Welsh get post-CAP profit advice

WELSH FARMERS can now reasonably estimate how much support they will receive after CAP reform and must look at all the farm‘s resources to drive profitability.

While diversification would not be the answer for everyone, ADAS Wales‘ managing director John Cook said farmers should look at business assets such as family members‘ different skills, to develop new revenue streams.

Speaking at the Royal Welsh Show, he said: “Maximising the single farm payment is an important first step, but farmers need to plan and budget for a market with no support.

“They need to look at their business and look at everything it can be.”

DEFRA and the Welsh Assembly were writing to farmers to validate SFP entitlements, he added. “The first step for farmers is to ensure they receive the support they are entitled to.”

Farmers visiting the ADAS Wales stand at the show were asked whether they felt they were likely to be more or less profitable after CAP reform.
 
“Early indications are that numbers are broadly equal,” said Mr Cook. “There is a lack of understanding about the detail and the facts need better communication.

“There is still uncertainty among farmers as to how modulation will affect what they will receive.

“But we know there is to be no national envelope in Wales and the minister announced recently that modulation is likely to be about 10% in 2006 to co-fund the new Tir Cynnal entry-level agri-environment scheme.”

Euryn Jones, agricultural specialist at Barclays, said some Welsh farmers were starting to think about how to review their businesses, particularly cash flows and overdrafts.

“There has been an increase in borrowing, particularly from the dairy sector. Farmers are spending on securing quota for their future and investing in on-farm facilities,” he said.

“By now, we know virtually all the detail of CAP reform. There will be an entry-level agri-environment scheme in Wales, and cross-compliance requirements might not be onerous.

“Dairy farmers in particular must ensure they get as much of their modulated income back in agri-environment schemes as possible.”