Perfect subsidy substitute?
Perfect subsidy substitute?
Environmental payments will
figure much more on UK
farms as Brussels policy
turns steadily greener. At
Hoe Hall, they are already a
key part of the business.
Robert Harris reports
ARABLE farming is in James Keiths blood. Given the choice, he would like to be paid a realistic price for his crops and decide how to spend the profits.
Like many farmers, he has ploughed a great deal of money into tree planting and hedging to keep the farm looking good and to attract wildlife. "Farmers want an attractive countryside as much as the public does," says Mr Keith.
But, with cereal prices falling by half and subsidy payments being eroded, any activity not contributing directly to the farms bottom line was in danger of being shelved.
"Provided we get a decent return, I dont mind forking out a proportion of the profits on other things," says Mr Keith. "But we are arable farmers first and foremost and something has to give when we are struggling to make any money."
Public concern over the environment, World Trade Organisation pressures on production subsidies and consequent greening of the CAP means environmental payments will be the norm, says Mr Keith. "Area payments will soon be a thing of the past. Indirect payments will come increasingly from the edge of the field and beyond.
"But if we are paid a fair price to do this in a structured way within reasonable guidelines, then I will be happy to have more reward from being a park keeper. Schemes, backed up with solid scientific advice, will benefit the environment and improve the landscape. But arable farming will still be my core activity."
He speaks from experience. Keen to continue his conservation work and prompted by the need to plant strips next to watercourses to ease LERAP (Local Environment Risk Assessment for Pesticides) head-aches, Mr Keith applied, with the help of his local FWAG adviser, to join the Countryside Stewardship Scheme in 1999 and succeeded at the first attempt.
The scheme runs for 10 years. Key areas include establishing 6m grassland strips around watercourses and ditches (31km) and 2m strips around other field boundaries (37km), as well as establishment and preservation of extensive grassland. And miles of hedge replanting and regeneration is underway, as is footpath and bridleway construction (9.4km).
Given his enthusiasm for shooting, Mr Keith is particularly keen on field margin management. "Well-maintained hedges coupled with the strips should provide an excellent habitat for grey partridges. And they, along with barn owls, are a good indicator of a healthy local environment. If we get it right for them, many other rare species will also benefit.
"It is a great pity that MAFF didnt listen to the Game Conservancy 10 years ago and offer better use of set-aside for habitat creation. Had it have done, 10% of arable land could be used for wildlife enhancement, which would have been a fantastic PR coup."
Payments to cover establishment and management of the various projects (see table) are linked to grain prices and are revised every three years. But they are paid in arrears, which has cash flow implications, and are pitched to supplement income forgone, and no more. Eighteen months into the scheme, it is apparent that careful management is needed to stay within budget.
"MAFF have certainly costed this pretty carefully," says arable manager Simon Brock. "We are only likely to just break even, even though we are using our own labour wherever possible. The main outside contractor we have used is to sow 2m margins with a specialist drill."
Indeed, the first months have cost money. "It has been very demanding on time and effort to set up," says Mr Brock. "And we have had a big workload to cope with in the early stages. All the strips have been planted in the first two years of the scheme, which caused a big clash with our autumn workload and increased overtime."
Other tasks, especially hedge coppicing and tree planting, can be undertaken during the quieter winter months. So far, more than 6000 hedge plants and 140 trees have been planted.
"A lot of things are sticking out of plastic and everything looks a bit artificial at the moment. But the farm will look an awful lot better in four or five years time," says Mr Keith. "Some of these "green box" policies from Brussels are having a visual impact. I dont find they replace lost "blue box" income, so making a profit is even more difficult, but they are noticed by the locals."
Meanwhile, the glut of heavy pigs on the organic unit, triggered by severely disrupted livestock movements at the beginning of the foot-and-mouth crisis, has been overcome.
But it meant about 100 pigs had to be sold at a heavy discount. Although they still made more than conventional stock, income was £7000 down.
A recent bout of pneumonia set pigs back, while warmer weather has reduced feed intake and growth rates. Last week, just 70 pigs were sent to Dalehead Foods in Cambs, 30% below target. Weights also suffered, averaging 65kg, at least 5kg below normal.
"Its a problem maintaining a constant number and weight when we have so few means of controlling pig growth," says Mr Keith. "This means it is difficult for Waitrose to fill the same number of shelves every week."
He has recently applied for the pig ongoers scheme. "At least the exercise brought us up to date with our risk assessments and business plan." Cash flow forecasts for the next two years have been completed and the overdraft has been transferred onto a two-year fixed term loan. "We have large borrowings at the moment after building the business up. The scheme will pay the first 5% of the loan in arrears annually, which would be a big help." *
Support payments for farmers will come from the edge of the field and beyond, predicts James Keith.
FARMFACTS
• Swanton Morley Farms, based near Dereham, Norfolk, is an 890ha (2200 acres) largely arable unit managed as a family partnership by James Keith, his wife Victoria, and mother Penelope.
• Arable crops cover 90% of the unit. Wheat grown on medium sandy loam soil goes as feed. Barley goes for malting. Sugar beet is also grown. A further 182ha (450 acres) is contract farmed locally.
• The farm also runs a 300-sow organic pig herd. A 26-cow suckler herd grazes parkland.
• A number of cottages are let.
• Farm staff of seven.
Hoe Hall Countryside Stewardship Scheme examples
Category Unit value (£) No of units Annual payment* (2000/01-2008/09)
Grass strips (2m) 15p/m 37566 5635
Grass strips (6m) 35p/m 31119 10,891
Extensive grass £85/ha 34.17 2904**
Footpaths 15p/m 5890 883
Bridleways 30p/m 3668 1100
Hedge coppicing/planting £2/m 2159 4318***
Hedge management £1/m 2196 2196****
* Assumes no change in rate; ** paid each year for 10 years; *** each year for first five years; **** each year for final five years.