. Growing and ripening conditions are ideal for barley across Europe. 
• Chinese imports of maize look set to continue at high levels for 2021/22 marketing year. Historically, it has imported 5-6 million tonnes annually. In 2020-21, it imported 25 million tonnes. Some analysts believe it has already booked a similar amount for the year ahead. This could tighten global supply in 2021/22 and push the whole grain price matrix higher. 
• UK farmgate milk prices remain good with further rises reported in May. Arla has announced a further 0.44ppl rise for member suppliers from 1st June. Several other suppliers have also increased their prices including: Muller (+1ppl for non-aligned suppliers); First Milk (+0.5ppl); Meadow Foods (+1.25ppl); Yew Tree Dairy (+2ppl); Freshways (+2.5ppl from July) and; Medina Dairy (+2.7ppl from 1st July). 
• Finished beef and lamb prices have cooled somewhat in recent weeks. In early May, the deadweight beef price passed the 400 p/kg price for the first time.  For week ending 29th May, the GB all prime average price stood at 394 p/kg, returning to early April levels. These prices are still strong however. Whilst the orders from the catering sector have risen there is some evidence that retail orders have dropped slightly. Deadweight pig prices have continued to increase, with EU-spec SPP currently at nearly 152.8 p/kg.

This month’s Spotlight looks at Defra’s consultation on Lump Sum and Delinking of BPS in England. Click Here for further information.

If you would like more detail on the topics covered above as well as additional articles on UK farm business matters, why not subscribe to Andersons’ AgriBrief Bulletin? Over the course of each month, we give a concise and unbiased commentary on the key issues affecting business performance in the UK agri-food industry, and its implications for farming and food businesses. Please click on the link below for a 90-day free trial:

https://agribrief.co.uk/

• Andersons’ consultants are continuing to support their clients during the pandemic. If you require any advice, please contact your  usual consultant, or the office on 01664 503200 or email [email protected].
• The UK Government has set challenging new targets for the reduction of greenhouse gases (GHG). This is likely to have implications for agriculture as one of the economic sectors that is seen both as part of the problem, and the solution, when it comes to battling climate change.  The UK had a previous commitment to reduce emissions by 68% compared to 1990 figures by 2030.  The target has now been extended to a 78% cut by 2035.  The eventual aim is for the UK to be ‘net zero’ by 2050. 
• New Regulations to protect water from pollution came into force in Wales from 1st April 2021.  The rules, put the whole of Wales into a Nitrate Vulnerable Zone (NVZ).  The Water Resources (Control of Agricultural Pollution) (Wales) Regulations 2021, apply to all land, but transitional periods have been provided for certain requirements where land was previously not within an NVZ. Full guidance can be found via  https://gov.wales/sites/default/files/publications/2021-03/water-resources-control-of-agricultural-pollution-wales-regulations-2021-guidance-for-farmers-and-landmanagers.pdf
• The RPA has announced expiring Countryside Stewardship (CS) agreement holders may be offered a new five-year Agreement, instead of one-year extensions.  So called ‘Mirror Agreements’ will be available for Mid and Higher Tier agreements which are due to expire on 31st December 2021.  The new Mirror agreements will be offered under domestic CS regulations and subject to the 2022 manual.  One-year CS extensions will no longer be offered.
• The RPA has given some updated information on Countryside Stewardship (CS) inspections, especially for agreements which commenced from 1st January 2021.  CS (and Environmental Stewardship) agreements which started prior to this date must still meet EU rules for inspections.  But for CS agreements starting on or after 1st January 2021 UK domestic rules apply and the RPA has changed ‘Inspection’ to ‘Environmental Outcome Site Visit’. In 2021 there will be two approaches to the ‘Environmental Outcome Site Visit’;
  • Whole Agreement – will look at all the options in the agreement
  • Campaign – this will just look at certain options which have been chosen for the year. For 2021, these are;
    • Buffer Strips – SW1 and SW4
    • Grassland Options – GS1, GS2, GS7 & GS17
    • Boundary Options – BE3
• Defra has announced Organic Higher Level Stewardship (OHLS) agreements will now be eligible for one year extensions.  Originally it had said extensions would not be available for Organic ELS/HLS agreement holders. 
• The much-delayed consultation on the delinking of the BPS and lump-sum payments has been postponed again.  It has now been put back due to the ‘purdah’ period ahead of the Local Elections.  It will not appear before the 7th May.
  
• The International Grains Council (IGC) has released its first full supply and demand projection for the 2021/22 year.  This shows 63mt more grain production than last year at 2,287mt (a 2.8% increase).  But with consumption increasing by 54mt this only stops the decline in stock levels. The level of grain stocks entering the new marketing year is the lowest for four years – this is what is fueling the global price rises.  The figures are marginal at this stage of the year, the current concerns over the dry weather, or the arrival of rain in the key grain growing areas of the world could have major swings in the availability of grains for the coming year, and prices.
• British Sugar believes total sugar production is likely to be just over 1mt in 2021; 10% higher than in 2020.  The reason is a reversion to more normal yields after virus yellows disease caused a drop of 25% in crop output last year.  The cold weather in February reduced aphid numbers which spread the disease. Crop plantings this spring are down 10% on the 2020 area of 103,000 Ha, but higher yields are expected to more than compensate for this.
• Commodity and farmgate milk prices remain good. The average Global Dairy Trade (GDT) index stood at $4,110 at the event held at the end of April. Closer to home, a further 1.4ppl increase in May for Arla member suppliers sees the co-operative leading the way on milk price.  However, the cold, dry weather is continuing to curtail grass growth and production.
• Finished beef and lamb prices continue to exceed expectations. The deadweight beef price has passed the £4/kg price for the first time.  And, after declining monthly since the middle of 2020, pig prices have started to increase.

This month’s Spotlight looks at Farm Business Income,  for England for the past year. Click Here for further information.

If you would like more detail on the topics covered above, why not subscribe to Andersons’ AgriBrief Bulletin? Over the course of each month, we give a concise and unbiased commentary on the key issues affecting business performance in the UK agri-food industry, and its implications for farming and food businesses. Please click on the link below for a 90-day free trial:

https://agribrief.co.uk/

• Andersons’ consultants are continuing to support their clients during the pandemic. If you require any advice, please contact your  usual consultant, or the office on 01664 503200 or email [email protected].
• The application window for Basic Payment Scheme claims has now opened in all parts of Great Britain. The deadline for submission without incurring a penalty is 17th May this year, as 15th May falls on a Saturday.  The biggest change in the scheme is the removal of most of the Greening requirements (Ecological Focus Areas are still required in Scotland).  This should make the process of claiming somewhat easier.  The entitlement usage rule, which used to mean, at least once in every two years all entitlements needed to be used in a single claim, has also been abolished.  Meaning unused entitlements will not be removed from claimants. In England, the annual revenue claims under Countryside Stewardship and Environmental Stewardship are also open.   Again, the deadline is the 17^th  If you need advice on completing your 2021 BPS application or an Agri-environment revenue claim, please contact your usual consultant or 01664 503200 or email [email protected].
• Morrisons has pledged to be the first supermarket to be supplied by net-zero farms.  The supermarket has said it will work with its 3,000 suppliers to help them become zero carbon emitters by 2030.  Waitrose has also committed to be supplied by net zero farms by 2035.  Morrisons expects eggs will be the first products to reach this status and this could be as early as 2022.  Lamb, fruit, vegetables, pork and beef will then follow. The retailer’s Livestock and Produce Teams will initially work with a small number of their suppliers to create net zero carbon farm ‘models’.  Once these ‘blue prints’ have been established they will be rolled out across all of the retailer’s suppliers to enable all food to be produced in a climate friendly way.
• The Farm Business Grant opened in Wales on 1st March.  This is the 8th Expression of Interest EoI) for the scheme which pays up to 40% towards the cost of specific capital items which have been pre-identified to improve the economic and environmental performance of the business.  Applications are made via RPW Online.  The deadline for EoI is 9th April 2021.  Further information is available via: https://gov.wales/farm-business-grant-rules-booklets
• The Swedish company Oatly, that produces alternatives to dairy products from oats, plans to open its first UK factory in 2023.  The facilities which will be based in Peterborough, Cambridgeshire will initially produce 300 million litres of oat drinks per year, increasing to a capacity of 450 million litres.  According to the company it will use oats from across the UK which will be a boost for the domestic crop, which has seen a resurgence in recent years.
• Cereals 2021 will now be held on June 30th – July 1st this year.  Under the Government’s lockdown exit strategy, restrictions are due to end on 21st June, organisers have therefore decided to move the event from the original June 9th -10th in order to accommodate the maximum number of visitors and exhibitors.  The event will continue to be held at Boothby Graffoe, Lincolnshire with the format remaining the same as in previous years.
• The Budget, on the 3rd March continued support for the economy to cope with the effects of the Covid-19 pandemic whilst making the first, tentative, steps towards rebuilding the public finances. The economic outlook is set to improve later this year as lockdown measures are gradually unwound.  The UK economy is forecast to have shrunk by 9.9% in 2020 – the largest contraction for 300 years.  The latest forecast from the Office of Budget Responsibility (OBR) indicates that the economy will rebound with 4% growth in 2021 followed by an increase of 7.5% the year after.
• The effect of Brexit can be seen in sharply reduced trade volumes with the EU. The Office for National Statistics (ONS) recently published UK trade data for January 2021.  Unsurprisingly this has revealed significant drops in food and live animals trade with the EU; there has been a 64% drop in exports to the EU, whilst imports from the EU have fallen by 24%.  More time is needed before definitive conclusions can be drawn, however.  The situation has improved since January and traders who are well-organised are getting through the EU border controls.  It will be mid-year before a definitive picture will emerge as agri-food trade is often lower during January to March.  Trade should recover somewhat but probably not to the same levels as before.  The significant decline in EU imports also presents opportunities for domestic suppliers to capture a greater proportion of the UK market, particularly in perishable agri-food products.  This will mean that there will be winners as well as losers as a result of Brexit.

This month’s Spotlight looks at the Sustainable Farming Incentive (SFI) pilot scheme, it gives details of the different ‘Standards’ and payment levels released by Defra; a first look at this component of ELM. Click Here for further information.

If you would like more detail on the topics covered above, why not subscribe to Andersons’ AgriBrief Bulletin? Over the course of each month, we give a concise and unbiased commentary on the key issues affecting business performance in the UK agri-food industry, and its implications for farming and food businesses. Please click on the link below for a 90-day free trial:

https://agribrief.co.uk/

• Andersons’ consultants are continuing to support their clients during the pandemic. If you require any advice, please contact your  usual consultant, or the office on 01664 503200 or email [email protected].
• The Environment Bill has passed the Committee stage in the House of Commons.  It now moves on to the House of Lords.  However, due to a lack of Parliamentary time, the passage of the Bill will be delayed until the start of the next session in May. It is now expected to become law in the autumn.
• All parts of Great Britain have published their cross-compliance guidance for 2021. In all countries the requirements are pretty-much identical to those for 2020.  The main change is how the rules and inspections are enforced – with Brexit there is now more flexibility on how the inspection regime operates.  The English guidance can be found at – https://www.gov.uk/guidance/cross-compliance-2021; the Welsh version at – https://gov.wales/cross-compliance-2021.  Defra has also published a useful list of what is required at a cross-compliance inspection this can be found at Cross compliance inspections: information needed for an inspection – GOV.UK (www.gov.uk)
• The Seasonal Agricultural Workers Scheme (SAWS) will be extended to 30,000 places for 2021. The Government has announced the Pilot scheme, which ran with 2,500 places in 2019, and 10,000 in 2020 will be extended, and expanded, for the coming year, but the numbers still fall short of the estimated 80,000 seasonal workers required.
• Defra has launched a consultation on the rules surrounding Gene Editing (GE) which could see approvals made easier. It is Defra’s view that organisms produced by GE or by other genetic technologies should not be regulated as GMOs (as is the case now under retained EU legislation) if they could have been produced by traditional breeding methods.  Brexit allows the UK to change this legislation.  The consultation can be found via https://consult.defra.gov.uk/agri-food-chain-directorate/the-regulation-of-genetic-technologies/. Responses by Wednesday 17th March 2021.
• Defra has authorised the emergency use of neonicotinoids on sugar beet seed in 2021.  The authorisation is for the use of Syngenta’s Cruiser SB seed treatment in England only, once a threshold for virus levels has been reached.  The emergency authorisation has strict conditions attached including:
  • the application rate will be below the normal commercial rate
  • no flowering crop is to be planted within 22 months of the sugar beet crop, with no oilseed rape crop to be planted within 32 months  of the sugar beet crop
  • an industry-recommended herbicide programme must be followed to limit flowering weeds in and around the sugar beet crop.
• The UK sugar industry faces increased competition after it was confirmed the Government’s proposed Autonomous Tariff Quota allowing imports of 260,000 tonnes of raw sugar per year without having to pay the UK’s import tariff of £280 per tonne will be enacted.  This is likely to increase price pressure in the UK market as low-cost cane sugar competes with UK beet.  The Government argues that this volume will merely replace sugar imports from the EU.  With the Brexit deal, however, then EU sugar can continue to come into the UK tariff-free too.
• With the UK-EU Trade and Cooperation Agreement (TCA) (Brexit trade deal) in place, attention is shifting towards Free Trade Agreements (FTAs) with non-EU countries. The TCA was largely about protecting what was already in place – i.e. the significant trade between the UK and the EU. Therefore, the agreement largely preserves the status quo and has had little effect (so far) on markets.  Attention is now turning to the new deals the UK might sign with other countries.  This would see a change in the trading environment – and an effect on prices.  From an agricultural perspective, the most notable of these are the US, Australia and New Zealand. The negotiations which are most likely to conclude in 2021 are those with Australia and New Zealand.  Both countries are major exporters of beef and lamb, dairy products and wine.  Admittedly, imports of beef and lamb from both countries into the UK and EU have been below historic levels recently (supporting current strong prices).  This is mainly a function of a greater emphasis being placed on the Asia-Pacific region, particularly China which is struggling with African Swine Fever.  However, if the UK agrees an FTA with these countries it will lower trade barriers significantly and make the UK a more attractive destination.  Longer-term, it is inevitable that the UK will seek FTAs with other countries.  Chief amongst these would be Mercosur, which includes Brazil and Argentina – two farming powerhouses.
• Vydate has not been re-authorised for use in the UK as from 31st December 2020.  The pesticide, can no longer be used, sold or distributed in the UK.  The decision was made just one week before authorisation ended and only gives until February 28th 2021 to dispose of any product.
• Defra has announced the Countryside Productivity Small Grants Scheme Round 3 claim deadline has been extended by two months.  Applicants now have until midnight on the 31st May 2021 to buy and install all their items, and submit their claim for payment.
• Country Stewardship (CS) applications are expected to open shortly. Whilst ELM is being piloted the CS scheme will remain open to new applications and those that go into CS will not be penalised if ELM is ‘better’. The RPA has stated ‘no-one in a CS agreement will be unfairly disadvantaged’ as the transition to ELM takes place.  Those who enter a CS agreement from 2021 onwards will be able to end their agreement, at agreed points, where they have secured a place in ELM.  A new objective for CS from 2021 will be air quality, with the aim to reduce ammonia emissions from agriculture.  Under a new Capital Grants offer, existing options that improve air quality such as slurry store covers or planting tree shelter belts are expected to be available as a stand-alone capital agreement, in priority areas, together with two new capital items – automatic floor scrapers and low emission flooring for livestock housing.  Further details are expected in the new CS 2021 manual, which is expected shortly and we hope to be able to feature this in next month’s Farming in Focus Spotlight.  With BPS payments starting their phase out this year, many are taking another look at CS.  Our consultants are experienced in drawing up applications which ‘work’ for their clients.  If you would like to discuss a CS application, please find the ways to contact us at the beginning of this briefing note.

This month’s Spotlight looks at the recently released Farm Business Income figures.  These are broken down by farming sector and for each one, into 4 profit areas, showing just how reliant the land based sectors are on the BPS money. Click Here for further information.

If you would like more detail on the topics covered above, why not subscribe to Andersons’ AgriBrief Bulletin? Over the course of each month, we give a concise and unbiased commentary on the key issues affecting business performance in the UK agri-food industry, and its implications for farming and food businesses. Please click on the link below for a 90-day free trial:

https://agribrief.co.uk/