1 September 1995

IT WONT LAST FOR EVER…

BUILDING for a future more dependent on the market and with rising input prices concentrates the minds of the six farmers attending the meeting.

The prospect of having to live with less support has galvanised them into action on various fronts, mainly in cost cutting.

One way is by spreading fixed costs over a larger area. All bar Frances Francois Ringo and the UKs Richard Beldam, have increased their farmed area since 1992 – in some cases quite extensively (see Table 1).

A "huge demand" for land in Eire, triggered by a combination of an Irish Farm Retirement Scheme, the EUs Livestock Extensification Scheme, and the Rural Environment Protection Scheme, makes further progress for Jim McCarthy very difficult.

Only 5% of Eire is arable, much of it farmed under the countrys 11-month Conacre leasing sysytem. But the pool eligible for area aid is dwindling as much of it reverts to grass under the extensification scheme. As a result rents are "shooting up".

"Were losing a lot of our eligible land and its not being replaced," says Mr McCarthy.

Denmarks Ted Kallehave says limitations on the extent of farm ownership and land taxes restrict his flexibility. He owns 150ha (370 acres), has shares in another 650ha (1600 acres) of arable, and also share farms in England.

"There are very few farms for sale, and when a good one comes up youve got to be quick." A problem for the Danes, he says, is that the Dutch are buying up land because it is relatively cheap. "Even the price of poor land is going up as a result."

Another problem is the strong Danish kroner which keeps grain prices down.

Increasingly he looks to projects outside his main farming activities to attract income. With little forest in the country the government is keen to see what there is preserved through various incentives, he says. "Weve got a 20ha wood and we might get £5000/ha if we never do anything to it in future." That one-off sum matches the sort of money being paid for land to site wind-powered electricity generators, he adds.

Francois Ringo runs 145ha (360 acres) at Aubigny-en-Artois, near Arras in Northern France – a region dominated by small farmers. He finds he has little scope to alter his system. One saving grace is that the price of wheat, which accounts for half his cropping, is now "20-30% more than we thought it would be in 1992.

"Its very difficult for me to change. The land price is very high and I cant increase my area.

"I dont think I can change my costs much," he adds. The farms tractors have already been sold in favour of using those from a small co-operative of five farms on 450ha (1100 acres).

"We now use all farm-saved seed which has halved our seed costs." But he expects to have to pay a levy on the exercise next year.

In sharp contrast west Germanys Carl Christian von Plate is "very surprised at the reserves of adaptation there are on our farms".

On his larger unit in particular he has seen a steep drop in the outlay on plant protection. "Up to 1992/93 we were spending 400Dm/ha. At the time Id have laughed at the idea that we could reduce it. But weve halved it and were getting along well."

With the help of an agronomist he sprays less against weeds. And much closer examination for diseases has cut fungicide rates "dramatically". "It just shows we have to test everything," he says.

Other targets include machinery. "Weve got enough tractors to cope with the worst situation. That cant go on." And despite the relatively large farm size he prefers to stick to comparatively small tackle – for example a 3m rotary harrow rather than a 4m version.

"Big farms tend to buy big machines. Thats a mistake because they are more difficult to sell later on."

Udo Böhme, who has 1200 shareholders in his east German farm, says high labour costs on the dairy, pig and cereal unit are his main problem. This is despite cutting staff from 230 in 1990 to 147 by this year. Over the same period the area farmed rose from 4800ha (11,860 acres) to 5450ha (13,470 acres).

Contracting work, especially slurry injection, is a growing part of the business. From bringing in 300,000Dm in 1992, he expects it to generate 1.5m Dm next year.

Since 1992 he believes two important messages have emerged. "We must produce for the market and we have to reduce our major costs."

Richard Beldam admits English arable farms have done comparatively well on the back of sterling devaluations. "Because of the very weak pound weve had a very good time.

"But thats what gives me a problem. As soon as you believe things are going well they usually start to go wrong."

In his case he now has less land over which to spread fixed costs. His arable area is down from 1200ha (2965 acres) in 1992 to 1105ha (2730 acres) this year, and he expects to lose another 80ha (200 acres) in 1996.

This is because owners wish to sell the high-priced land, he says. Others are planting trees or entering long-term environmental schemes, so reducing his room to manoeuvre.


Table 1: Changes in

arable area since 1992

McCarthy (Eire)+80%

Kallehave (Denmark)+60%

Christian von Plate (WGermany)+30%

Böhme (EGermany)+7.6%

Ringo (France)No change

Beldam (UK)-8%