Bank warns on falling SFP

ENGLISH FARMERS are likely to see their single farm payment cheques diminish by 26% after five years, according to experts at Natwest.

Ian Kenny, head of agriculture at the bank, said that EU and regional modulation, scale backs due to European budget constraints and the national reserve would all take their toll.

“We now know enough detail on the single farm payment to start planning, and farmers need to grasp this and start thinking ahead.

“It is not just a case of getting the new SFP instead of production subsidies, with the one replacing the other.

“It‘s a totally new scheme, no longer linked to production and all about working with the rural community.”

He made the comments on Monday (Apr 18) at the launch of a new bridging loan designed to help farmers‘ cash flows while they wait for the delayed SFP.

But he was at pains to emphasise the advantages of the new system, too: “There is lots of choice and plenty of opportunities for farmers”.

Although English farmers would be worst affected, those in Scotland, Wales and Northern Ireland must also realise that support was on a falling trend, he said.

According to modelling carried out by the bank, the biggest losers in terms of the SFP would be arable farmers with no potatoes and dairy farms in less favoured areas.

Although the figures on regional modulation and financial discipline are still provisional, a 300ha English arable farm with 20 beef finishers would receive £21,000 less in 2012 than at present, Mr Kenny estimated.

A 2m litre a year English LFA dairy farm, with 24ha of arable crops and 30 slaughter premium claims a year would see support almost double by 2006 before sinking to half current levels, losing £11,000.

In percentage terms, the average hill beef and sheep farm in England will lose two-thirds of its SFP by 2012, equivalent to a reduction in support of £10,000.