Policy Update - August 2022

1.      Defra has opened for applications a £12.5 million competition for research and innovation into the development of products such as methane reducing animal feeds and high protein crops.

 

2.      The Rural Payments Agency has begun issuing Basic Payments Scheme advance payments.

 

3.      The Welsh Government has announced the Sustainable Farming Scheme.

 

4.      The Environment Agency has published Working with Nature in which it reports England as one of the most nature depleted countries in the world and cites one of the major reasons for this being agriculture.

 

5.      Agriculture in the United Kingdom 2021 has just been published. The Utilised Agricultural Area covers 71% of land in the UK. Average Farm Business Income (FBI) was up 19.2% at £46,500 with 28% having an FBI of over £50,000 whilst 16% achieved negative results. Total Income from Farming rose by 14% to £ 5,998 million and agriculture's contribution to the UK economy rose by 8.9% to £11,222 million representing 0.5% of Gross Domestic Product. Total livestock output was up 6.8% to £16,285 million with increases of £344 million for dairy and £310 million for beef but a fall of £38 million for pig meat. Input costs rose by 12 % to £18,854 million largely feed and fertiliser and Total Factor Productivity increased by 2.9%..The value of milk and milk products rose by 7.8% to £4.8 billion. The area of land farmed organically increased by 3.6% to 507,000 hectares.

 

6.      The Scottish Government has begun consultation on a new Land Reform Bill which will be introduced by the end of 2023.This bill introduces a public interest test for transfers of large-scale holdings and requires owners of said holdings to give prior notice to community bodies of their intention to sell. Landowners seeking subsidies will be required to have the land registered in the Land Register of Scotland in order to improve transparency of ownership.

 

7.      Draft legislation has been included in the Finance Bill which, if passed into law, will result in payments under the Lump Sum Exit Scheme being treated as Capital Gains Tax for individuals, for companies to Corporation Tax on chargeable gains.

 

8.      Nat West has announced it has allocated £1.25 billion of funding to be made available to farmers.

 

9.      The UK average All Milk price for May was 40.39 pence per litre, an increase of 1.93,far exceeding the rolling 5-year average of 30.28 pence per litre. The EU average for May was 1.26 pence per litre above the UK at 41.65, 2.06 up from the EU average price in April.

 

10.   Arla increased its milk price by 0.9 pence per litre taking a standard manufacturing litre to 50.53 pence per litre and an organic litre to 56.01 pence per litre.

 

11.   A survey of 541 Arla farmers has revealed that 80% of those looking for staff received a zero or very few applications from people with appropriate experience or qualifications while 61% were finding it more difficult to recruit than in 2019.As a result 4.3% had decided to reduce milk output while 6 % intended to reduce herd size.

 

12.   The British Survey of Fertiliser Practice for 2021 has just been published. Shows very few changes to previous years.

 

13.   The Government is to reconsider whether the Groceries Code Adjudicator should be amended or replaced.

 

14.   The April Farming Opinion Tracker recording farmers' opinions of Defra shows that 66% understand Defra's vision for farming, up from 61% in Oct 2021.68% of farmers realise that they will need to make changes to their holdings in the next 3/5 years up from 64%.80% of famers felt that environmental payments will be important to their businesses in the future. However, 65% of farmers are not confident that changes to schemes and regulations will be successful but 47% of those farmers interviewed continue to have a positive outlook.