Change Is Fast Approaching In Agricultural Industry

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Change Is Fast Approaching In Agricultural Industry

The UK’s Agricultural Industry is facing the largest changes seen in over a generation and possibly the biggest change to farm support since the Agriculture Act 1947. The face of farming will alter substantially over the next few years and businesses need to adapt and change with it.

Following the departure of the UK from the EU, DEFRA has been able to review the existing support schemes, cherry pick the parts which work and create a new regime of support for the rural sector. The UK is now free from the EU ties which limit the level and type of support which can be provided to ensure a level playing field across the European Union. The UK can now create a bespoke system which meets better the requirements of the British taxpayer and also matches the unique requirements of the UK rural economy.

By moving to create a system which differs from that used across the EU, there will undoubtedly be sectors which receive less support than their neighbours across the channel and these areas will need to adapt and change to survive. Consequently, there will be parts of the of the UK rural economy which receive more support than the EU and these areas will likely thrive in the coming months and years.

As the UK moves away from the current system of the Basic Payment Scheme and towards the new headline policy of ‘Public Money for Public Goods’, there will be a lot to learn and understand about the new schemes. Firstly, there will be a raft of new acronyms to get our heads around, from ELMS to SFI to PM4PG and many more. There will be a whole host of new guidance, many will recall the multiple booklets received from MAFF back in 2004/5 with the introduction of the SPS, this will replicated but online to ease the cost to the UK taxpayer!

Farming businesses will need to consider all of this new guidance and understand the impacts for their sector and the wider economy. Advice throughout this process will be key as there are very few individuals who will have the detailed knowledge of all the future schemes, government policy and their direct impacts on the rural economy and your business. I strongly recommend that all UK agricultural businesses, no matter what size and scale, take advice from their land agents, accountants and financial advisers in the coming months to understand the likely impacts for them and the areas of policy they should be following closely.

Most businesses will need to adapt to the new support schemes and embrace change when it comes. This may not be immediate with policy and schemes only trickling out of government this year but the next 18 months will bring the introduction of many new schemes, regulations and clarification on the direction of travel across the industry. Businesses need to be ready to review and understand this information and prepare to change.

New government run schemes are rarely simple or straightforward and past performance has shown how they can often hold problems during their first few years before most glitches are ironed out. Although it can be advisable not to be a guinea pig at times, don’t dismiss entering new schemes which may be lucrative and less competitive in year one giving your business an advantage over your competitors.

In advance of the full details on the new support schemes and regulations, businesses should now be reviewing their individual enterprises and their business as a whole, to establish the parts which will work without traditional government support, the areas which can be improved (both in terms of efficiency and growth) and the areas needing to change. It is these last areas which will require attention, this may be through streamlining, expansion or diversification.

For advice on the new farm support schemes and assistance in reviewing your business please contact our Agricultural Team on 01423 860322.