Farm Subsidies......expand or GET OUT???

[Derrick Hughes]

What if the farm just employs 2 people, full time.
You can keep borrowing, keep expanding and try to stay ahead.

Or

What if you decrease so that it is full time for one person.
In most cases, scaling back reduces costs more than it decreases turnover, so you are more profitable.
The 2 people can then share the 1 full time role or 1 can work elsewhere.
That isn't subsidising the farm, that is better management of your assets.

I got rid of my farm staff and now use contractors ,but I have no stock, not so easy with stock

 

[FonterraFarmer]

If it puts other farmers out of business, it will be possible to expand.

ie In bad times big farmer loses so much money he needs to sell some land to clear debts.

Part time farmer only loses a small amount, but because the day job pays, he can afford to spend more on renting or buying land than his farming neighbours.

Day job to "carry" the agricultural/horticultural enterprise.....or is that charity???
An agricultural/horticultural business should be able to pay its own way, unsubsidised and with a margin over all opperational , staff and capital expenditure, ie not run like a "government"!!!!

 

[warksfarmer]

If it puts other farmers out of business, it will be possible to expand.

ie In bad times big farmer loses so much money he needs to sell some land to clear debts.

Part time farmer only loses a small amount, but because the day job pays, he can afford to spend more on renting or buying land than his farming neighbours.

That’s got nothing to do with subsidising a farm by diversifying.

 

[Hilly]

I got rid of my farm staff and now use contractors ,but I have no stock, not so easy with stock

Stocks the hardest yet lowest ££ tangled web we have woven …

 

[Cvx1170]

Everyone must have got a lot more BPS than me.
Because it's hardly life changing amounts of money, and hasn't kept up with farm prices and inflation, so just looks like peanuts now

 

[lloyd]

You’re supplementing your income because you’re not making enough on the farm because market prices aren’t high enough. So the diversification is subsiding the lack of farm income.

Anybody needing to diversify to do this should stop farming and let the general public starve and fight for food on the shelves. It’s the only way to make people realise food is more important than sky tv and new smartphones etc.

So are you going to set an example by taking your own advice?

 

[toquark]

Where is the option for people who farm and yet have never recieved any subsidy to begin with?

Hello.

Carry on trucking here subs or no subs. The business was built without subs and works away. Doesn’t make a fortune but doesn’t really need to.

 

[ollie989898]

Hello.

Carry on trucking here subs or no subs. The business was built without subs and works away. Doesn’t make a fortune but doesn’t really need to.

The thing that confuses me the most is that this situation has persisted for years if not decades. Everyone knew subsidisation was on a losing wicket, I've lost count of how many governments have been and gone in the meantime. Why are folk acting as if this news has only just been sprung on people? Had 40+ years of carry on to put businesses into order.

 

[toquark]

The thing that confuses me the most is that this situation has persisted for years if not decades. Everyone knew subsidisation was on a losing wicket, I've lost count of how many governments have been and gone in the meantime. Why are folk acting as if this news has only just been sprung on people? Had 40+ years of carry on to put businesses into order.

They were a product of their time and reflective of the needs of society at the time.

They were never going to last forever, and it is naive in the extreme to build a business plan around them imo.

 

[warksfarmer]

So are you going to set an example by taking your own advice?

If you have to start propping up food production then yes, stop doing it because you’re doing the governments job. I’m not compelled to produce food because that’s what we’ve always done. We need food shortages to make them realise.

 

[lloyd]

If you have to start propping up food production then yes, stop doing it because you’re doing the governments job. I’m not compelled to produce food because that’s what we’ve always done. We need food shortages to make them realise.

I agree so next time i travel through Warwickshire i will
be hoping to see a big tract of land growing nothing.

 

[Iben]

If you have to start propping up food production then yes, stop doing it because you’re doing the governments job. I’m not compelled to produce food because that’s what we’ve always done. We need food shortages to make them realise.

Reading through this thread, I don't think you are being fair to some people.

If farm is running at a loss, and income from a diversification is used to keep farm going, then you are correct.

If farm is small, yet profitable, just not providing the family income that is desirable. Then a diversification to supplement income is absolutely acceptable. Do you not have several diversifications?

Telling sam that his profitable farm should be wound up/rented out because it is not providing the income he desires as it is playing into government ideals is far from correct.

As has been said already, if he has a neighbour in similar situation, so he takes on neighbours ground. He is now earning sufficient income, food prices will still be the same. So don't get your point there.

You have highlighted typical farmer mentality, telling someone they should take land out of production while not doing it themselves.

 

[warksfarmer]

Reading through this thread, I don't think you are being fair to some people.

If farm is running at a loss, and income from a diversification is used to keep farm going, then you are correct.

If farm is small, yet profitable, just not providing the family income that is desirable. Then a diversification to supplement income is absolutely acceptable. Do you not have several diversifications?

Telling sam that his profitable farm should be wound up/rented out because it is not providing the income he desires as it is playing into government ideals is far from correct.

As has been said already, if he has a neighbour in similar situation, so he takes on neighbours ground. He is now earning sufficient income, food prices will still be the same. So don't get your point there.

You have highlighted typical farmer mentality, telling someone they should take land out of production while not doing it themselves.

BPS/SFP/IACS/AREA Payment are all food subsidy’s to keep the cost of food down on the shelves.

Those payments are stopping which is going to leave a hole in farms accounts.

If you fill that hole to remain viable with a diversification then you are then doing the subsidising and you should stop. It’s not your job to subsidise food. It’s the governments.

If you don’t need the subsidy and are still profitable and can maintain your lifestyle BUT want another income stream to increase your own personal income then fine but do it as a separate business keeping it well away from the farm.

If the loss of subsidy means your standard of living drops because you have to pay yourself less and then you diversify to push your income back up then you are subsiding your farm and subsiding food production so stop.

 

[lloyd]

Reading through this thread, I don't think you are being fair to some people.

If farm is running at a loss, and income from a diversification is used to keep farm going, then you are correct.

If farm is small, yet profitable, just not providing the family income that is desirable. Then a diversification to supplement income is absolutely acceptable. Do you not have several diversifications?

Telling sam that his profitable farm should be wound up/rented out because it is not providing the income he desires as it is playing into government ideals is far from correct.

As has been said already, if he has a neighbour in similar situation, so he takes on neighbours ground. He is now earning sufficient income, food prices will still be the same. So don't get your point there.

You have highlighted typical farmer mentality, telling someone they should take land out of production while not doing it themselves.

I remember bumping into a well known farmer 20 years ago on a night
out in Hereford ,he stumbled out of the RR and gave a verbal onslaught of
all the wrongs in farming and what mugs people are for doing it.
Fast forward and he has taken on thousands of acres since outbidding the competition on the way.If your happy with what your doing paddle your own canoe and dont be put off by others.

 

[principal skinner]

What are you going to do then @warksfarmer?
I’m continuing to grow crops at a less profitable rate and pushing diversification as hard as I can in multiple ways. All to ensure the owned farm is left to the next generation (our daughter) along with a profitable business. At the same time our standard of living increases year on year.
I couldn’t give a monkeys toss if I’m subsiding food production so long as our bottom line looks good.

 

[Johnnyboxer]

Rent out, put money in back pocket. Profit.

Straight to Bottom line…..just another way of achieving it

 

[lloyd]

What are you going to do then @warksfarmer?
I’m continuing to grow crops at a less profitable rate and pushing diversification as hard as I can in multiple ways. All to ensure the owned farm is left to the next generation (our daughter) along with a profitable business. At the same time our standard of living increases year on year.
I couldn’t give a monkeys toss if I’m subsiding food production so long as our bottom line looks good.

As we dont know year from year what the true demand ,price will be
i can't see how anyone can be accused of subsidising anything.

 

[4course]

I dont understand folks who criticise diversifications wether on farm or connected to it or for that matter stand alone ventures . To my way of thinking they are just another crop i.e profit centre making use of assets and skills usually making good use of farm outputs or assets and in so doing securing a future both short and long term for followers if they want to take over the mantle or if not building a growing capital base and income

 

[Devil's advocate]

That’s got nothing to do with subsidising a farm by diversifying.

It has really.

A farm can have a better long term future if it has other income streams. Especially when farming is going through a difficult period.

Two farmers on the same sized farms, ne buys a large Fendt & kit to match. The other buys houses to rent, runs smaller kit & tops up with contractors.

10 years down the line, the Fendt is still working & the farm benefits from having a paid for 10 year old tractor. The work that tractor does contibutes to farm profits.

The other farm with the two houses, has a more valuble asset & the rents are rising. If the orgininal money came out of the farm, surely it is ok to now put the rental income back into the farm. In fact it would likely pay the lease of a bigger Fendt.

 

[Jackov Altraids]

It has really.

A farm can have a better long term future if it has other income streams. Especially when farming is going through a difficult period.

Two farmers on the same sized farms, ne buys a large Fendt & kit to match. The other buys houses to rent, runs smaller kit & tops up with contractors.

10 years down the line, the Fendt is still working & the farm benefits from having a paid for 10 year old tractor. The work that tractor does contibutes to farm profits.

The other farm with the two houses, has a more valuble asset & the rents are rising. If the orgininal money came out of the farm, surely it is ok to now put the rental income back into the farm. In fact it would likely pay the lease of a bigger Fendt.

That would depend on the profitability of the enterprises.
Why would you extract money from one, to get a smaller return.
If the houses are rising in value and rents giving a good ROI, it would be more logical to invest in more property.

Having said that, I do understand the optimum option would be to transfer values between the enterprises to benefit from market fluctuations.