Calculating for the long term future

Calculating the full impact of the single farm payment on a livestock business means assessing income changes until 2012.

Only then will farmers be able to make effective, long-term management decisions.

That was the message from David Hall of the English Farming and Food Partnership when he addressed livestock producers on a Lancs hill farm – but he was surprised only one farmer present had undertaken a full-term evaluation of the impact of SFP.

“Most farmers have an idea what’s coming this year, but not after eight years.

However, it’s essential to assess the long-term situation,” said Mr Hall.

He urged livestock producers to take advantage of advice being offered and said more farmers should use the Single Payment System calculator.

“By inputting a range of farm data, including stock numbers and acreage the calculator can assess the full impact of SFP to individual holdings over the next eight years.

“The ADAS Touchstone service is also available and enables farmers to supply their accounts and compare their businesses performance with other similar farms.

“This method of benchmarking has never been more valuable to beef and sheep producers who must now start to make management decisions that aim to off-set the shortfall in income caused by the SFP.”

Mr Hall said farms who fed their data into the SPS calculator program would inevitably see a significant downward trend in the amount of support coming into their businesses over the next eight years.

“Even the 2005 SFP will be about 90% of the historic payment.

This is a time of great change, but farmers can learn to adapt.

In future the SFP cash will come in one lump, so it will be important to learn how to manage the business to cope with that compared with the regular inputs farmers have had previously.”

Although undertaking a review of all on-farm resources was key to making up any future income shortfall, livestock management priorities must focus on reducing costs and increasing productivity, Mr Hall told farmers.