Fisher German Farms newsletter Summer 2017

Managing Risk in Farm businesses

As the direct subsidy (pillar1) support for farmers decreases and the post Brexit world gives increasing exchange rate fluctuations and political volatility, the financial & regulatory risk for farmers increases. Markets are becoming increasingly complex and financial volatility will continue. The increase in wheat price since the GBP has fallen against the Euro for example will alone equate to the Basic Payment Scheme payment on a &/ha basis.

Guessing the direction of market is risky in this volatile environment and the impact of getting the timing wrong higher, as the spread between the highs and lows over the last two seasons has shown.

Managing input and output price risk is therefore increasingly important to ensure farm profitability and the starting point is knowing your cost of production. Farmer’s cost of production figures should enable agricultural businesses to;

1) Understand where the cost lies in their business and therefore, what are the priorities to tackle

2) Benchmark the business against others and see where improvements can be made

3) Know at what price they can lock into a profit when selling their produce or purchasing inputs.

The second part of managing risk is using the tools available to reduce it to an acceptable level such as;

a) Interest rate risk - Balancing fixed and variable borrowing rates on loans

b) Sale price risk - Selling on fixed price contracts, pools or using options

c) Input price risk - Buying through groups, planning forward purchases etc

d) Exchange rate risk - Hedging subsidy payments against the euro in the short term, forward purchasing imported inputs etc

Risk will never go away but a systematic approach to managing it can avoid putting businesses into situations which compromise their financial viability and sustainability. The need to do this continues to increase and is likely to do so further as the post Brexit world becomes clearer.

Our Farms department would be pleased advise you how to manage risk in your own agricultural business, Contact David Kinnersley on 07501 720405 or email here

Grant Funding Opportunities

Increasingly, successful farming businesses are focusing on cost of production, specialising in identifiable quality or diversifying. There is a real opportunity to secure grant aid for diversification whilst this is still EU funded.

Estates and landowners should grasp the opportunity to broaden business ventures, which can grow to compliment agriculture as it comes under increasing pressure and can no longer be the income provider it used to be.

There are currently a variety of grant funding opportunities available for Farmers and Landowners which include the following:

Rural Development Programme for England (RDPE)

RDPE grants, administered by Local Enterprise Partnerships, are focussed on helping existing and new rural businesses to expand, diversify and to create more rural jobs. The available funding focusses on three different areas:

Business Development
Food Processing
Rural Tourism

The Business Development Grant will normally cover up to 40% of a projects total eligible costs, minimum grant funding varies depending on the Local Enterprise Partnership but starts from &35,000 up to a maximum of &170,000.

The application process is competitive and applicants will be subject to a rigorous 2 part application process, starting with an Expression of Interest. If successful, applicants will then be invited to submit a full application. The application process is now open and closes on 31 January 2018.

Further information can be found here

Countryside Stewardship Scheme

Countryside Stewardship (CS) provides financial incentives for land managers to look after their environment through activities such as:

conserving and restoring wildlife habitats
flood risk management
woodland creation and management
reducing widespread water pollution from agriculture
keeping the character of the countryside
preserving features important to the history of the rural landscape
encouraging educational access

The scheme is:

open to all eligible farmers, woodland owners, foresters and other land managers
suitable for many types of land use including conventional and organic farmland, coastal areas, uplands and woodlands
competitive
scored against local priority targets to maximise environmental benefit

There are 3 main elements to the scheme:

Mid Tier
Higher Tier
Capital Works

Funding through CS also supports works to woodlands and includes:

Creation of new woodland
Improvement of existing woodland
Support of the preparation of Woodland Management Plans
Addressing tree and woodland health issues

Countryside Productivity

Woodland owners and forestry contractors can apply to the Rural Payments Agency (RPA) for the Countryside Productivity grant to improve forestry productivity.

The application can be for either:

a small grant of between &2,500 and &35,000, or
a large grant of between &35,000 and &1,000,000

Funding through Countryside Productivity can include funding for:

winches and associated equipment for extraction (including skyliners)
self-propelled wood chippers
tractor-mounted firewood processors
mobile saw benches or saw mills

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 and Countryside Stewardship applications for clients considering a wide variety of projects.

To find out more about the grant process and whether your business might be eligible for funding, contact Tom Heathcote 07918 628983 or email here

Further information can be found at https://www.gov.uk/government/publications/rdpe-growth-programme

Rural Intelligence at the touch of a button

Fisher German has just launched a new rural intelligence app, a project which we have been working on over the last year. The app brings together useful information and tools into one location to provide assistance and efficiency of a rural nature all under one app.

David Merton, Head of the Rural Sector, said “The Fisher German Rural sector is extremely excited about the release of its new app which has been produced in partnership with Cuttlefish, a web and app designer based at Loughborough. Cuttlefish have a great deal of experience in the building of apps of varying descriptions and are local to the Ashby office who have led the development; they were an excellent fit as our partner in this new and exciting venture.”

The app itself features news feeds from Fisher German, the BBC and Farmers Weekly, alongside an events calendar reporting significant rural dates and events as well as weather reports based on your current location.

The app will also feature practical agricultural commodity data and have functional converters for currency, weights and measures, together with useful information regarding Fisher German including office locations, a staff directory and rural publications such as the Fisher German magazine, Agri-View and Agri-Facts.

Finally, there is an interactive map with a hybrid function showing both the road network and a satellite view of the terrain which also has the locations of Fisher Germans offices marked on. It is possible to use this feature to ascertain local authority and location data for the users current location. There is a subscribe function which can be used to subscribe to email updates and push notifications on up and coming events and important dates.

Mike Reynolds, based in the the Ashby de la Zouch office, who has led the development of the app reports “the idea of an app was borne from the firms’ Rural away day during which a “Dragons Den” style challenge was set to members of the Rural sector in groups. The Rural app was the result of a collaboration of one particular group of which I was a member, the idea was held by the rural board to be of value and I was asked to take the project forward turning the concept into a reality.

I am excited to have worked on a project totally outside of the norm for a Rural Chartered Surveyor and am tremendously pleased with the result which brings together information useful to members of the rural community and related services, into one place for ease of use.”

For further information contact Mike Reynolds on 01530 410886 or email here