Arable farmers look at new income options

By FWi staff

A SURVEY of RASE members confirmed that a large number of farmers are looking to increase the sale returns from their crops.

According to the survey, the most popular option was bread milling wheat. Forty-six per cent of respondents said they would look to increase their acreage in the next five years.

And with farmers incomes dropping to a quarter of what they were in 1995/96, many are looking at new options to boost their dwindling incomes.

Mark Hill of Deloitte and Douche urged farmers at Cereals 99 yesterday (Wednesday) that that they must add value rather than cost-cut, and turn away from “commodity core food.”

Mr Hill does not believe that a cost war is one that the British can win, as all the cost-cutting options have been exhausted in recent years, he said.

After premium cereals, the most popular option being considered was converting part or whole farms to organic production.

But farmers looking to add value need to take stock of their physical resource and management skills, said Mr Hill.

Seed, milling and malting crops have attracted premiums, said Mr Hill.

“Now, with new varieties, there is less yield penalty attached to these varieties. However, growing these crops will look at the overall effects on the farms budget and cash flow.”

Long-term assessment is even more critical for those looking to go organic, aid Alistair Leake of CWS farms.

“Organic wheat has attracted premiums of up to £135/t, so it is enticing. However, farmers must take into account the two-year conversion period and do their budgets over the whole rotation,” he said.

Although organic wheat can generate a net margin of £1000/ha, other areas of the rotation could attract losses, Mr Leake warned.

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