Welcome to our Spring e-newsletter which contains useful articles from guest contributors agronomist Damian McAuley of Indigro and David Sheppard of Gleadell Agriculture. James Goodson talks about LEADER and we update you on BPS and hedgerow and boundary capital grants for 2016.

The text books tell us that a typical arable soil consists of approximately 45% minerals, 20-30% water, 20-30% air and 5% organic matter. These ratios have been assumed for decades and while farmers and regulators have focused on the management of the big three through their compaction, drainage and cultivation strategies and rules, attention has been lacking when it comes to soil organic matter (SOM).

Whilst UK agriculture was dominated by low intensity, mixed farming systems there was little need to pay SOM much attention - the textbook figures were probably about right and SOM was taking care of itself. But after a sustained period of intensification and in an era of tightening margins, plateauing yields and environmental attention, a new interest has focussed on this mysterious and out of sight biological world.

Despite an awareness of its presence, soil biological science is in its infancy. But its early conclusions should be of great interest to all growers – SOM is vital to crop performance and its levels are in serious decline. A recent analysis of Lancrop’s historical soil test data suggesting an average arable soil’s organic matter as being less than 2.5%.

So what is SOM and as such a small fraction of the soil profile why is it so important?

SOM is the organic matter component of soil, consisting of plant and animal residues at various stages of decomposition, cells and tissues of soil organisms, and substances synthesized by soil organisms. SOM is typically estimated to contain 58% Carbon (C) in the form of complex organic material, and the terms soil organic carbon (SOC) and SOM are often used interchangeably, with measured SOC content often serving as a proxy for SOM. This carbonaceous material comprises about 92% of dry weight, but other elements contained in SOM include nitrogen, sulphur, phosphorus, potassium, calcium and magnesium.

Soil organic matter is made up of three different components. Active SOM accounts for 10 – 20% of a soil’s organic fraction. It is the quick turnover component of SOM and replenished from fresh crop residues or the application of manures and composts to soils. Active SOM directly feeds the soil microbial population and contains a readily mineralisable source of Nitrogen. This pool of SOM is also the most easily lost.

Over a longer period of time, organic matter moves into what is called the Slow pool of SOM. This accounts for approximately 40% of SOM and, like the Active SOM, provides nutrition for soil microbes but also supplies plants directly with nutrients. The final component is Passive SOM. This is turned over very slowly, so is slow to build and very slow to replace (10-100 years). It accounts for 60-90% of SOM and while not feeding any organism directly, it is responsible for improving a soil’s cation exchange capacity and therefore its ability to hold onto essential nutrients.

On a larger and potentially very profitable scale, SOM also acts as a major sink and source of global carbon, sequestering it from the atmosphere and storing it underground. In fact, SOM represents one of the largest C sinks on the planet and plays a major role in the global carbon cycle. In recognition of this, some agricultural businesses are already benefitting from the trade of carbon tax credits whereby industry are able to offset their production of carbon dioxide with its sequestration in the field.

As well as providing direct and indirect nutrition to a field crop, new research is suggesting that SOM could also play a major role in general crop health. While only beginning to be understood, a feedback loop is now known to exist between a plant, the composition of the exudates it secretes from its roots and the response of the surrounding soil microbiology. This can result in a simple change to the nutrition available to the plant from the soil microbia or even the secretion of disease fighting compounds to a plant under stress from a particular infection.

As well as its important role in soil biology and chemistry, SOM can also make critical differences to a soil’s physical properties – improving infiltration rates, water holding capacity, workability, stability and resistance to damage, particularly from compaction.

While SOM can be easily and quite cheaply tested for, managers should approach the subject with an awareness of the different test methods available. The Walkley-Black method relied on the use of chromic acid and concerns over its health and safety and environmental safeness have relegated its popularity and use in the UK. The loss on ignition (LOI) test method involves the drying of a soil sample, before it is weighed, exposed to direct heat and then reweighed, resulting in a weight loss figure assumed to be the sample’s SOM content. However, this method can overestimate a soil’s OM on clays and chalks, as water can still be present after drying. An increasingly popular technique is the Dumas combustion method which involves measuring the SOM content of a very small sample in a high temperature, pure oxygen environment resulting in a more accurate measure of SOM.

Whichever method is used, land managers would be advised to begin to monitor this important resource if not doing so already. With average UK arable soils only containing 2-2.5% SOM and the inherent slowness of recovery, the task of rebuilding SOM might seem huge. But recent data analysis suggests that the optimum SOM rate might only be about 4%, beyond which certain nutrients become less available – in a similar manner to pH.

Improving SOM will not just be a matter of quickly adding composts to a soil – the quantities would be impractically large. Regeneration must be managed over a long period of time through cost effective and sustainable changes. This might include the application of some manures and composts, but perhaps also the leaving of straws for reincorporation into a field, new cropping and rotational changes or the growing of cover crops. But more importantly, an improvement in SOM requires a realisation on the grower’s part that no matter how dedicated an arable operation, all farmers are livestock farmers and must consider the biological activity of their soils in order to halt its degradation through negative land management and cultivation practices.

For further information contact Damian McAuley at Indigro on 07968279907 email him here

Although the Rural Payments Agency (RPA) has announced that 77% of claimants have been paid their BPS for 2015 (as at 31/01/2015), it seems that many farmers are still awaiting payment, and a number of payments that have been received are not correct.

The latest advice is that claimants with common land or those subject to inspections (remote sensing or physical) will be paid from February onwards, but that Cross-border claimants will have to wait until April 2016.

The RPA are aiming to start sending out Claim Statements from early February, and we would recommend that these are checked carefully against the BPS application forms submitted last year. Discrepancies have arisen with RLE1 forms lost or not yet processed meaning incomplete entitlement transfers and mapping changes, resulting in significantly lower payments than expected in some cases.

Looking to 2016 applications, the RPA have confirmed that they are encouraging applications to be made online, but that paper forms will be available on request, and sent automatically to all farmers (who do not have an agent) who applied by paper in 2014.

The deadline for applications this year will be Monday 16 May 2016.

Greening requirements and land eligibility remain largely unchanged for 2016, and there will still be the option for New Entrants and Young Farmers to apply for additional support.

Online applications

Unlike last year, the online system for applications is the system that the RPA will themselves use; while this will mean there are no issues with the two systems not communicating, the RPA system may not be so user-friendly for claimants. Early previews show that the application web pages will be directly linked to the gov.uk website that 2015 claimants will be familiar with. There should be no registration process required for existing claimants, with login details remaining unchanged from last year.

The online claim process itself will broadly involve three stages:

• checking land and entitlement schedules and amending where necessary
• checking the pre-populated application form (based on 2015 applications and any land use changes made online)
• making the necessary declarations and submitting.

There are still some actions that cannot be completed online such as adding extra field parcels, for which supplementary paper forms will need to be submitted. The fact that the RPA has not yet processed all RLE1 forms from 2015 (for both entitlement transfers and land changes) is also likely to cause some confusion.

Entitlements and transfers

Entitlements and Land transfers effective from 1 January 2016 can be made online, or by completing RLE1 paper forms. The benefit of online transfers is that confirmation will be received immediately, and the transfers will be updated overnight on the respective claimants’ online entitlement and land schedules.

It is hoped that the ability to submit BPS claims and transfer land and entitlements will be available from March.

Overall it would seem that the online application system will have some advantages but there are a worrying number of issues to be resolved and aspects still being tested. It is unlikely that we will know how well the new system will cope until large numbers of farmers and agents login and start making applications. For 2016 we do at least have a paper-based system already in place as a contingency.

For further information contact Charlotte Gore on 01858 411218 or email here

What is LEADER?

The Rural Development Programme for England (RDPE) has recently given the go ahead for LEADER funding, primarily focused at projects that create jobs, help rural businesses to grow, and benefit the rural economy. LEADER funding is delivered via a Local Action Group (LAG) and is available to local businesses, communities, farmers, foresters and land managers.

A total of &138 million is available England between 2015 and 2020 under the scheme.

What projects are eligible?

A LAG is made up of people from the local community and the local public and private sector. Each LAG decides which projects they will fund in their area. This depends on the priorities of the individual area but all projects must support one or more of the 6 LEADER priorities. These are to:

• support micro and small businesses and farm diversification
• boost rural tourism
• increase farm productivity
• increase forestry productivity
• provide rural services
• provide cultural and heritage activities

How to apply

To find out more, and to apply, you should contact your LAG, or check their website, for information about:
• funding in your area
• funding priorities – including the local development strategy
• how to apply for funding
• past projects
• LAG members

Your local action group

Find your LAG and contact details on the map or in the list.
Map of Approved LEADER Groups (PDF, 2.21MB, 1 page)
Approved Leader groups (PDF, 726KB, 20 pages)

In addition, LEADER and LEP boundaries have also been included on http://www.magic.gov.uk/MAGIC. This website provides geographical information and is presented as an interactive map which can be explored using the various tools included.

What we can do

Fisher German have a wealth of experience in securing grant funding for rural businesses and are currently working on outline applications as well as full LEADER applications for clients considering a wide variety of projects.

For further information contact James Goodson on 01636 642507 or email here

The first few weeks of the New Year have not brought much solace in the form of significantly better prices to arable farmers.

On January 12 the United States Department of Agriculture (USDA) estimated world carryover stocks of wheat at the end of the current season (June 30th) will reach 232 mln mt, with much of the stock being held by exporting nations and trading blocs. Global Corn (maize) stocks were also estimated at a healthy 209 mln mt. Too much grain chasing limited demand has been the order of the day for much of the last two years and at the time of writing prospects for another large crop in 2016 appear promising. This world picture is mirrored in the UK where it looks like end of season wheat stocks could top 3 mln mt, or around 1.3 mln mt more than a normal carry out. The picture looks somewhat bleak so what could turn things around?

The weather is an obvious factor – we have a couple of months of winter to get through with the dangers of winterkill and severe frost and then the risks of extreme heat or drought in the Spring or Summer need to be watched. The regions at most risk are the usual candidates ie Russia, Eastern Europe, China and the US Midwest where spring plantings will be monitored closely. A secondary potentially supportive factor is the size of the ‘fund / speculator‘ short position in Chicago wheat futures. At the time of writing their short position in Chicago wheat is around 9.5 mln mt, alongside a hefty short position in Chicago Corn futures of around 20 mln mt. Any weather or political event that causes them to look to buy back these positions could provide a useful selling opportunity but this has not happened yet.

For UK farmers the value of Sterling will be a key factor over the coming months and we could see ongoing volatility given the likely UK EU in/out referendum later this year. Since January 1 the & has fallen vs the Euro by approximately 7%, which should, given a more balanced supply and demand scenario, have boosted UK prices by a similar amount. However we have recently seen UK prices hit contract lows for the season which demonstrates that whilst the weaker & cushioned the fall, international price pressure has still pushed our prices lower.

New crop November 16 wheat prices represent about a &10 premium to those available for old crop in May. Given the situation outlined above, whilst &115 – 120 ex farm isn’t a great price, or even a price to sell a lot of wheat at, it may be a price at which it is worth locking in some initial sales. Sooner or later our markets will turn around and the drivers will be a structural change in the supply and demand fundamentals caused by a significant weather event or crop failure. Currently it is hard to see when such an event will occur and banking on this sort of occurrence happening in the next six months is hardly a sensible marketing policy.

However, to end on a positive note, prices don’t go down every day, rallies do occur and they are probably worth selling into at least in the short / medium term – even though it appears likely that the fundamental oversupply situation will continue to pressure the market.

For further information, contact David Sheppard on 01427 421222 email david.sheppard@gleadell.co.uk

The following options (same as new Countryside Stewardship) can be used for this grant:

For further information, contact Lisabeth Grindrod on 01905 459436 or email here