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The pressure may have come off some commodity prices recently, but food price inflation remains at a 20-year high, according to research from the University of Exeter Business School and Nottingham University.

They estimate the higher food costs will push the average cost of a Christmas dinner for six people to about £74, some £3.70 higher than last year.

The research says the drivers of food inflation are distinct from overall inflation and centre on high, volatile world agricultural commodity prices, rising oil prices and the low sterling exchange rate.

“Food price inflation in the UK is well above the OECD European average, meaning poor families in Britain are most dramatically impacted by increasing food costs because it accounts for a higher percentage of overall household spending.”

A scheme to attract new entrants into Scottish agricultural and rural businesses has been launched by Scottish Land & Estates, NFU Scotland, Forestry Commission Scotland and The Crown Estate.

The initiative aims to provide a broader range of assistance for people getting into the sector, other than traditional tenancies. Options under consideration include a mechanism to match specific skills of potential new entrants to opportunities that become available; a training package to develop land-based skills; and a system of ongoing support for new starts over their initial years in the sector.

There have been informal discussions with government about the initiative and formal proposals are expected shortly.

“I truly believe that there are opportunities in the industry and younger operators out there who are ready, willing and able to take advantage of them when they are presented,” Alan Laidlaw, The Crown Estate’s head of new business development said.

“We need to ensure that a positive future for food and farming is embraced and that land opportunities, in whatever form, are made available to the best business operators.”

Changes to VAT and business investment tax relief could do much to stimulate the rural economy, says Mike Harrison of accountant Saffery Champness.
 
On VAT, the Chancellor could use his autumn statement on 29 November to introduce a reduced rate for property works to boost maintenance and extension work in the building trade, he says. 

Tourism could also be encouraged through a reduced rate of VAT, encouraging more holidays at home and in the countryside to aid the rural economy.

Although larger companies will benefit from lower corporation tax rates from April 2012, there was nothing to help partnerships or sole traders cope with the reduction in capital allowances next spring, so the Chancellor could offer these businesses enhanced allowances to stimulate investment, suggests Mr Harrison.

Diversified businesses could also be helped if the tax rules were changed to allow losses in one business to be offset against the profits of another.

Essex-based pre-cast concrete company Milbank has formed a partnership with the German silage clamp construction specialist Böck Silosysteme.

The deal has resulted in the formation of a new company, Bock UK, which offers a range of silage clap services, including design, manufacture, installation and maintenance, including coverings.

The company believed demand for silage clamps in the UK would be boosted by the demand from biogas plants using energy crops as the main feedstock. Böck installed the UK’s first silage clamp of its kind at Future Biogas in Norwich and three more have followed in partnership with Milbank.

“Although the Bock silo system (known in Germany as the traunsteiner silo system) is commonplace in Europe, it is only recently that the UK market has seen the benefits,” Sean Milbank, managing director of Milbank said.

Grants of between £2,500 and £25,000 are available to farmers, foresters and horticulturalists for investment in green projects and new machinery.

The funding comes from a £20m DEFRA initiative to help rural businesses improve profits and reduce their impact on the environment.

Projects under The Farming and Forestry Improvement Scheme will fund green schemes to save energy and reduce carbon emissions. Support is also available for cutting dependence on artificial fertilizers through better use of manures, for improving soil quality, better animal health and welfare, saving and recycling water and more efficient timber processing.
 
The grants will be allocated between now and December 2013 and will cover a maximum of half of the total cost of projects in uplands areas and a maximum of 40% of the total cost in non uplands areas.

It’s been a good year for farmer-owned agricultural suppliers ACT, which has announced record results.

The co-operative made a pre-tax profit of £2.4m on record sales turnover of £108m in the year ending 30 June 2011. It has allowed the company to pay out a £1.1m trading bonus to its 5000 farmer shareholders, the nineteenth year of doing so.

ACT managing director John Hamilton said the performance was driven by a 10% increase in fertiliser and feed volumes, with particularly strong growth in Scotland. There was also the “largest ever” annual sales of forage seeds.

“This demonstrates that farmer-owned co-operatives can trade competitively and deliver good service and good value,” he said.

Got a view on a college or uni where you can study agriculture or a related topic? If so, share it and you could win £200 - we're collecting reader opinions on the best educational establishments and courses.

FW’s Farmlife section this week looks at "10 of the Best" places to study these subjects. We want to hear whether you agree or disagree with the comments we’ve made and to gather opinion about the other establishments you think we should have included.

There are lots of quick and easy ways that current and past students, parents and staff can give opinions and contribute reviews. Find out more on p72 of this week's issue or at www.fwi.co.uk/studentspecial