Brexit impels Welsh farmers to evaluate their businesses and prepare them for the future, says the Central Association of Agricultural Valuers (CAAV).
Now is the time to look change in the eye, ahead of the impending Brexit outcome and the following changes to the agricultural payments system, according to Jeremy Moody, secretary and adviser to the CAAV. Speaking at a Farming Connect meeting in Llandysul, Ceredigion, on 4 November, Mr Moody stressed the importance of assessing all options for the farm and looking at external pressures and internal issues.
Welsh farmers can expect to see BPS phased out between 2022 and 2025, he said. “There is an outline proposal for a single Sustainable Farming Scheme, which will combine land management and public goods, improved economic resilience and productivity. Additionally, entry will be based on an initial farm review.
“Though the details of the future policy are not yet set in stone, there’s plenty farmers can do now to plan ahead,” he added.
Farmers wanting to improve their profits should watch margin. “Watch the net margin, not the gross cash flow,” advised Mr Moody.
“Take stock of where the business is now, and where the family is. Ask where you want to be in 10 years and how you could get there? What strengths and weaknesses there are and what outside pressures are prevalent? This will help to highlight what steps can be taken to make improvements.”
Adopting new machinery and technological innovation is also a large part of the process towards profitable farming. “However, farmers might want to assess if they actually have too much machinery, and whether there’s ways to cut back or machinery share to cut costs,” he added.
However, restructuring a business had tax consequences. “Essentially, tax reliefs are more benign that they were or are perhaps likely to be in future,” said Mr Moody. “Farmers can claim up to 100% Agricultural Property Relief, full Business Property Relief, have no tax on lifetime gifts and claim Entrepreneurs’ Relief. Delays might see this change.”
Opening up land occupation to the proficient can get the very best out of it and so enable profitable farming enterprises he explained. “It’s not about challenging ownership, but about finding the best occupation and use the land is suited to. Letting land may offer a better and more secure income than continuing to farm if your heart is not in it. Existing landlords and tenants need to work together to maximise prospects between them
“It is time to understand the issues, making and then implementing decisions, but it’s important to seek advice from experts,” stressed Mr Moody. “As the Welsh Government has stated, advice should be seen as an investment in a farm. A good adviser should not only bring knowledge, insights and a wider view but be a safe and trusted challenger.
“The challenges may seem an intimidating prospect, but the resulting outcomes can see struggling farms completely turned around to profitable, growing businesses.”
Mr Moody will be speaking a further events, held on 7 and 12 November in Conwy and Powys.
Events are free of charge, but attendees must be registered with Farming Connect and Rural Payments Wales and it is essential to book.
To book your place, contact Delyth Evans: [email protected] / 01970 600176
