Connect with us
Advertisement
Advertisement

Farming

Market volatility hitting family farms

Published

on

REBECCA EVANS AM – Deputy Minister for Farms and Food, visited the Haverfordwest Creamery to better understand the challenges facing the dairy sector and the plans that farmer-owned First Milk have in place for the future.
Haverfordwest Creamery processes the milk from nearly 300 local dairy farmers, who are all co-owners of the factory and located within a radius of 50 miles.
After completing a factory tour, which included speaking with local employees and a local farmer representative, the Deputy Minister said:
“In the last 12 months we have witnessed volatility and low prices in dairy markets around the world, which has had a direct impact on family farms across Wales. We are working closely with the industry, through our Dairy Task Force, to increase the demand and add value for Welsh milk and milk products.
“I believe that well-invested farmer-owned facilities, such as this creamery in Haverfordwest, are vital to the long-term vision of an efficient and sustainable dairy sector in Wales. One which delivers benefits for the wider rural economy.”
First Milk’s site director at the creamery, Paul Rowe commented: “Haverfordwest Creamery creates approximately £70 million of economic activity per year in West Wales. It processes over 260 million litres of local milk and turns it into 28,000 tonnes of award-winning cheeses, with over 100 local people employed in our cheese making and distribution operations.
“Haverfordwest Creamery is one of the most efficient in the UK and a large proportion of the investments we have made, over the last few years, have only been possible with the support of the Welsh government.
“Dairy markets are very tough right now and dealing with this is our immediate priority. However over the longer-term we firmly believe that the Haverfordwest Creamery is well placed to take advantage of the growing global demand for dairy products. We will continue to work closely with the Welsh government in developing these opportunities for the benefit of our local farming members and owners.”
Addressing the annual DairyCo conference at the University of Aberystwyth the following day (Friday, March 6), Rebecca Evans, announced the completion of the Welsh Dairy Review.
In October, the Deputy Minister announced she was commissioning an independent review of the Welsh dairy sector. She asked Andy Richardson, a member of the Dairy Task Force for Wales, to lead the review, which was commissioned in response to difficulties faced by dairy farmers last autumn, as well as an opportunity to review the voluntary code which had been in operation for two years.
She recently received the final report from Mr Richardson, who categorised his recommendations under five key headings: Leadership, Market Focus, Efficiency, Knowledge and Skills and the Environment.
The Deputy Minister said: “One of the things that has particularly concerned me about the recent cut in the price of milk is the impact on confidence and the possible knock-on effect this could have on investment within the sector.
“Andy Richardson’s review suggests that the mood, both amongst farmers and processors, may be more positive than perhaps is being portrayed and that is good news – without continued investment the future will look very bleak.
“As the price paid for milk continues to fall, many farmers and processors in Wales continue to operate under extremely challenging conditions on a daily basis, as the industry faces a very difficult period, one fundamentally driven by an over-supply.
“I am however confident there is a secure and profitable future for dairy in Wales. As I have said many times before, we have the land, the animals, the labour and the infrastructure. Evident from Andy’s review is that we also have the commitment, the passion and the willingness to change and to adapt that will see us through our current difficulties.
“It is so important to me that we continue to support the sector by taking on board the views of those working within it, and help to grasp the opportunities that exist.
“Following discussions with farmers and processors across Wales, Andy has been able to provide a vision of the future for the whole of the dairy sector which sets the direction for a more sustainable industry in the future.
“I would like to thank Andy for his work, undertaken in such a short period of time. I expect to publish the report, alongside the Welsh Government’s formal response, in the form of an action plan once I have given it due consideration.”
The Dairy Review was intended to draw on the work already undertaken by the Dairy Task Force but looked wider, taking views from all parts of the supply chain. It also considered what support the RDP 2014 – 2020 may provide to dairy farmers and the milk processing sector in Wales.
Meanwhile at Carmarthenshire’s recent NFU-Cymru conference, NFU President Meurig Raymond assured union members that the NFU was doing it all it can to assist its milk producing members get through the current price volatility when he spoke at the recent Carmarthenshire NFU Cymru conference.
Mr Raymond explained helping farmers within the milk industry was the Union’s top priority at present. He said he has met with the leading banks to ask them to help farmers at this difficult time. He has met with Government to discuss tax concessions. They’ve given evidence to the Efra Committee asking for more powers to the Groceries Code Adjudicator. The NFU has spoken to milk buyers, particularly First Milk. Mr Raymond also told those present how he has personally had some very difficult meetings with the major retailers and has had some assurances that they will stock more British dairy products in the future.
Mr Raymond said, “We are grateful to shoppers for the positive messages we’ve received as dairy producers and pleased that so many consumers have come out and backed British dairy farmers at this time. We’ve been inundated on social media in particular by shoppers wanting to know where they should buy their dairy products to help us most. In response we have said that shoppers have to check the labels to make sure they are definitely buying British produce – not something that looks British. The Red Tractor mark is a good quick indicator. I would like to take this opportunity to thank the British public for all their support at this time.”

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Farming

A vision for Welsh upland farming

Published

on

NEW NFU Cymru report highlights the unique contribution that the Welsh upland farming community makes to food security, environment, the economy, rural communities and the Welsh language.

The NFU Cymru Vision for Welsh Upland Farming report, which was underpinned by a survey of over 750 farmers, was launched at the Vision for Welsh Upland Farming virtual conference on Tuesday, November 24.
The document reveals that 96% of farmers surveyed believed their role as food producers was very important or fairly important, with 95% saying that food production and sales were very important or fairly important to the viability of their business.

88% said it was very important that future Welsh agricultural policy should underpin food production and ensure consumers have a stable supply of affordable food.
The biggest worry for Welsh upland farmers to surface from the research was farm business profitability, with 85% of those questioned stating this was a ‘significant threat’ to the sector. The vast majority of those questioned (92%) said it was vital that future Welsh farming policy included measures that ensured farmers could make a reasonable living.
However, just 18% of farmers answering the poll felt Welsh Government’s Sustainable Farming Scheme proposals to replace the CAP were very good or fairly good at specifically addressing the needs of upland farming, with 37% labelling the proposals fairly poor or very poor.
With the Brexit transition period coming to an end, 84% of farmers surveyed said that future trade deals were a significant threat to upland farming, while 80% stated that future policy was a significant threat.
NFU Cymru said the findings of this research work provide ‘another compelling argument’ as to why future Welsh agricultural policy should include a stability measure to help ensure the safe supply of food and as an economic foundation in rural communities, alongside the other multiple benefits provided by Welsh farming, amid changing trade and climate conditions.
The new NFU Cymru study also shined a light on Welsh upland farmers’ attitudes towards the environment.
80% of those surveyed had carried out one or more environmental actions on the farm in the last 10 years, while 83% said that future policy measures to tackle climate change were very important or fairly important. 54% of farmers surveyed were in Glastir agri-environment schemes and together had delivered more than 70 different environmental actions on Welsh farms.
The survey data further emphasises farmers’ role as drivers of the rural economy. 30% of farmers surveyed said their business supports or buys from 21 to 50 different businesses, with a further 10% stating that their business trades with or buys from more than 51 other businesses.
The important contribution of Welsh upland farming to rural communities and Welsh culture was also revealed.
83% of respondents were involved in one or more voluntary activities within their community, while over half of those answering the survey identified themselves as fluent Welsh speakers.
Diversification remains an important income stream for many Welsh farms; 43% of farmers responding to the survey stated that they had a non-farming element to their business. The most popular diversification enterprises were renewable energy (43%) and accommodation (42%).
Discussing the importance of NFU Cymru Vision for Welsh Upland Farming project, NFU Cymru LFA Board Chair Kath Whitrow said: “In recent years, despite their extent and significance, we have seen upland farming policy de-emphasised. As our relationship with the EU changes, the economic rationale for upland livestock production is threatened. Global environmental challenges, such as climate change and biodiversity decline, are viewed by some as drivers for land-use change without any consideration of the wider impacts.
“At this pivotal time for Welsh farming as we transition out of the CAP and into a new ‘made in Wales’ agricultural policy, the NFU Cymru LFA Board wants to ensure that the voice of Welsh upland farming is clearly heard in this debate. This is a message that has resonated strongly with Welsh upland farmers and, despite the limitations placed on us as a result of Covid-19, the voice of farmers across Wales has been clearly heard with our survey attracting a fantastic number of responses.”
NFU Cymru President John Davies said: “The Vision for Welsh Upland Farming report launched at today’s conference is one of the most comprehensive pieces of research work undertaken by NFU Cymru. Its findings are of strategic importance not just to the people living and working in the Welsh uplands, but to the whole of Wales.
“This research provides another compelling argument that future Welsh agricultural policy should include a stability measure to support farmers by protecting them against the increased volatility that affects businesses, trade and production. Such backing would ensure our farmers can continue providing safe, affordable food, as well as boosting the economy, enhancing the environment, caring for our cherished landscapes communities and being champions of Welsh language, culture and rural communities.
“I urge our policymakers in Cardiff Bay to carefully consider the report’s key recommendations and work with us to ensure that the people and communities of the Welsh uplands can continue to deliver for the whole of Wales.”
Continue Reading

Farming

Potato production up despite tough year

Published

on

THE TOTAL harvest of British potatoes this year will be 5.3m tonnes according to provisional estimates – up two point eight per cent (2.8%) on last year’s figure but just below the five-year average of 5.4m tonnes.
This estimate by the Agriculture and Horticulture Development Board (AHDB) has been released during a time when growers have battled an exceptionally wet harvest period for the second year running.
They have fared better than last year, as on 10 November it was estimated that two per cent of the planted area was yet to be lifted. This compares with 11 per cent of the crop that was estimated to be unlifted on 12 November 2019.
This production figure follows an AHDB estimate that the planted area this year is the third-lowest on record.
Alice Bailey, Senior Analyst at AHDB said: “This overall net yield sits in line with the five-year national average (2015-2019). Anecdotal reports suggest that yields have been somewhat variable from farm to farm, even field to field. Yet overall, crops are within farm expectations so it is not surprising that the national yield is in line with recent years.
“We saw planted area drop by two-point three per cent this year, yet we are estimating a two-point eight per cent rise in production. This is based on both a slight increase in yields year-on-year and the fact that a large area was left unharvested last year. The unlifted area in 2019 was estimated at six per cent, whereas in 2018 less than one per cent was estimated to be left in the ground and we would anticipate similar this year.”
It was also noted that the estimate could be amended in the coming weeks, with 2.1Kha still to harvest in the East of England, and some members of the 450 strong AHDB Grower Panel still to return their survey information.

WINTER MARKETING CAMPAIGN

Meanwhile, Potatoes Strategy Director Rob Clayton announced that AHDB would be launching another promotional campaign in reaction to the market conditions caused by the coronavirus. This follows on from a similar campaign in the summer that reached 5 million shoppers via catch-up TV, social media and display advertising.
“Since the pandemic hit we have increased the amount of data we analyse from supermarkets and other areas of the marketplace. While potato sales at retail are up eight to nine per cent overall – analysis from Kantar Worldpannel shows baking potatoes lagging behind at a rise of three per cent.
“Jacket potatoes are a fantastic healthy and cost-effective option for families, so we will be launching a winter campaign to inspire shoppers to take advantage of all the great things they can do with bakers,” said Doctor Clayton.

Continue Reading

Farming

Farmers should prepare for IHT changes

Published

on

FARMERS should review their Inheritance Tax (IHT) and succession plans ahead of the Spring Statement as potentially significant changes are expected, according to rural accountant Old Mill.
There are less than six months before the Spring Statement, and changes to the IHT format – based on recommendations originally outlined by the Office of Tax Simplification (OTS) in July 2019 – are likely. “The recommendations were primarily geared towards streamlining IHT administration but may have the secondary effect of reducing some of the favourable reliefs available to farmers,” explains Catherine Vickery, associate director at Old Mill.
“Current IHT legislation can be very beneficial for farmers, giving confidence that they can pass down agricultural business and property assets to the next generation tax free on death,” she adds. “Unfortunately, the coronavirus pandemic has left the Government with a very large debt, so there’s potential that it will implement any OTS recommendations to increase tax revenue.”
So, with the Spring Statement anticipated for March, what can farmers do to mitigate any potential changes?
“Under the existing rules, agricultural land and property qualify for Agricultural Property Relief (APR) from IHT at up to 100%,” explains Mrs Vickery. Other land and property assets, like diversified enterprises, can qualify for up to 100% Business Property Relief (BPR) as part of an overall farming business which is at least 50% trading. “These reliefs can apply on lifetime transfers as well as on death where the conditions are met.”
Transfers on death currently also qualify for Capital Gains Tax (CGT) free uplift so that gains are effectively washed out. Lifetime transfers of agricultural land, property, and businesses which are at least 80% trading qualify for gift holdover relief, meaning gains can be deferred until a later disposal.
However, a key OTS recommendation is to remove the CGT free uplift on death when IHT relief is also available. This would mean that the next generation would inherit the farm at an historically low base cost, leading to higher CGT on any future sale.
The OTS has also just released its report into CGT simplification which echoes this same recommendation.   Proposals to alter the trading test for BPR, aligning it to the 80% CGT trading test could leave farmers ineligible for 100% BPR, which could result in assets having to be sold to pay IHT liabilities.
“The most tax efficient option has often been for farmers to continue to actively farm and hold onto assets until they die,” says Mrs Vickery. “Now, given speculation about potential changes, the best course of action is to get a succession plan in place as soon as possible and start implementing it.
“Plans need to be arranged based on what is right for you, your family and the farm right now, rather than how things might stand at a later date.”
This means establishing who is taking on the assets and if they have the skills needed to drive the business forward. “Pass over this responsibility while you still can and while you can be on hand to guide and support your successor,” advises Mrs Vickery.
It’s also important to review partnership or shareholder agreements, and consider the handing on of other assets. Additionally, farmers should collate any trust and gift deeds, so that paperwork is on hand to be reviewed.
“Though we suspect the new IHT rules won’t be favourable, farmers need to make use of the rules we have now as these are a current certainty,” says Mrs Vickery. “Succession planning is so easy to put off but it’s a vital tool in safeguarding the future of farming businesses.”
Continue Reading

Popular This Week