New limits to SFI.

[livestock 1]

more to farming than wheat

One year means nothing in agriculture. You have to average it over 4 years at least

 

[Henarar]

I don't often disagree with you, but I am absolutely convinced that the reduction in BPS has, is and will increase food prices.

If it means that less food is produced then yes it will make a difference.
price is driven by supply and demand

 

[Henarar]

One year means nothing in agriculture. You have to average it over 4 years at least

interesting start point for the graph as well, perhaps go back a bit more

 

[livestock 1]

interesting start point for the graph as well, perhaps go back a bit more

Yes a bit biased

 

[Hindsight]

I don't often disagree with you, but I am absolutely convinced that the reduction in BPS has, is and will increase food prices.

I don't think you can over-estimate the impact on the psyche of farmers of having the safety net and support of their pre- christmas cheque, reduced and removed.

I consider it one, if not the only positive thing, that farmers will now be forced to consider production entirely on financial merit.
Returns have to substantially increase to maintain production.
I think/ hope that the nature of having to 'earn' SFI payments will prevent it being used to subsidise production the way BPS and its forerunners did.

In the government’s Health & Harmony report, issued following the 2018 round of consultation meetings which farmers were invited to attend to give their views, increased farmgate prices resulting from a change in payment system was envisaged. So while maybe appearing to disagree I appreciate there may be some impact but my comment is in my view most of the inflationary rise in food prices is due to additional costs in the past three years after the raw material leaves the farmgate.

 

[Jackov Altraids]

If it means that less food is produced then yes it will make a difference.
price is driven by supply and demand

And it doesn't create resilience, reliable or consistent levels of food production.
Which is why, the world over, governments support the production of food.
Except here and now.

 

[livestock 1]

Just had another sfi meeting today one of the biggest grassland payments appear to be for land which grows absolute rubbish. Anyone who has spent money improving land can’t get this. Basically the sfi goes against production

 

[Jackov Altraids]

In the government’s Health & Harmony report, issued following the 2018 round of consultation meetings which farmers were invited to attend to give their views, increased farmgate prices resulting from a change in payment system was envisaged. So while maybe appearing to disagree I appreciate there may be some impact but my comment is in my view most of the inflationary rise in food prices is due to additional costs in the past three years after the raw material leaves the farmgate.

I would imagine you, more than possibly anybody, would have a better idea as to the extra 'risk' in calculating cropping costs when you haven't got a BPS payment as insurance?
How much more do you need to cover the extra risk?

 

[Henarar]

Just had another sfi meeting today one of the biggest grassland payments appear to be for land which grows absolute rubbish.

what option would that be ?

 

[Green oak]

As I’ve written before. I’ve gone 100% into SFI. I had a bad injury late January. Broken bones. I had a panic attack and put the farm into it because I never planted the autumn crops because we are told to wait until late October for grassweed control. I looked at the payments and I looked at my recovery and I had the take the SFI. Owner occupied farm. if I got someone in to do the work I normally do I would have lost money.

 

[livestock 1]

what option would that be ?

It’s about £600? Per ha most land isn’t eligible only real old fashioned stuff

 

[Hindsight]

I would imagine you, more than possibly anybody, would have a better idea as to the extra 'risk' in calculating cropping costs when you haven't got a BPS payment as insurance?
How much more do you need to cover the extra risk?

A good point. And there is some complexity in coming to a figure. As for example rents may reduce. And in the case of certain crops such as rape the uncertainty now experienced is such that BPS is irrelevant in the decision to drop, aided by SFI payments for alternative. And that is the point, I think, JA, for arable it is possible to use the SFI to replace a good proportion of the free cash that was BPS by selecting options that do not detract from yield or area produced but leave spare cash after costs incurred.

 

[turbo]

In what world can it be argued that BPS keeps food prices down??

Under bps could you 80% of your land down to wild bird mix and it be more profitable than growing crops? That’s how it could be argued that bps keeps food prices down,admittedly the bps was not as good icas because you didn’t need to grow crops to claim it

 

[farmerm]

Under bps could you 80% of your land down to wild bird mix and it be more profitable than growing crops? That’s how it could be argued that bps keeps food prices down,admittedly the bps was not as good icas because you didn’t need to grow crops to claim it

BPS was a payment for owning land, growing or not growing was irrelevant. It had absolutely no bearing on the price paid by consumers.

 

[Jackov Altraids]

A good point. And there is some complexity in coming to a figure. As for example rents may reduce. And in the case of certain crops such as rape the uncertainty now experienced is such that BPS is irrelevant in the decision to drop, aided by SFI payments for alternative. And that is the point, I think, JA, for arable it is possible to use the SFI to replace a good proportion of the free cash that was BPS by selecting options that do not detract from yield or area produced but leave spare cash after costs incurred.

But isn't that slightly different than deciding whether or not to drill a 100 acre field knowing that should all else fail, there was a £8k BPS payment to cover the costs?
I appreciate SFI spreads some risk but if anything, raises the required return on a crop?
Again, this will surely only lead to prices rising.

 

[Jackov Altraids]

BPS was a payment for owning land, growing or not growing was irrelevant. It had absolutely no bearing on the price paid by consumers.

In theory.
It should have been in practice too.
But every farm business survey shows otherwise.

 

[Hindsight]

But isn't that slightly different than deciding whether or not to drill a 100 acre field knowing that should all else fail, there was a £8k BPS payment to cover the costs?
I appreciate SFI spreads some risk but if anything, raises the required return on a crop?
Again, this will surely only lead to prices rising.

A different way to collect what I term ‘Ferrari cash’ ’Buy to let cash’ etc. but the end result is same. So SAM1, IPM4 etc, etc do add up. Knock off cost and what is left is ‘BPS’. The amount will differ between farms. So yes Not as simple as £200 hectare, but there all the same. Individuals will react differently in their approach and how much they use to ‘subsidise’ crop production. The fiasco with the 6 options now capped does show farmers react to price signals!?

 

[BrianV]

BPS was a payment for owning land, growing or not growing was irrelevant. It had absolutely no bearing on the price paid by consumers.

Where as SFI can only increase the price of food to taxpayers as so much land is taken out of production completely or produce seriously reduced, is that what your average taxpayer struggling to keep afloat wants, I seriously doubt it & I reckon if they knew the truth they would be horrified.
At least with BPS it did nothing to reduce the production of food keeping prices stable.

 

[Sonoftheheir]

As I’ve written before. I’ve gone 100% into SFI. I had a bad injury late January. Broken bones. I had a panic attack and put the farm into it because I never planted the autumn crops because we are told to wait until late October for grassweed control. I looked at the payments and I looked at my recovery and I had the take the SFI. Owner occupied farm. if I got someone in to do the work I normally do I would have lost money.

Will the reductions effect you?

 

[Goweresque]

A different way to collect what I term ‘Ferrari cash’ ’Buy to let cash’ etc. but the end result is same.

Not according to @Clive it isn't. His business acumen is whats earning his SFI payments apparently.......