Tag: Ukraine

Defra has released further information on the Sustainable Farming Incentive (SFI) for 2022. It is now expected to open for applications in June and then remain open with no closing date. This is to allow those interested to apply at a time to suit. However, Defra has stated that, if it is necessary to close applications, it will give six weeks’ notice. The information is included in a ‘collection’ of webpages which can be found at https://www.gov.uk/government/collections/sustainable-farming-incentive-guidance.

Below is a summary of the key points:

• Agreements will be for three years. Initially it will only be open those businesses which are eligible for the BPS – the business (SBI) must have at least 5 Ha of eligible land and 5 or more BPS entitlements on 16th May 2022 – but there is no requirement to have made a claim.
• The applicant must have ‘management’ control of the land for three years e.g. own the land or have a tenancy over it
• Payment will be made quarterly in arrears i.e. the first payment will be made three months after the agreement commences
• The Standards will not include funding for capital items in 2022. But it is possible to apply for existing funding for capital items for parcels included in an agreement, such as Countryside Stewardship capital grants.
• In the future, SFI will include capital items funding to help complete the actions in the standards
• Applications will be online via the Rural Payments Service. Prospective applicants are encouraged to ensure their digital maps are up-to-date, including land cover (certain land covers will be eligible for each standard) and available area. With the application window opening after BPS, in most cases these should already have been checked
• Certain changes can be requested to an agreement. It will be possible to upgrade an agreement annually to:
  • add more Standards as they become available
  • add more land, including land coming out of Countryside Stewardship
  • increase Levels within Standards already in an SFI agreement
  • it will not be possible to reduce the Levels or land area, except under very limited and specific circumstances
  • it will not usually be possible to transfer an SFI agreement to another person
• You do not need to have an SFI Standards agreement to be eligible to apply for the SFI Annual Health and Welfare Review.

Below is a summary of payments. The Moorland Standard payment has been increased, fairly significantly, since the previous announcements. Those with common land entered into an SFI agreement will receive an additional £6.15 per Ha. Payments for the other standards, remain the same:

Sustainable Farming Incentive (SFI) 2022 

Source: Defra (as at March 2022)

 

 

 

 

 

 

 

 

 

 

 

It is hugely difficult to budget in any farming sector with such large and sudden changes in prices and costs.  However, we have produced some updated figures for our Friesian Farm model ahead of the Dairy Tech show on the 7th April.  And with such significant rises in costs we have also revisited our Loam Farm model budget.  The figures are summarised in the tables below.

For Friesian Farm, it can be seen that the 2021/22 year just ending was profitable for the farm as milk prices increased and costs, whilst rising, had not yet hit current levels.  The upcoming 2022/23 year shows the massive increase in the cost of production.  Although the budgeted milk price is also moving up strongly, it results in a margin from production only just above break-even levels and the worst for a few years.

Friesian Farm is a notional 210 cow business.  It has been used to track the fortunes of British dairy farming for well over a decade.  It has a year-round calving system, like most of the UK industry, but it is trying to maximise yield from forage.  The farm comprises 130 hectares (of which 60 hectares are rented on an FBT).  The proprietor provides labour along with one full time worker (plus casual/relief).  The table above shows the farm’s actual results for the two previous milk years (April to March), an estimate for the current 2021/22 year then a forecast for 2022/23.  

The situation is similar for Loam Farm.  The table below shows the results for harvest years 2020 and 2021, a provisional figure for 2022 and a forecast for 2023.  For harvest 2022 fertiliser was purchased the previous summer, i.e. before the recent price hikes and therefore shows spectacular profits for the year.  For harvest 2023, the significant increase in variable costs can clearly be seen, together with fuel costs in the overheads.  Meaning the margin from production is negative.  The fall in BPS is mitigated by involvement in the Sustainable Farming Incentive (SFI).

Loam Farm is a notional 600 hectare business that has been used since 1991 to track the fortunes of British combinable cropping farms.  It is partly owned and partly rented and is based on real-life data. It has 1 full-time worker and a harvest casual labourer.