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5 January 2016
The Future of Farming
I attended recently the Tenant Farming Association’s launch of their 10 year FBT initiative to encourage Landlords to look towards longer term farm business tenancies with the intention that this will provide for a greater degree of security for tenants to invest in their farming businesses.
The average FBT term at present is 3.7 years (including bare land and equipped holdings). In order to achieve a 10 year average term, this would mean a shift towards 20/25 year term tenancies on fully equipped holdings (including those with residential elements).
It is not for us to say whether this is the right approach or not. The market will determine that. But it does bring into the spotlight the future of the family farm and how best it will place itself within the industry.
For the ‘traditional’ family farm with potential successor generations, it should be right that they should look to optimise the area they farm and if that requires additional land to add to an existing tenanted farm or an owned farm, careful budgeting and a business-like approach to Landlords will be required.
I also attended a DEFRA stakeholder meeting on their proposal to prepare a 25 year food and farming strategy which it hopes will be published in early 2016.
The sentiment of the stakeholder meetings is right; greater R&D investment, sound medium to long term land tenure, Government support on export and branding, combined food chain approach (retailer, processor and farmer in the same room) and reduced regulation.
Both these events highlight the inherent difficulty of farming generally to adapt on a short term basis. For farming to have a bright future, there does need to be a long term plan to provide farmers with sufficient support (not confined to financial) to withstand the volatility of commodity markets as we have seen over the last 5 years.
There will no doubt be a wide debate on subsidy support as the EU referendum delves more and more into the detail of the Yes and No arguments. But let us be clear on what we think might be a future without subsidy or a reduced subsidy.
Let us also be clear as an industry on regulation and how we can better influence how regulation is implemented once it is in place. The recent launch of the Countryside Stewardship scheme saw 16 changes to the guidance in July alone with other changes made toward the 30th September deadline. This is not how farming strategy is properly planned and it is not how Government should approach its support.
If the message from Government, retailer, processor, farmer is that they all want to see a profitable, healthy, secure future for farming then the sentiment of the above for longer-term planning over short termism is probably a good place to start.