Farming in the Uplands - ARCHIVE: Defra

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Ev 78 Environment, Food and Rural Affairs Committee: Evidence Higher Level Stewardship (HLS) 57. Higher Level Stewardship (HLS) is also of considerable importance in the uplands as it provides funding for additional and more complex habitat management in priority areas. Since November 2008, these objectives have been broken down into regional priorities. Natural England has identified 110 target areas, including almost all upland areas, each with their own set of environmental priorities. The priorities for each target area are set out in Target Area Statements. Agreements are sought in each target area that will make the greatest total contribution to the identified environmental priorities for the available resource. As well as the target areas, which cover multiple objectives, Natural England has identified themes which give the priorities for HLS outside the target areas. These themes have been agreed on a regional basis. The theme approach allows those farmers and land managers outside the target areas to focus classic scheme renewals and new HLS applications to meet theme priorities. Moorland and upland rough grazing are the greatest source of expenditure for HLS agreement options in the uplands although there is some regional variation. 58. HLS, CSS and ESAs are disproportionately important as income sources in the uplands compared to lowland areas. In October 2009 (prior to the launch of Uplands ELS), 26% of farmed land in the LFA was in ELS or its organic equivalent. But, overall, around 70% of farmed land in the LFA was under some form of agri-environment scheme with over 40% managed under ESA, CSS or HLS schemes. Nationally around 68% of farmed land is managed under some form of agri-environment scheme with around 58% of farmed land in ELS and only around 9% managed under CSS, ESA or HLS schemes. Socio-Economic Measures under the RDPE 59. The Rural Development Programme for England (2007–13) implements the EU Rural Development Regulation, which is Pillar 2 of the Common Agricultural Policy (CAP). In addition to funding agrienvironment schemes, the Programme provides grant support to improve the competitiveness of the farming and forestry sectors and diversification of the rural economy. The Programme provides support for a wide range of actions, including: modernisation of agricultural holdings; training; innovation; improvement of infrastructure; adding value to products; diversification; and, rural broadband. Opportunities for support provided through the RDPE are available to hill farmers to take up. 60. The RDPE also provides support to rural communities to maintain the quality of life in rural areas, for example through the provision of basic services and engages local communities in decision-making about how the Programme’s support is used within the local area through the Leader approach. The Leader approach (also known as Axis 4) is a good example of the Big Society at work and oVers an opportunity for local people to become more involved in managing their own aVairs, while at the same time capitalising on socio-economic opportunities. A large proportion of upland England is covered by Leader groups to help upland communities to help themselves in a way which is inclusive of upland farmers. Common Agricultural Policy (CAP) Reform 61. The impact of CAP Reform in 2003 has already helped to bring hill sheep numbers more in line with domestic and export market demand. Although breeding sheep numbers have declined, improvements in breeding eYciency by the farming industry have seen no noticeable impact on lamb production levels. 62. Public funding for upland farmers will continue to change in the future as the CAP is reformed further. The UK Government has set out an ambition to make European farming viable without subsidy, and will be seeking deep and lasting reductions in farm income support in the forthcoming negotiations on CAP reform and the EU Budget. While a number of European Governments remain committed to arguing for the retention of farm income support, increasing recognition by Europe’s leaders of the budgetary pressures facing the EU mean that the UK stands a better chance than in previous negotiations of achieving its ambitions. Farmers—including those in the uplands—need to recognise that income support from the CAP on the current basis is very unlikely to continue indefinitely, although a realistic transition period is likely to be secured. 63. Research19 has found that although farmers were aware of approaching CAP reforms, very few were seeking to change their business in advance of this. A “wait and see” approach was common among the farmers interviewed as part of this research project, along with a reluctance to admit that public support could be reduced without increases in returns from livestock farming. EMBARGOED ADVANCE COPY: Not to be published in full, or part, in any form before 00.01am GMT Wednesday 16 February 2011 19 Economic and environmental impacts of changes in support measures for the English Uplands: An in-depth forward look from the farmer’s perspective, Countryside and Community Research Institute and Food and Environment Research Agency
Environment, Food and Rural Affairs Committee: Evidence Ev 79 Farmers’ Attitudes, Profiles and Succession Expectations 64. The Upland Farms Practice Survey asked farmers what they thought were the most important challenges for the future. The most common responses are shown in Table 1. Table 1 MOST IMPORTANT CHALLENGES FOR THE FUTURE Most Important Challenge for the Future % of upland farmers in agreement Market Prices 76% Changes to Single Payment 65% Impact of New Regulations 65% Input Costs 59% Level of Environmental Payments 47% Source: Uplands Farm Practices Survey 65. With market prices often not covering costs of production this is a logical challenge for upland farmers to perceive and want to address. We have also noted that changes to the CAP will make a significant impact upon upland farms. There are other economic factors that are not so much in the immediate consciousness of upland farmers but do have the potential to help improve competitiveness. These are primarily: succession, and education and skills—particularly business planning. 66. The average age of an upland grazing livestock farmer was 57.7 years in 2007 which suggests slow succession rates (although this is an issue for the whole farming industry). Succession is secured on only 37% of upland farms—almost exclusively within the family. This reliance on attracting new entrants to upland farming through the family route is commonplace. For a further 26% of upland farms, succession remained uncertain, and for 27% no succession arrangements were in place. For those with no succession arrangements, the most commonly quoted reasons were: “family do not see the future in farming”, “family not interested” and “no family”. 20 67. The Uplands Farm Practice Surveys found that 21% of upland farmers planned to exit the industry within the next five years. Recent research21 suggests that this figure could be even higher moving towards a long term trend of fewer but larger farms. It also indicates that there will be more frequent changes in ownership and tenure than currently exists. Despite this there is an underlying determination for many upland farmers not to leave the industry (Table 2). Table 2 FUTURE PLANS OF UPLAND FARMERS Future Plans % of upland farmers in agreement Will do all that they can to remain in farming 41% Will try to remain in farming 38% Plan to retire 19% Thinking of leaving farming for another career 2% EMBARGOED ADVANCE COPY: Not to be published in full, or part, in any form before 00.01am GMT Wednesday 16 February 2011 Source: Uplands Farm Practices Survey 68. For those aged over 65, less than a third planned to retire with 37% “planning to do all that they can to remain in farming” and a further 31% “trying to stay in farming.” 69. The ability to remain in loss making activity can be supported by strong assets—essentially eating into the asset base of the business in order to survive. The balance sheet for upland farms is strong, even on tenanted farms who record a net worth of 86% of total assets. 22 Borrowing is low on upland farms compared to other farm types. Almost half of upland farmers make no interest payments or actually receive interest payments from oV farm investments. 70. The 2007–08 Farm Business Survey found that half of commercial upland farmers had no further or higher education qualifications. Whilst this is somewhat higher than for lowland farmers (37%), it can largely be explained by farm type. A comparison between lowland and uplands for grazing livestock and dairy farms suggests that there is very little diVerence in their levels of further education or attitudes to skills. When asked about skills gaps, over 70% of grazing livestock farms had not identified any knowledge or skills gaps, compared to just over 60% of dairy farmers. 23 71. Formal business planning is also low, with only 40% of upland farms having a business plan and under half setting any targets for business or environmental improvements. 20 Farming in the English Uplands, Defra Agricultural Change and Environment Observatory 21 Economic and environmental impacts of changes in support measures for the English Uplands: An in-depth forward look from the farmer’s perspective, Countryside and Community Research Institute and Food and Environment Research Agency 22 Farming in the English Uplands, Defra Agricultural Change and Environment Observatory 23 Farming in the English Uplands, Defra Agricultural Change and Environment Observatory
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walked they ain’t coming back, be
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great, but there is the wider issue
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