Farming without subsidies

ollie989898 · Jan 6, 2019

Cowabunga said:
You are quite correct that the least intelligent will struggle on in poverty until every last penny they and their families have earned over generation is flushed down the the drain. If the job is not viable and undermined by a cheap imported food policy, then give up producing food before it bleeds you dry.

Unfortunately that has always been the case, howsoever much we might want to convince ourselves to the contrary. My knowledge of the industry is nothing like as extensive as many people here but I do realise that it is not a business that takes prisoners. You can work very very hard in this industry and it can literally take the shirt off your back if it goes wrong, it is not a game for the uninitiated or unwary much less those who do not have financial foresight, business acumen and technical aptitude. Not only that, but agriculture is unlike many other professions, it will consume peoples working lives whole and with gusto.

brigadoon · Jan 6, 2019

Hilly said:
Thats all very well but the planting spade dose`nt work without subs, whats going to happen to forestry subs ?

They are going to increase since the present level of support has yet to achieve the planting targets set

And sorry that is not a wind up or a Troll attempt - all UK countries are well short of declared planting targets - particularly England

Forestry dreams of having the same level of support as agriculture does

Bury the Trash · Jan 6, 2019

rob1 said:
Plenty of (good)land in the 30's was farmed rent free to keep it in good condition so it is possible that some landowners even these days will realise that its better farmed than not, £20 an acre is far better than nothing

Land developement ie housebuilding is what landowners will be interested in what with a big and blosoming population which is the biggest difference if we are comparing to NZ.

Right-arm fast · Jan 6, 2019

stewart said:
Not quite accurate, efficiency has increased by more than a third, debt has increased by more than a third, regulations are exceptionally high, as an exporter to various countries around the world they have to be.

Friend of mine has family farming in NZ says there are import tariffs and therefore artificially high prices. Is this true?
If you say not then I will go back to him for clarification as he has told me more than once.

Cowabunga · Jan 6, 2019

ollie989898 said:
Unfortunately that has always been the case, howsoever much we might want to convince ourselves to the contrary. My knowledge of the industry is nothing like as extensive as many people here but I do realise that it is not a business that takes prisoners. You can work very very hard in this industry and it can literally take the shirt off your back if it goes wrong, it is not a game for the uninitiated or unwary much less those who do not have financial foresight, business acumen and technical aptitude. Not only that, but agriculture is unlike many other professions, it will consume peoples working lives whole and with gusto.

I would strongly advise any young people not to waste their lives in the livestock sector of agriculture. Do not tie yourselves down to a cow's tail, lumbered with massive mortgages or not, with all the risks and lack of government commitment [eg.-TB and F&M] loaded on your own backs while working for at best a pittance and at worse for the banks in the medium term. Just don't do it. You are not a charity and there is so much more to life than work, stress and debt and worrying about how to pay your bills every month without hitting a bank limit.

ollie989898 · Jan 6, 2019

Bury the Trash said:
Land developement ie housebuilding is what landowners will be interested in what with a big and blosoming population which is the biggest difference if we are comparing to NZ.

How does that influence rents for people who just want to grow corn on it?

Romney_Rob · Jan 6, 2019

Farmer Fin said:
Just reading the FW farmer focus bit this morning. Piece about the Hodgkins says how they farm subsidy free yet his piece is all about waiting for his BPS. Not knocking him as they seem to be trying their hardest to make a go of things and doing things differently, but still reliant on BPS.

Should have made it clearer.

We run two separate enterprises - sheep run unsubsidised - all on 12 month grazing licences

The arable runs all on FBT's

The arable is a new (year 2) operation for us. We run seperate cashflows for each business but all run under one company.

As we integrate the 2 models more each year it is more difficult to truly seperate them completely on paper but the sheep business receives no environmental payments or bps. And "pays" a realistic rent to the arable side.

Hope that clears it up ?

ollie989898 · Jan 6, 2019

Cowabunga said:
I would strongly advise any young people not to waste their lives in the livestock sector of agriculture. Do not tie yourselves down to a cow's tail, lumbered with massive mortgages or not, with all the risks and lack of government commitment [eg.-TB and F&M] loaded on your own backs while working for at best a pittance and at worse for the banks in the medium term. Just don't do it. You are not a charity and there is so much more to life than work, stress and debt and worrying about how to pay your bills every month without hitting a bank limit.

Can the same not be said of arable enterprises; who wants the entry cost of getting into the game coupled with the risks involved, if you are merely entering the world of commodity production?

Farma Parma · Jan 6, 2019

ollie989898 said:
Funny money has been sucked up with reckless abandon by huge fertiliser and chemical manufacturers for decades- without subsidies the push for ever more output would never have happened and they would never have grown so fat off of European agriculture. It is no accident the chemical manufacturers see Europe as the most lucrative market- in other regions of the world talk of even a £50/acre chemical spend on wheat would get you laughed off the place. It doesn't happen in South America, nor Australia nor North America, I can tell you that (save for some specific and very high output regions or speciality crops), the reason being that the risk you would expose yourself to would be off the scale- in Australia, for example, no amount of fungicide spend can offset the fact it doesn't rain at grainfill and that happens believe me.

The truth is that subsidies have distorted livestock and crop production way beyond their natural boundaries and the environment has paid the price. Farmers became victims of their own success because they ended up producing food in such vast quantities the market couldn't find a home for it, culminating in policies such as intervention and the like, a further step down the path of madness.

Will inputs drop in price if subsidies go? I have honestly no idea. All I do know if that if they don't provide an economic return for the farmer when no subsidies exist then they sure as hell should not be used right now.

Job needs a shakeup i'll stand by that.
the fert Bandits are just one of them that take advantage year in year out.
machinery men aint far behind, oh you need to make your mind up on that machine as there twice annual price increase is coming, Yeah we know it made everything double in last 10years
just about. oh wait a min my cereals havnt.... not has its yield in real terms.
thats just the tip of the iceberg of course.

Cowabunga · Jan 6, 2019

Romney_Rob said:
Should have made it clearer.

We run two separate enterprises - sheep run unsubsidised - all on 12 month grazing licences

The arable runs all on FBT's

The arable is a new (year 2) operation for us. We run seperate cashflows for each business but all run under one company.

As we integrate the 2 models more each year it is more difficult to truly seperate them completely on paper but the sheep business receives no environmental payments or bps. And "pays" a realistic rent to the arable side.

Hope that clears it up ?

I wonder what the realistic rent would be if lamb and sheep prices dropped by 75%?

Still Farming · Jan 6, 2019

ollie989898 said:
Absolutely he will, I don't doubt that for one second and did not mean to suggest they wouldn't.

HOWEVER, if tenants are now operating only with the mindset 'can I make a shilling (or save a shilling) out of renting this land?' they will naturally be a lot less keen to pay rents they feel are disproportionate to the value of any profit they can achieve from farming it- with nobody getting funny money as a side order, everyone will be doing their sums carefully, or they will be going out in due course.

A landlord can ask for whatever he likes, but land is only worth in rental what someone is prepared to pay for it and I reckon with subdivides going land that isn't reliable will be the first to be dropped.

Alternatively a horde of extensive mob grazing cattle ranchers might enter the fray and be bidding themselves in a warzone, I have no idea.

Always nutters about grab this ,grab that whatever.
Maybe with no subs coming in they won't be so "blarzay " about it all as they be "playing" with their own money !

Hilly · Jan 6, 2019

brigadoon said:
They are going to increase since the present level of support has yet to achieve the planting targets set

And sorry that is not a wind up or a Troll attempt - all UK countries are well short of declared planting targets - particularly England

Forestry dreams of having the same level of support as agriculture does

Id say they get more already considering the driving force behind their trade is massively subsidised and their proffits are tax free, if only i had no income tax to pay ! ahh Anyway how do you know you will get anything after brexit ?

Farma Parma · Jan 6, 2019

Cowabunga said:
I wonder what the realistic rent would be if lamb and sheep prices dropped by 75%?

Minus £25/acre

Still Farming · Jan 6, 2019

Farma Parma said:
Minus £25/acre

Only rain come's down .

ollie989898 · Jan 6, 2019

Top Tip. said:
In what way does the sub distort the rent ? Surely it is just factored into the equation the same as it would be if there was no sub,take the sub away and the the rent will be just as big a proportion of your costs maybe in some cases a bigger %.This argument that costs will drop if subs are removed is just plain ridiculous,I have even had people suggest to me that the price of fert and machinery will drop well all I will say to that is look at the price of tractors in NZ.

I know how it works in other countries and I presume the same would apply to the UK in the event of the industry entering the same state. People will only pay a rent on land that they feel is appropriate to the level of profit they can obtain from it. In some areas, flat, put to grade and irrigated, the land is worth a lot of money- because it's potential output is high. In other areas, it is virtually one step from growing scrub, there are wet holes scattered about or big hoofing rocks, and you won't get much for it, if you can find someone who wants it.

turbo · Jan 6, 2019

ollie989898 said:
Funny money has been sucked up with reckless abandon by huge fertiliser and chemical manufacturers for decades- without subsidies the push for ever more output would never have happened and they would never have grown so fat off of European agriculture. It is no accident the chemical manufacturers see Europe as the most lucrative market- in other regions of the world talk of even a £50/acre chemical spend on wheat would get you laughed off the place. It doesn't happen in South America, nor Australia nor North America, I can tell you that (save for some specific and very high output regions or speciality crops), the reason being that the risk you would expose yourself to would be off the scale- in Australia, for example, no amount of fungicide spend can offset the fact it doesn't rain at grainfill and that happens believe me.

The truth is that subsidies have distorted livestock and crop production way beyond their natural boundaries and the environment has paid the price. Farmers became victims of their own success because they ended up producing food in such vast quantities the market couldn't find a home for it, culminating in policies such as intervention and the like, a further step down the path of madness.

Will inputs drop in price if subsidies go? I have honestly no idea. All I do know if that if they don't provide an economic return for the farmer when no subsidies exist then they sure as hell should not be used right now.

£50 acre spend is only possible in those countries because they have gm.It's got nothing to do with subs just regulations in each country is very different

Romney_Rob · Jan 6, 2019

Cowabunga said:
I wonder what the realistic rent would be if lamb and sheep prices dropped by 75%?

The "realistic" rent we charge ourselves on the Circa 200 acres of in house grass is made up of the average of the additional 800 acres we rent in from 3rd parties.

Important to note that
A) Hertfordshire is not prime livestock area so limited competition for grassland

B) most of the land we rent would be in environmental schemes we rent we pay is a tiny fraction of the payments and has large restrictions on stocking rates etc

So in summary in my particular case, rent would go down but not by much, BUT it already is probably very low compared to the rest of the country?

ollie989898 · Jan 6, 2019

turbo said:
£50 acre spend is only possible in those countries because they have gm.It's got nothing to do with subs just regulations in each country is very different

No, I was saying that they just do not spend the money. You will not find endless hordes of people spending even £50/acre- the potential of the crop is not high enough to justify it. Weed control might be a go of 2,4D and that is your lot. Other areas are more productive and they will do more, but don't kid yourself every arable farmer in America has a chemical spend identical to yours, they often don't. Would you spend the same money if I told you the crop was never going to break 2 tonne an acre no matter what you did?

Hilly · Jan 6, 2019

brigadoon said:
They are going to increase since the present level of support has yet to achieve the planting targets set

And sorry that is not a wind up or a Troll attempt - all UK countries are well short of declared planting targets - particularly England

Forestry dreams of having the same level of support as agriculture does

Have they anymore commitment from the government than ag ? they do well out of subs at the moment id say they getting more already and tax free profits heavily subsidised customers their own greed will kill it.

Cowabunga · Jan 6, 2019

ollie989898 said:
Can the same not be said of arable enterprises; who wants the entry cost of getting into the game coupled with the risks involved, if you are merely entering the world of commodity production?

Arable and vegetable crops are grown and sold at around world prices plus the subsidy. It is a vastly less complex and perishable market on the whole compared to livestock. The farms tend to be much bigger and on more fertile soils and the scale of production is largely limited by the amount of mechanisation possible. Livestock has far greater labour needs, often 365 days of the year and scale costs vastly more to achieve and is limited by the environmental, planning, labour per animal requirement and so on.
I know arable and believe me it is child's play in comparison. Many vegetable growers have long given up the job in the UK and many others have rented land out to specialist potato and pea and turf growers. 'Arable' in the UK now predominantly means 'grain crops' which are very seasonal and one family per 1000 acres can be achieved.

Even so, UK grain growers are vulnerable to a collapse of the livestock sector. A high proportion of their crops and byproducts of their crops currently go to feed livestock, pigs, poultry and cattle of all sorts. A collapse of those enterprises would leave a whole lot of grain looking for an export home, which would not be straightforward after a hard brexit.

Farming without subsidies

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100% I’ve had enough of farming!

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