Happy New Year! 

Welcome to our first quarterly Agrifacts briefing.

We have been aware that many of you would welcome some additional commentary on enterprise trends, crop and livestock husbandry issues, legislation, tax and finance and other factors which affect farming businesses.  For those of you who receive our monthly Agrifacts you will continue to do so, but we will also provide additional briefing notes on a quarterly basis in the form of newsletters like this.

We have seen a number of changes in our team recently and taken on three new members of staff in the last two months. Charity Shaw has joined us to help with farm management consultancy generally but also to undertake the mapping requirements for basic payment claims.  Gabi Rao has joined us as secretary and assistant to Tom Heathcote, and Joanna Yorke has joined us as Team secretary.

In this winter edition, Oli Lee has provided an update on livestock recording and compliance. Oli will be known to many of you and I am delighted that he has agreed to join our team on a part time basis, as well as undertaking a new direct farming venture in Leicestershire.

Damian McAuley from Indigro has provided an update on black grass control and soil structure management. Indigro provide the agronomy advice on most of our in hand farming operations. We have developed a close working relationship with Roger Davis the founder of Indigro and his team, not only because we feel that they provide excellent advice in respect of the effective use of agrochemicals but also because they give good practical, proactive advice in respect of cultivation techniques and cropping choices to provide a sustainable arable enterprise going forward.

I suspect that most of you are saturated with information regarding CAP reform and certainly we have tried to keep this to a minimum in terms of our regular information provision. However, there is still a great deal of misunderstanding in terms of the new regulations and, if nothing else, the administration association with a new scheme will be extremely demanding.

Charlotte Gore, who has prepared our previous CAP updates, has written a further briefing note on requirements for registration under the new scheme, and our understanding of the implications of the proposed ‘farmer test’. This latter point seems to be far more relevant than we had previously understood and it will be critical for all potential applicants to be satisfied that they do not fall foul of this test for eligibility.

Lastly, we are very aware that farming businesses require up to date and concise information and as such, we produce a monthly Agrifacts update. Click here to see the January edition of Agrifacts and if you would like to subscribe, then please click here to receive future updates.

If you have any comments, queries or observations on anything discussed in this note, please do not hesitate to contact me or any other members of the team.  

Richard Sanders - Head of Farms Department

Farms team contacts:

Richard Sanders     01858 410200 mob 07885 215972

David Gibb             01858 410235 mob 07860 440755 

Tom Heathcote      01858 410222 mob 07918 628983        

Charlotte Gore        01858 411218 mob 07785 425317

James Goodson      01636 642500 mob 07918 628981

Johnny Colman       01636 642511 mob 07880 190977

David Kinnersley    01295 226294 mob 07501 720405

Will Taylor               01844 267945 mob 07880 195987

Charity Shaw 01858 411230 mob 07501 720420

Click here to visit the Farms Department page on the Fisher German website.

The best arable businesses now see technology that supports ‘precision farming’ and improved business management as a normal part of their operations. The same cannot be said of the beef and sheep sectors where technology is still not widely exploited despite hardware and software applications being available with proven benefits. The FG Farms Department recognise the opportunities for livestock businesses by utilising technology that is widely available on the market.

There are increasing instances of where the technology available to the cropping sectors of the industry is being adopted by livestock businesses. This concerns the efficiencies that can be achieved through better management of inputs onto grassland, in effect ‘precision farming’ for grass and forage production. Many of the experiences learned by the arable sector are being passed to the progressive grassland farmers.

The use of technology to monitor individual animal performance is where even greater opportunities lie. The use of Electronic Identification (EID) of cattle or sheep, supported by software and appropriate hardware equipment, has a multitude of benefits to a livestock business. Individual EID can mean that an animal’s genetic and physical performance can be monitored and managed accordingly. Compatible equipment can also be used to measure growth rates and automatically sort animals into desired management groups.

EID Technology ~ investment with a return

Management Simplification ~ The ability to monitor individual animal performance improves all round management of the herd / flock. Efficiencies can be quickly gained by retaining the animals with the desired characteristics. Individual costings can be monitored aiding a continual improvement approach to business performance.

Market Premiums ~ There is an increasing range of market outlets for finished beef and sheep driven by processors and retailers demanding their own specific requirements for products. This presents opportunities for producers to meet these requirements in return for higher market returns. Full individual animal traceability is a fundamental part of this and can be delivered by use of EID technology.

Professionalism ~ The most progressive livestock businesses are the most professional in terms of business management of trading relationships. Adoption of technology is viewed as a natural part of this professionalism. This also greatly supports a business’s ability to forge sustained relationships with third party land owners.

Compliance ~ The need for any livestock business to remain compliant for cross compliance, farm assurance and any supply chain regulation is paramount. Compliance is complex but the management burden can be significantly eased through the use of EID technology. Where livestock businesses graze land under licence, the responsibilities of both licensor and licensee can be met more easily where the technology is adopted.

The ability to better monitor and demonstrate the results of grassland management, forage production, livestock identification, and livestock traceability will mean that the progressive businesses that are adopting technology will become an increasingly important part of the livestock industry. These businesses will be better placed to improve and develop land tenure and supply chain relationships which will lead to the continued growth of profitable livestock businesses.

For further information contact : Oliver Lee - 07855 282285

Harvest year 2014 was a very difficult one for black-grass control. A record breaking wet year in 2012/2013 with failed oilseed rape crops and remaining thin open crops that were unable to compete with large populations of blackgrass, lead to huge seed returns for the following autumn drilling.

Autumn 2013 started with very contrasting conditions but still unhelpful for black-grass control. September drilled winter wheat was placed into very dry seedbeds, where pre-emergence herbicides sat inert and degrading for weeks until enough moisture became available to activate them. When the rains finally did arrive in the middle of October, many later drilled crops were left in compromised seedbeds that pre-emergence herbicides were unable to seal. And in some cases the wet weather and ground conditions in late October and November made applications impossible until after black-grass had started to emerge – the point at which herbicide control deteriorates rapidly.

To top the early season off, the proceeding winter was one of the mildest on record. This prevented the natural winter kill of a percentage of the weed population, caused residual herbicides to degrade more rapidly and allowed plants that had survived the autumn herbicide programmes to tiller profusely. Where normally there is a peak of black-grass germination towards the end of October, last year and early this year the weather conditions allowed continuous seed germination from October until the spring. It was a perfect storm, and the results were clear to see as seed heads emerged above crops in millions of acres of arable land.

While cereal yields in general were excellent last year, the question is how much better might they have been? It is estimated that only 8 to 12 plant per m² will cause yield losses of 2-5%. 100 plants per m² might cause a one tonne per hectare yield loss. Some field areas last year had populations in excess of 500 plants per m².

However challenging the conditions in 2013/14 were for black-grass control, the levels of infestation cannot be blamed entirely on these specific circumstances. In fact we have been building towards it for many years. Black-grass has not appeared from thin air. It is an indigenous plant to the UK, but it was not a serious or widespread problem until the late 1970s. Since then rotations have tightened with more winter cereals and oilseed rape grown and fewer alternative break crops (and livestock/grass leys). In order to maximise farm profitability, cultivations have become less bespoke and drilling dates earlier. All these factors have put huge upward pressure on black-grass populations.

But infestation levels have remained relatively manageable due to the development of effective selective herbicides. It is in fact no coincidence that the fundamental changes in farm rotations and business structures over the last 40 years has shadowed the evolution of the modern agrochemical market. In other words, it didn’t matter much what you did as there was always a solution in an agchem can. That was, until they stopped working.

Enhanced metabolic resistance (where a plant is able to tolerate gradually increasing doses of herbicide) and target site resistance (where a mutation in the target plant prevents a previously active ingredient from working altogether) have resulted in most of the UK’s black-grass plants being in some way resistant to most of our available herbicides. And there’s no new chemistry on the horizon. Public availability of all chemical patents shows there are no new actives currently undergoing trials. And with one of the most challenging pesticide approval systems in the world in Europe, even if an interesting molecule was discovered tomorrow, approval would be at least seven or eight years away. If approval was ever granted.

Despite its decreasing reliability, chemistry still has an essential role to play. It would be agronomic suicide to attempt winter cereal cropping in many fields without robust herbicidal support. However, focussing entirely on a chemical solution would be foolish and show a lack of understanding of the historical precedent. It was a change in cultural practices that has driven the problem and it will only be through a reapplication of some of these practices that we stand a chance of improving the situation.

Based on research conducted by Rothamstead and compiled from a large number of trials, the table illustrates the relative control of black-grass that can be expected from a range of non-chemical, cultural control methods. A lack of resistance to these control options means they are durable over time, however it is clear from the statistics that control can be unreliable. So much so that in some circumstances a worsening of the problem could be caused by their employment such as poorly executed ploughing or drilling late into poor seedbeds.

That said, the singly most reliable method of culturally controlling black-grass is by spring cropping. And unlike fallowing, it realises an income from that cropping year – essential if a technique is to be employed as an integral and long term component of a farm business. In fact a spring crop can realise margins very close to those of its winter cousins with yield penalties almost entirely compensated for by significantly lower input costs – most noticeably a much smaller black-grass herbicide bill which can amount to &150/ha before Christmas in a winter crop.

Spring crops also help in other ways around the farm. They spread the workload and reduce operational pinch-points throughout the year. They also qualify as a different crop to a winter equivalent, meeting crop diversification obligations without over complicating the rotation, machinery requirements or storage logistics. However, there is a problem.

Establishing a crop in the spring when the weather and soil conditions are always unpredictable can be difficult. As black-grass favours heavier soils and areas of poorer drainage, establishing spring crops in the areas they are most needed can prove very difficult and to many farmers constitutes a risk not worth taking. But a solution is at hand, and like the cultural control method it aims to help, is non-chemical and low input. Its origin though is from a most unlikely source.

Over-winter cover crops have been a feature of continental European rotations for some time. In France and Germany they are in fact a requirement in order to protect against soil erosion. And it is these soil management and conditioning abilities that makes them very interesting for application in our pre-spring crop, over-winter fallows.

The cover crop is drilled straight after the preceding crop in the summer. It grows rapidly to provide ground cover over the winter and is then destroyed with glyphosate ahead of direct drilling with a spring crop. Species such as black oats, vetches and berseem clovers are used due to their powerful rooting and bio mass building properties. Their roots produce vertical fissures in the soil, maintaining structure and helping drainage. Their top growth draws large amounts of water from the soil profile in wet times and maintain moist seedbed conditions beneath the canopy shelter in the dry. All this helps to de-risk the establishment of the important spring crop and helps with its early sowing, maximising yield potential.

In addition to these benefits, whilst growing, the cover crop traps residual soil nitrogen left over from the previous crop and the leguminous species contained in the seed mixes fix more nitrogen from the atmosphere, releasing it to the spring crop after its destruction. There are also considerable long term benefits from the significant amount of organic matter that is returned to the soil for general soil health and in making conditions less favourable for the swamp loving black-grass plant.

Seed blends specifically designed for black-grass prone UK sites are capable of competing against but not smothering the weeds. They are open enough to let any viable seeds in the final spring drilling zone to germinate, emerge and then be killed prior to spring crop establishment. It is therefore critical that following crops are established with as little soil disturbance as possible to prevent a spring flush. Direct disc drills seem the most effective at slicing through the cover crop residues and limiting soil movement, but different drills and establishment systems are being tested in manufacturers’ trials and on farm as cover crops gain in popularity.

Trials results would suggest a 33% reduction of black-grass in spring crops is possible following a cover crop compared to autumn fallow – and that’s in addition to the 78-96% control from growing a spring crop rather than a winter crop. Coupled with the nitrogen and soil condition benefits, the easier and earlier drilling conditions and the organic matter increases they provide, the argument for incorporating them into a rotation are very persuasive. But if more persuasion was needed, the EU has recognised the important benefits of over-winter cover crops by enshrining them in their CAP reforms. Areas of cover crops will contribute 0.3ha for every hectare grown towards a holding’s Ecological Focus Area requirements. A more reliable, sustainable and integrated approach to weed and soil management would be hard to imagine.

For further information contact : Damian McAuley - 07968 279907

Active Farmer

In order to claim BPS, claimants must be an ‘Active Farmer’. This means that they must be carrying out an agricultural activity, and must not be operating one of the following non-agricultural activities:

· Airports
· Railway services
· Waterworks
· Real Estate Services
· Permanent sports or recreational facilities

Note that the active farmer rule only applies to the farm business making the BPS application, not any other businesses connected with it, or with any individual members of the business.

Operators of any of the above activities may still be eligible to receive BPS, but will have to prove they carry out significant agricultural activities, by meeting one of the three following criteria:

1. Annual payments for SPS or BPS are at least 5% of total non-agricultural receipts in the most recent financial year.

2. Total agricultural receipts are at least 40% of total receipts in the most recent financial year

3. Farmer has at least 36 hectares of eligible land

The majority of existing SPS claimants will be eligible, but if you think you may be affected by these new regulations, it is important to declare this, so please contact us to discuss further.

Registration for BPS

Applications for the Basic Payment Scheme (BPS) will have to be made online.

The current ‘SPS-online’ system has changed, and all farmers will therefore need to re-register with the new system, called the ‘CAP Information Service’.

The RPA will be sending invitation packs to all existing claimants to register in January; however, you can register now by phoning the RPA on 03000 200301, answering the security questions, and then registering online using the reference numbers given over the phone and by email.

The following can then be carried out in preparation for making the 2105 claim:
· Pass eligibility checks – i.e. confirm the claimant is an active farmer
· View and update personal/business details
· Give permission to an agent to use the service
· Confirm land parcels and entitlements held
· Add land features to land parcels using the online maps

Although the initial registration will have to be carried out by the individual claimant, we can provide further guidance on this process, and will be issuing a briefing note with full instructions to all existing clients and contacts who request more information in the next few weeks. Agents will be able to continue to submit claims on behalf of clients once the registration process has been completed.

Young Farmers

Subject to certain criteria, Young Farmers will be able to claim up to 25% additional payment on up to 90 hectares. To qualify, the claimant must be an active farmer, aged between 18 and 40 years, and have taken control of the holding within the 5 years before their first BPS application. ‘Control’ means that they must be directly exposed to financial benefits and risks resulting from the success or failure of the business. Holding a majority of shares/votes also gives control over the business.

Entitlement Transfers

The deadline for transferring entitlements under the current SPS system using an RLE1 form has now passed (21st October 2014). A new transfer window will open in January/February 2015, when transfers of BPS entitlements can be made using the new online CAP Information Service (CAPIS) system.

Please note the following:

· Claimants with less than 5 hectares of land and/or entitlements will not be eligible to claim BPS. Therefore they should consider purchasing extra entitlements to make up any shortfall, or purchasing/renting additional land.

· Any surplus entitlements not claimed in 2015 will be absorbed into the National Reserve. Therefore claimants should consider selling any surplus entitlements when the new transfer window opens in January 2015.

Ecological Focus Areas

Hedgerows

A hedge will qualify towards Ecological Focus Area (EFA) if it is grown on or adjacent to arable land and is either a continuous length of 20 metres, part of such a length, or a continuous hedge joining other hedges at each end.

Although DEFRA have previously issued warnings about delays to receipts if hedges are used for EFA, they are now suggesting that there should not be any delays.

Fallow

As previously noted, temporary grass can be used as fallow land. No agricultural production must be carried out between 1 January and 30 June, but herbicides and cultivation can be used to control weeds.

For more information on the Greening requirements, or to check you are compliant, please see our previous CAP Reform updates, or contact the Farms Team.

Dual Use

The RPA have confirmed that Dual Use will be allowed again for the 2015 claim year. However, note that if the landowner claims ELS/Organic ELS (OELS) that is affected by double funding, and the occupier claims the Basic Payment Scheme, payment reductions will apply to the landowner’s agreement.

ES payment dates

From 2015 onwards, all new stewardship agreements will have a start date of 1st January. Additionally, claim periods for all existing stewardship agreements (i.e. ELS, OELS, Upland ELS and HLS) will be aligned to the calendar year, therefore the timing of payment receipts will change to December and June, and the amount received during 2015 may be affected.

To check when payments will be received for your agreement, click on the following: http://ow.ly/uMUfs

ELS payments for existing and new schemes will also now not be automatically sent out, but will have to be claimed for prior to 15^th May 2015. Late applications will suffer payment reductions.

Changes to Cross-compliance rules

Hedge-cutting

As of 2015, the date from which hedge-cutting can commence each year will change from 31 July to 31 August. However, DEFRA are looking into a derogation to allow hedge-cutting in August for farmers intending to sow OSR or temporary grass during that month.

Soil Protection Review

From 2015 there will be no Soil Protection Review booklet, but instead a practical requirement to maintain a minimum level of soil cover unless there are valid agronomic reasons not to do so, and undertake land management practices to minimise soil erosion and maintain soil organic matter.

New grants available

The new Rural Development Programme for England commenced in January 2015.

Countryside Stewardship Scheme – This replaces the current environmental stewardship schemes and English Woodland Grant Schemes. We have previously confirmed that the first environmental stewardship agreements will commence in January 2016, with applications submitted from July 2015, and will comprise ‘multi-year’ management agreements and ‘Capital-only’ agreements. Management agreements will be either higher- or mid-tier, but will be more targeted than under previous schemes, with particular focus on biodiversity and water quality. Capital agreements will provide funding for items such as hedges and boundaries, woodland management plans, scrub control and water troughs.

There are also capital grants available for infrastructure works to help reduce water pollution from agriculture in Catchment Sensitive Farming target areas, such as re-surfacing gateways, biobeds and rainwater goods, which will be available in spring 2015.

A full collection of woodland schemes will be available from 2016, but in the meantime, there are Woodland Creation Grants available in 2015, with applications in February 2015 for planting late in the year; and grants for preparing Woodland Management Plans.

We are also expecting a new round of capital grant schemes for projects to improve farm and forestry productivity, and local support for rural businesses.

We are able to help with the application process and will provide further updates on these schemes once more information is released, but in the meantime if you think you have a project or investment that may qualify for funding please do contact us.

For further information contact : Charlotte Gore - 01858 411218