Leaping lambs, subsidy scare, Indian farmer victory

Farm incomes were down substantially last year, but even so Defra’s newly released 2020 regional farm income figures make for worrying reading. Several English regions saw their total income from farming fall below the level of area-based financial support provided by the government. Given that this support is being phased out and will have halved within two years, farming businesses will need to plug the gap urgently. The government’s Farming Investment Fund could help some, and farm incomes for most producers should rise in 2021 off the back of improved commodity prices, but as the crisis enveloping the pork sector highlights there is no room for complacency and farmers here are unlikely to force a government U-turn like their colleagues in India.

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Andrew Shirley, Head of Rural Research

In this week’s update:

• Commodity markets – Lambs leap, porkers plummet
• Farm incomes – Defra releases regional figures
• Farm funding – Investment fund scheme launched
• Environmental protection – UK act goes live
• Avian flu – New restrictions for poultry farmers
• The Rural Report – Sign up to watch our ground-breaking video
• Overseas news – Indian farmers force government U-turn

Commodity markets – Lambs leap, porkers plummet

A drop in supply seems to be supporting prime lamb prices, which are on the verge of breaking through the 600p/kg mark again. Pigs though are failing to hang on to the meagre gains made over previous weeks with values sliding 2% last week, according to AHDB data. In a letter to Defra Minister George Eustice, the National Pig Association has warned that prices, which are already below the cost of production, could fall even further if action isn’t taken to reduce the backlog of animals awaiting slaughter that has been created by a lack of abattoir workers due to Covid19 and Brexit. Meanwhile, fears of a new wave of Covid19 across Europe restrictions pulled oil prices back.

Farm incomes – Defra releases regional figures

As the table below shows the newly released first estimates for total income from farming (Tiff) in 2020 across the English regions make for fascinating reading and highlight the potential impact of the phasing out of the Basic Payment Scheme across the country. Overall, Tiff for England was almost £2.6 billion, which adjusted for inflation was a 29% drop on 2019.

Farm funding – Investment fund scheme launched

Farming, forestry and horticultural businesses are now able to apply to the £27 million Farming Investment Fund (FIF) that is intended to help boost productivity and deliver environmental benefits, while smoothing the transition away from the Basic Payment Scheme, which is being phased out as part of the government’s post-Brexit agricultural strategy.

FIF is split into two funds. The Farming Equipment and Technology Fund will provide up to £25,000 for claimants to spend on a list of new equipment and infrastructure, while the Farming Transformation Fund is aimed at larger projects with an initial focus on water management.

The deadlines for applications are 7 January and 12 January, respectively.

For help on transitioning your farming business please contact our Agri-Consultancy team

Environmental protection – UK act goes live

The Environmental Act, which includes long-term targets to improve air quality, biodiversity, water, and waste reduction and resource efficiency, as well as aiming to halt the “decline of nature” was passed into law during the recent COP26 conference. Much of the act will have a profound impact on the agricultural sector.

Avian flu – New restrictions for poultry farmers

Following a number of detections of avian influenza (bird flu) in wild birds across Great Britain, the Chief Veterinary Officers from England, Scotland and Wales have declared an Avian Influenza Prevention Zone (AIPZ) across the whole of Great Britain to mitigate the risk of the disease spreading amongst poultry and captive birds. It is now a legal requirement for all poultry farmers in Great Britain to follow strict biosecurity measures to help protect their flocks.

This year’s edition of The Rural Report, our unique publication for rural landowners and their advisors, launched last month with a video highlighting some of its key content around the topic of ESG. If you missed it, you can sign up to watch on demand at your leisure. It was a lot of fun making it and includes a thought provoking interview on diversity, with Wilfred Emmanuel-Jones AKA The Black Farmer. I think you’ll find it both entertaining and informative.

Sign up to watch The Rural Report launch video

Overseas news – Indian farmers force government U-turn

Indian Prime Minister Narendra Modi has said he will scrap three controversial new laws introduced last year in a bid to modernise the farming sector by liberalising the market for agricultural commodities. Farmers, however, said the reforms could see them being less for their produce and have mounted often violent protests for over a year outside Delhi. Cynics point out that the climb down comes just before elections in some of India’s most agricultural states.

Photo by Chris Wilcock