Farmers set to tighten belt on feed, fert and machinery

Almost a quarter of farms in the UK look set to cut expenditure on fertiliser and feed as a result of the tapering off of the Basic Payment Scheme.

 

In a poll of 1,107 farms in the UK during October 2021 by the National Farm Research Unit, 19% of farmers also expected to make cuts in spending on replacement machinery.

The findings which have been weighted by the NFRU’s Farm Structures Model, also suggested almost two thirds didn’t know what they will do to fine tune business costs as a result of the reduction in support payment.

With the phasing out of BPS many farmers are questioning how they can balance income, either from diversifying revenue streams or reducing costs in their existing farming systems. “We know the strategic importance of food security to a country and that whilst many farmers responding to this survey are not sure what steps they will take, food will still be needed in the UK which will require the agri-supply trade to provide the inputs UK farming will need,” Robert Sheasby, Chief Executive, AIC said. “The policy framework will be essential, something we are lobbying Government on, and AIC members in their advisory roles are already supporting farming businesses as we adapt to the new policy framework.”

The effect on farm input industry is likely to be magnified by a potentially reduced number of farms arising from the option for farmers to leave the industry with a lump-sum payment.

Sector focus
The reduction of BPS combined with soaring fertiliser prices suggested 35% of (almost 19,000) arable farmers will cut back on fertiliser spending. A quarter will trim machinery spending and as many as six thousand are looking to cut back on agronomy services. Nearly 11,500 expected to reduce expenditure on crop protection products.

More than one third of dairy farms indicated a preference for cutting back on bought-in animal feed with nearly a third training their sights on the fertiliser bill. Farmers may aim to replace purchased-in feed with home-grown forages. Meanwhile a quarter said they could reduce machinery expenditure.

Fertiliser, feed and machinery costs were the top targets for around a quarter of sheep and beef farmers, representing around 11,000 and 10,000 farms respectively.

Across all sectors, spending on professional advice on services such as the vet, agronomist or nutritionist looks set to be pared back by between five and eight percent of farms – six thousand to 11,000 businesses.

“The importance of planning, setting long-term on-farm goals, and ensuring the buy-in of all decision makers to a farming business as well as policy makers is central to the success of the agricultural transition over the next decade,” Mr Sheasby added. “The link between all professional advisers in industry and through the public sector is key to joining up ambitions and delivery, ensuring the UK develops a dynamic, sustainable and competitive farming sector.”

 

* The National Farm Research Unit interviews more than 18,000 farmers in UK and Ireland on a rolling basis. All the data is weighted up from our sample to estimates for the whole population using our Farm Structures Model.

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