Farming in Focus InBrief – September 2020

  • Andersons’ consultants are continuing to support their clients during the pandemic. If you require any advice, please contact them, their details can be found at the end of this Briefing.
  • The biggest reform of the Planning system in England since 1947 is being promised by the Government.  It released a Planning White Paper and Consultation, ‘Planning for the Future’, in August looking to free-up constraints on development in order to drive economic growth whilst, at the same time, protecting important areas and delivering ‘sustainable, beautiful, safe and useful development’. The full consultation can be found athttps://www.gov.uk/government/consultations/planning-for-the-futureThe closing date for consultation responses is October 29th.   
  • Agreement between the UK and the EU on a Free Trade Agreement seems as far away as ever.  Speaking after the latest round of talks from 18th to 21st August, the EU’s chief negotiator was notably downbeat.  From the UK side, there were similar sentiments.  David Frost, the UK’s negotiator stated that “agreement is still possible, and it is still our goal, but it is clear that it will not be easy to achieve.”  The sticking points have not changed.  There remains a wide divergence on fisheries, the ‘level-playing field’ provisions and the role of the European Court of Justice.
  • Defra has released a ‘Countryside Stewardship Greening Amendment Form’.  This relates to Mid and Higher Tier applications for agreements which are due to commence 1st January 2021.  Because the Greening requirements have been abolished in England under the BPS for 2021 onwards, the RPA has recognised applicants may now want to use some of their previous EFA land as part of their CS application.  From 2019, there were 19 CS options for Higher Tier and 18 for Mid Tier which fell under the ‘double funding’ rules and it was not possible to overlap these CS options with EFAs on the BPS application.  The form can be found via https://www.gov.uk/government/publications/greening-amendment-form-countryside-stewardship.
  • The Welsh Government has announced there will be a Basic Payment Support Scheme in operation again for 2020 BPS payments.  This will make payments of up to 90% of an individual business’s anticipated 2020 BPS claim value.  Loans will be made to those whose claims have not been fully validated in time to make the BPS payment on 1st December; Support Scheme monies will be made during the second week of December.  The online application process will be open from 1st September and all claimants are advised to apply as there is no way of telling which claims will be ready for payment on 1st December or whether the Support Scheme will be required.
  • The Government has announced the ban on evictions from residential properties will be extended for a further four weeks. It has also said, for England only, the notice period to evict a residential Tenant will be increased to six months.  Both measures have been introduced to give Tenants more protection from eviction due to the effects of Coronavirus, with the longer notice period designed to give them certainty over the winter.  
  • The 3rd Woodland Carbon Guarantee (WCaG) auction will take place online between 26th October and 1st November.  The WCaG provides owners of new woodland projects the option to sell their captured carbon in the form of carbon credits, called Woodland Carbon Units to the Government for a guaranteed price, protected against inflation, every 5 to 10 years for 35 years.  A further £10m, from the scheme’s £50m budget is available.  Applications to the scheme must be made by 11th October.
  • The sugar beet base price for next year has been set at £20.30 per tonne, compared with the current £19.60 per tonne.  Both these prices have no crown-tare deduction. From 2021 there will be a new sugar scale which will see farmers paid directly based on the sugar content of their beet.  The market-related bonuses will be retained.  There will also be a three-year contracting option for 2021 – 2023, at a fixed price of £21.18 per tonne.  A pilot scheme, linked to the sugar futures market, will also be available for 100 growers in the first year who can allocate up to 10% of their contract to this mechanism.  Producers will be able to fix a price based on prevailing values on the sugar market. For the first time in 2021, there will be a virus yellows disease compensation fund.  Contract packs and offers should be received by growers shortly.
  • The deadline for applications to the Dairy Response Fund has been extended until midnight on 11th September.  Further details can be found at https://www.gov.uk/government/publications/dairy-response-fund-2020

This month’s Spotlight looks at harvest progress and autumn plantings. 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/

Consultants’ Contact Details

  • Joe Scarratt – 07956 870263 jscarratt@theandersonscentre.co.uk
  • George Cook – 07836 707360 gcook@theandersonscentre.co.uk
  • Oliver Hall – 07815 881094 ohall@theandersonscentre.co.uk
  • Tony Evans – 07970 731643 tevans@theandersonscentre.co.uk
  • Kerry Jerman (Wales) – 07990 063803 kjerman@theandersonscentre.co.uk
  • David Thomas (Wales) – 07850 224524 dthomas@theandersonscentre.co.uk
  • Edward Calcott – 07827 317672 ecalcott@theandersonscentre.co.uk
  • Jonathan Hughes – 07892 689544 jhughes@theandersonscentre.co.uk
  • Jake Armstrong-Frost – 07931 610398 jarmstrongfrost@theandersonscentre.co.uk

Farming in Focus InBrief – August 2020

  • Andersons’ consultants are continuing to support their clients during the pandemic. If you require any advice, please contact them, their details can be found at the end of this Briefing.
  • Defra has confirmed Greening under the Basic Payment Scheme (BPS) will no longer be a requirement in England from 2021.  This will mean for 2021 BPS applications, Crop Diversification (two and three crop rule) and Ecological Focus Areas (EFAs) will no longer be needed.  There has been no announcement yet from Wales and Scotland, but these administrations will be under pressure to follow suit.  There will be no change to the overall payment as the ‘Greening’ element of the payment will be added to the main BPS payment.
  • Those who made a BPS claim in 2019 of more than €2,000 should receive a reimbursement from RPA via the Financial Discipline Mechanism (FDM).  The rate being used for 2019 is 1.371% (1.346% in 2018).  Payments commenced from 1st July.
  • The Welsh Government has confirmed its intention to press ahead with the Sustainable Farming Scheme as the centre-piece of its post-CAP farm support.  However, the new system will be designed and introduced only slowly over the next few years. There will be a transition period from the current BPS to the new arrangements.   There is no indication of when the transition will start and how long it will take.  Although the Government has already stated that the BPS will continue in its present form for the 2021 claim year.
  • The Glastir Small Grants scheme will open for a further round of applications in Wales between the 27th July and 4th September 2020.  The theme for this round is water.  Grants will be available for capital works to carry out projects which will improve the water quality and reduce the risk of flooding.
  • The Government has agreed to set-up a Trade and Agriculture Commission to protect UK food standards under future trade deals. Whilst seen as a lobbying success for the farming sector, it must be noted that its findings will be advisory only.  Also, the Commission’s six-month remit means it is highly unlikely that any Free Trade Agreement will emerge with the US before the Commission is wound-up.
  • Dairy processor Medina has announced it will be closing its Watson’s Dairy in Hampshire, to try and consolidate its processing operations in a bid to save money.  The fresh liquid processing site had facilities for 200 million litres, although it has not been operating at full capacity.  This will now be diverted to Buckleys (Huddersfield), Severnside (Gloucestershire) and Freshways (London).   There could be a potential loss of 144 jobs, but the closure, according to Medina, should not have an impact on its 156 farmer suppliers.
  • Defra has confirmed bovine TB vaccination trials are to start in England and Wales.  This follows a major breakthrough by Government scientists and could see the vaccine for cattle rolled out in 2025.  The field trials will take place over the next four years on behalf of Defra, the Welsh and the Scottish Governments.  The deployment of a cattle bTB vaccine was one of the key priorities in the Government’s response to an independent review of its 25-year bTB strategy conducted by Professor Charles Godfray, which set out the goal to phase out intensive culling in the next few years.
  • The UK will be able to import an extra 260,000 tonnes of raw sugar without tariff from the start of 2021.  This could have significant impacts on the price of home-grown sugar beet.  This is the only such volume-based tariff reduction yet announced.  It might make sense if the UK does not do a trade deal with the EU – the new cane volume can replace imports of beet sugar from Europe which would then be subject to the UKGT tariff.  However, should a deal be done, then EU imports will continue to be tariff-free, and the additional cane volume offered will simply increase volumes and drive down prices on the UK market.
  • The wet weather in autumn caused a huge swing to spring plantings. According to the AHDB’s 2020 Planting and Variety Survey, GB winter wheat plantings recorded a year-on-year decline of 25% to 1,363K hectares.  The winter barley area has fallen by 34% to 296K hectares. Consequently, spring barley plantings have increased 52% on the year to 1,063K hectares.  The area of oats has declined by 2% in Scotland, but in England as an alternative to winter drilling and a replacement for OSR, has increased by 26%.  The OSR crop in England has decreased by 28% to just 355K hectares, the lowest since 2002.  Dry drilling conditions and then persistent rain, coupled with CSFB, particularly in the East and East Midlands caused significant reductions.  Yield is also expected to be low and production could be the lowest recorded this millennium.

This month’s Spotlight looks at how autumn lettings could affect support payments (BPS) through the Agricultural Transition and who might receive them. 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/

Consultants’ Contact Details

  • Joe Scarratt – 07956 870263 jscarratt@theandersonscentre.co.uk
  • George Cook – 07836 707360 gcook@theandersonscentre.co.uk
  • Oliver Hall – 07815 881094 ohall@theandersonscentre.co.uk
  • Tony Evans – 07970 731643 tevans@theandersonscentre.co.uk
  • Kerry Jerman (Wales) – 07990 063803 kjerman@theandersonscentre.co.uk
  • David Thomas (Wales) – 07850 224524 dthomas@theandersonscentre.co.uk
  • Edward Calcott – 07827 317672 ecalcott@theandersonscentre.co.uk
  • Jonathan Hughes – 07892 689544 jhughes@theandersonscentre.co.uk
  • Jake Armstrong-Frost – 07931 610398 jarmstrongfrost@theandersonscentre.co.uk

Farming in Focus InBrief – July 2020

  • Andersons’ consultants are continuing to support their clients during the pandemic. If you require any advice, please contact them, their details can be found at the end of this Briefing.
  • The Government has announced updates to some of the Covid business support schemes. For the self-employed, there will be a 2nd (and final) round of funding made available in August. The grant will be worth 70% of average monthly trading profits, paid out in a single instalment covering three months’ worth of profits, and capped at £6,570 in total. From the 1st July it will be possible to bring furloughed workers back on a part-time basis, with the Government’s contribution to the Coronavirus Job Retention Scheme being gradually tapered down.
  • Seasonal agricultural workers coming to England will be able to start work immediately.  Unlike other international travelers, those arriving to work on farms will not have to self-isolate for the first 14 days after they arrive as long as other rules are followed. The Government has produced strict guidelines; these can be found at https://www.gov.uk/guidance/coming-to-the-uk-for-seasonal-agricultural-work-on-english-farms
  • Hopefully, all 2020 BPS claims will by now have been submitted.  But if this is not the case it is still possible to make a claim and to make amendments to an already submitted application until midnight on 10th July, but this will attract a 1% penalty for every working day after 15th  June. After the 10th July claims will not be accepted. It is also possible to make changes which do not increase the claim at any time, so long as notification of an inspection or non-compliance has not been received.
  • Defra has re-opened the ELM Policy Discussion Document for responses.  The discussion paper sets out Defra’s initial thinking for the design of the new ELM scheme (to replace BPS) and includes 17 questions. Due to Covid-19 the policy discussion was paused on 8th April. Those wishing to make a response, now have until 31st July.  Originally, the intention was to hold a number of regional workshops, these will now be in the form of interactive webinars, held throughout July.  For further information, go to https://consult.defra.gov.uk/elm/elmpolicyconsultation/
  • Tractor registrations, often the bellwether for UK agriculture, have shown a sharp decline in April and May according to the Agricultural Engineers Association.  Compared to the previous year, registrations for these two months fell by 50.6% & 41.9%.  However, April 2019 was a particularly high point for registrations as there was an increase in purchases before the original Brexit date.  Registrations for the year are down by 26.5%.
  • The Farming Recovery Fund has re-opened for those who were affected by Storm Dennis in February 2020.  Funding of £500 – £25,000 is available to cover non-insurable items and activities such as re-cultivation, re-seeding, reinstating field boundaries and removing debris from farmland.  Eligibility for the scheme has been pre-determined using satellite data showing the extent of the flooding in February.  It covers land in Herefordshire, Gloucestershire, Worcestershire, Shropshire, Staffordshire, Nottinghamshire, North and East Yorkshire.  Applications must be made by 1st September. Further guidance can be found at; https://www.gov.uk/guidance/farming-recovery-fund-extension-2020
  • The sugar beet market bonus has been triggered for the first time.  Concerns over poor yields for the forthcoming crop in the UK and the EU have pushed the average EU and UK white sugar price in April up to €379/t leading to a 0.7p/t monthly bonus on the 2019/20 one-year contract (triggered at €375/t).  This is the highest average monthly value reported by the EU Commission since December 2017.
  • Dairy farmers in England and Wales can apply for Coronavirus hardship funding. There will be a one-off payment of up to £10,000 to cover 70% of income losses during April and May.  Farmers have to show a reduction of 25% or more in their average milk price and are required to provide their Milk Statements covering February, April and May 2020.  Claims need to be made by 14th August. In England payments will be made from 6th July and Wales within 10 days of applying. For further information, please check the following links;
  • This month’s Spot Light gives a Brexit update and looks at the other Trade deals which are currently being negotiated. Click here for more 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/.

Consultants’ Contact Details

  • Joe Scarratt – 07956 870263 jscarratt@theandersonscentre.co.uk
  • George Cook – 07836 707360 gcook@theandersonscentre.co.uk
  • Oliver Hall – 07815 881094 ohall@theandersonscentre.co.uk
  • Tony Evans – 07970 731643 tevans@theandersonscentre.co.uk
  • David Thomas (Wales) – 07850 224524 dthomas@theandersonscentre.co.uk
  • Edward Calcott – 07827 317672 ecalcott@theandersonscentre.co.uk
  • Jonathan Hughes – 07892 689544 jhughes@theandersonscentre.co.uk
  • Jake Armstrong-Frost – 07931 610398 jarmstrongfrost@theandersonscentre.co.uk

Farming in Focus InBrief – June 2020

  • With the unfortunate cancellation of the physical Cereals Event this year due to Covid-19 we are unable to invite you to our stand at the show.  However, we are still keen to share with you our thoughts on the prospects for UK arable farming and present the information we usually have on our boards.  Therefore, we will be conducting a virtual ‘tour of the stand’ on Monday 8th June.  The presentation will be led by Richard King and there will be an opportunity to post questions during the session.  The Briefing will commence at 4.00pm and will run until approximately 4.20pm.  To reserve your place please follow this link –  https://attendee.gotowebinar.com/register/2375741569447559436.  Please note that places are limited.  We hope that you will be able to join us.
  • The Government has added to the schemes available to help businesses cope with the effects of the Coronavirus outbreak.  The new Bounce Back Loan Scheme (BBLS) opened on 4th May.  Unlike the Coronavirus Business Interruption Loan Scheme (CBILS), the Government will guarantee 100% of the loan under BBLS, as opposed to 80%.  This means that the banks providing the loans have a much lower requirement to undertake due-diligence on the application.  Loans of between £2,000 and £50,000 are available.  The Self-Employed Income Support Scheme (SEISS) is now also available which will be of interest to many self-employed farmers, and the Coronarvirus Job Retention Scheme (Furlough) has been extended until the end of October.  However, from August the scheme will alter.  
  • Following intense lobbying, the Government has announced targeted support for dairy farmers affected by the Covid-19 outbreak.  Businesses in England and Wales which have seen their income drop by more than 25% during April and May will be able to claim under the scheme.  The support will be equal to 70% of the lost income for these months, up to a maximum of £10,000.  More details on the scheme, including how to apply, are still awaited.   Please speak to a consultant if you require advice on any of these schemes outlined.
  • The UK has set the tariffs that have to be paid on imports entering the UK after the end of the Brexit Transition Period when it will replace the EU Common External Tariff (CET).  If there is no trade deal in place with the EU by the end of the Transition, then these tariffs will also apply to imports from the EU as from 1st January 2021.  The new tariff regime represents somewhat of a U-turn from earlier Government policy as UK farming will continue to receive protection from cheaper global imports, differing substantially from the big reductions initially proposed in March 2019.  Most of the tariffs under the CET have been maintained at pretty much the same levels, but converted from Euros into Sterling.   Effectively, the protection around the UK market will be kept at the same level as it was around the EU Single Market.
  • The Agriculture Bill passed its remaining stages in the House of Commons in May.  An attempt by some Conservative MPs to get an amendment included in the legislation that would have made imports of food meet UK standards on animal welfare, the environment and food safety, was defeated by 328 votes to 277 and the Bill itself passed by 360 votes to 211.  It now passes to the House of Lords.
  • The Government has confirmed that the domestic Renewable Heat Incentive (RHI) scheme will remain open until 31st March 2022, however the non-domestic element will close on the 31st March 2021.  The Government has issued a consultation (closing date 7th July) on future support for low-carbon heating.
  • This month’s Spot Light feature examines the latest trends in the UK’s Total Income from Farming (TIFF). Click here for more information. 

Consultants’ Contact Details

  • Joe Scarratt – 07956 870263 jscarratt@theandersonscentre.co.uk
  • George Cook – 07836 707360 gcook@theandersonscentre.co.uk
  • Oliver Hall – 07815 881094 ohall@theandersonscentre.co.uk
  • Tony Evans – 07970 731643 tevans@theandersonscentre.co.uk
  • David Thomas (Wales) – 07850 224524 dthomas@theandersonscentre.co.uk
  • Edward Calcott – 07827 317672 ecalcott@theandersonscentre.co.uk
  • Jonathan Hughes – 07892 689544 jhughes@theandersonscentre.co.uk
  • Jake Armstrong-Frost – 07931 610398 jarmstrongfrost@theandersonscentre.co.uk