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Farming Insights – Post Brexit Funding

Farm funding

Jean Arnott-Glennie, our Farming and Estates Account Executive was recently invited to a seminar hosted by Shepherd & Wedderburn Solicitors where Scottish Cabinet Secretary for the Rural Economy & Connectivity, Fergus Ewing SNP MSP was the keynote speaker.

The discussion began with a reminder as to why the Common Agricultural Policy was originally set up under the Treaty of Rome 1957.

**The objectives of the Common Agricultural Policy were stated as:

  • To increase agricultural productivity by promoting technical progress and by ensuring the rational development of agricultural production and the optimum utilisation of the factors of production, in particular labour
  • To ensure a fair standard of living for the agricultural community, in particular by increasing the individual earnings of persons engaged in agriculture
  • To stabilise markets
  • To assure the availability of supplies
  • To ensure that supplies reach consumers at reasonable prices.

*** Michael Gove MP recently agreed that the current level of support to Agricultural Industry should be maintained until 2020.  He also suggested that the Agricultural Industry should only receive support payments if they agreed to protect the environment and enhance rural life; and that farm subsidies will have to be earned rather than just handed out in future.

The move is part of what he referred to as his vision for a “green Brexit”. Mr Gove described Brexit as “a once-in-a-lifetime opportunity to reform how we care for our land, our rivers and our seas, how we recast our ambition for our country’s environment, and the planet”.

This demonstrates a clear move away from food production and food security being at the top of the agenda. The suggestion being that more environmentally friendly activities should not just be rewarded but required, in order for future support being provided by the various government bodies.

Mr Ewing continued the discussion with looking at the steps that the Scottish Government had introduced since his tenure began including:

  • Retaining BSE free status for Scotland
  • Introducing 1st phase of the Beef Efficiency scheme
  • Women in Agriculture Conference
  • £10m Funding to Scotland Food & Drink Industry
  • £20m Funding to SRUC for advice services to the Agricultural community

He commented further that the Scottish Governments objective, put simply, was to drive forward Rural Development whilst protecting Environmental Concerns.

Also discussed during the seminar was the current split of EU funding within the UK home countries and the Scottish Government’s plans for this for the future.

An interesting Q&A session touched on food security in Scotland; Seasonal Labour supply post -Brexit; Devolved powers to Holyrood; The CAP IT system; How Support would be defined in the future and Penalties for infringements.

As is always the case when processes and systems are in the evolutionary stage, there were more questions than answers.  The future discussions between The Scottish Cabinet Secretary for the Rural Economy and the UK Government Environment Secretary will make for interesting reading and many further debates.

For further information please contact Jean Arnott-Glennie on 07881 093485 or  email [email protected]

Sources:

** https://publications.parliament.uk/pa/cm201011/cmselect/cmenvfru/671/67105.htm

*** http://www.bbc.co.uk/news/science-environment-40673559

Farming Insights – Harvest

It is safe to say it’s been a challenging season.  The mild winter resulted in little frost to kill off any malingering weeds and bugs. This was followed by a fantastically warm and dry spring and talk of an early harvest. However the 6 week drought impacted on the spring sown crops as well as the straw required for autumn livestock bedding.

As we headed into Agricultural Show season we faced rain and thunder storms. There was rain on St Swithin’s Day and true to form so far we have had the 40 days of rain that this predicts.

There is a saying that “Harvest will be when Harvest is”. The theory is that Mother Nature knows when we should be harvesting our crops for the autumn. In the 10 years I have been directly involved with day to day farming, the date that we start our spring crop harvest each year, has only varied by 7 -10 days – albeit that the silage crop start and finish date has fluctuated more with the changing weather and resultant grass quality and quantity.

Crops this year are, so far, looking reasonable. Those who were early with their sowing do not appear universally to have secured a premium yield, as the dry spell in the early spring resulted in slow germination in some locations – especially in sandy soils. Those who were later in sowing their crops appear to have attained higher yield and straw length than was previously predicted.

By the end of July AHDB reports that 50% of Winter Barley had been harvested alongside 27% of Winter Oil Seed Rape in Scotland. They further report that *“The better yields [9.5 t/ha] are tending to come from heavier soil types, whilst on lighter land, yields as low as 5.5 t/ha have been reported for the more water stressed crops”.

The AHDB Supply and Demand report ** noted at the end of July that the UK is forecast to be a net importer of wheat in 2016/17 and enters the new marketing season with a relatively lower level of stocks. They also forecast that Barley exports set to fall by 50% year on year, to the lowest level since 2012/13.  In addition the increase in Biofuel demand has increased the consumption of domestic maize this season.

However the annual steady increase in the demand for milling oats has continued.

What does this mean to the individual farmer? The lower stock of wheat being retained from last year means there may be a higher demand for purchase of wheat. This could affect the trading price in a positive direction, for those not already in contract. Those who are in contract, may see more leniency in terms of acceptability limits if the market price rises higher than the contracted premium per tonne.

Malting Barley export reductions possibly reflect the increased domestic demand for brewing and distilling and the call for “Scottish” ingredients for their geographically sensitive products.

 

 

The continued interest in renewable energy in the form of Anaerobic Digesters and Biomass/Biogas plants is resulting in higher use of maize and silage, rather than it being used in food production.

The Milling Oats Market seems still buoyant.  There are several types of interested purchasers for various manufacturing products and thus most quality standards of oats are being sold or contracted for purchase later in the season.

And once harvest is complete, the rush is on to prepare the land ready for the next crops to be sown – and so the cycle continues.

Sources:

ADHB (Agriculture and Horticulture Development Board)
*https://cereals.ahdb.org.uk/markets/market-news/2017/july/21/gb-harvest-progress-2017-report-1.aspx
**https://cereals.ahdb.org.uk/media/1257945/21-June-UK-cereals-SD-final.pdf

Farming Insights – Behind the scenes at Harvest

At this time of year, the consensus of opinion seems to be that all farmers are either busy with combine harvesters in the fields or avidly watching the weather forecast for signs of a dry spell to allow them to continue.  However it is worth thinking about other activities that are taking place behind the scenes on many farms.

These days, farmers may have secondary jobs to supplement their agricultural income. This can bring other stresses to a demanding schedule. Balancing farm work, their paid employment and home-life can be trying so team work is vital.

Long days and long nights can lead to unnecessary mishaps on farms and historically there can be more insurance claims for accidents, impact incidents and machinery fires. On occasions time pressures and tiredness can get in the way but taking the extra care to make sure that equipment is cleaned down after every use is important.

September is traditionally when many sheep farmers are looking forward to the tupping season with the purchase of new breeding stock. There have recently been some record monies changing hands at the various ram sales throughout the country. The ewes need to be in the best condition ready to receive the tups so this means culling out old stock and providing new pasture for those that are being kept for future breeding.  At the same time, this year’s lambs are now being sold – either for slaughter for the early lambs or as store lambs for over-wintering.

Autumn calving is now well underway. The introduction of calving monitors to alert the farmer when a cow goes into labour helps avoid many sleepless nights allowing other seasonal work to continue around the calving.

Besides the harvesting of the crops, there is the preparation of the fields ready for the next planting. For some businesses this will be a further sowing of spring crops but for others this can be Winter Wheat or Winter Oil Seed Rape.  Both need to be in the ground as soon as the harvest is completed. This means cutting the crop, the baling of straw and clearing off the field then ploughing and levelling the soil before the new seed can be sown. With the introduction of the 3 crop rule many farmers now have to consider crops other than barley in order to comply with the current CAP regulations.

Agriculture has always been a weather dependent industry even more so at this time of year.  It is important to remember all the other activities, aside from the actual harvest, that take place in order to put food on our tables.

Should you wish to discuss any aspect of your insurance cover or book an appointment for a free insurance audit, please email [email protected] or call 0131 553 2293

Farming Insights – August 2016

Since the last edition of Farming Insights, we have had one of the wettest summers in recent history along with Brexit, the Agricultural Show season and still more rain!

In previous years, silage work has started by the end of May in the North East of Scotland. Due to the weather this year, as in 2015, many farmers had to postpone their grass work till mid July. There was decent sun during May and June but not enough or for long enough to reap the benefits at that time.

In June, at the same time as the Royal Highland Show, we had the Referendum and the resultant Brexit decision. At the time of the vote, many farmers were still waiting for the last instalment of their 2015 Farm Subsidy Payment. By the 30th June, the majority of Scottish farmers had received the full balance and it is good to see that the Westminster Government have now provided confirmation that the Farming Support will continue until 2020. Another benefit of the vote to leave the EU albeit possibly unintended, is the change in the exchange rate has resulted in an increase in the commodity trading price for lamb. The debate by the EU on the banning of Glycosphate was also scheduled for the 23rd June.  However, due to more pressing matters on that day this was postponed for 18 months – giving a stay of execution for many land owners and farmers, as there is currently no alternative readily available to control invasive weeds.

The Farm & Estates team have been extremely busy attending local shows over the summer. We exhibited at the RNAS Countryside Live in May, New Deer and Border Union Shows in July and Turriff Show in August. These shows allow our staff to meet with existing and new customers and discuss a variety of insurance needs face to face. It is great to see a continued effort by both exhibitors and visitors supporting their local shows.

Despite intermittent heavy rain and thunderstorms during August, the temperature has at last, started to rise. There still hasn’t been enough sun in many areas to provide an increased yield in the winter crops but they are looking better than had been predicted earlier in the season. The spring crops are starting to bulk out but the start of harvest may be later than ideal in some regions.

The fodder crops are finally being cut and quality seems to vary from average to good. One of the main issues, besides the variable crop quality, is with the softness of the ground for access to the fields by machinery for crop treatments. For those with livestock grazing outside, the grass quality and the wet ground conditions have resulted in some stock already being brought indoors for the winter – some 2 months ahead of the norm.

These are just some examples of how resilient and flexible the farming community has to be. Pragmatism becomes second nature as whatever the weather or the economic climate produces, farmers need to adapt their plans to accommodate. After all if we want food security, we need farming!

For further information please contact our Farms and Estates Account Executive  

Jean Arnott-Glennie at [email protected] 

Farming Insights – Lambing

This month’s edition concentrates on the reality of the Lambing Season which many of our land based clients have recently experienced.

The majority of people outside of the farming community do not have an understanding of just how tiring and unrelenting lambing can be. We have the have highs as well as lows but unlike at Harvest time, (or the tennis), bad weather does not stop play and we have certainly had our share of bad weather again this year!

One farmer I visited recently had just finished lambing. He had 700 ewes to lamb and had 2 extra pairs of hands for the season.  They lambed 600 ewes in 10 days. This means that between the 4 of them, they were each lambing 15 ewes every day.

The lambing itself is usually quite straight forward. Yes, we can get breach births, triplets, still births and ones where intervention is required but these will hopefully be in the minority. The real skill that shepherds have is to keep them alive after that:

  • Checking the ewe has enough milk to feed her lambs
  • Bottle feeding those that aren’t getting sufficient from their mums or are orphaned
  • Feeding and bedding the individual sheep pens until the lambs and ewes are bonded and strong enough to go to pasture
  • Feeding the sheep once they are outside and making sure the water troughs are kept topped up
  • Checking the fields daily for any lambs that are not thriving, due to lack of milk or the cold weather
  • Dealing with any lambs that have been caught in the snow or wind and have to be brought back inside in order to survive. They are treated with glucose, milk and heat-lamps
  • Completing movement records when sheep have been moved out to pasture
  • Tagging new lambs and re-tagging ewes who have damaged their electronic ear tags
  • Injecting any livestock who are showing signs of illness
  • Rotating the flock to different fields to ensure that there is always enough grass for them to eat (not easy when the snow and cold wind/ wet have played havoc with growing potential of grass).

It’s at this stage that the value of correct insurance cover can come into its own.

  • The value of the Livestock on farm will be at its highest, post-lambing and the sums insured should reflect this
  • There will be more frequent journeys, moving sheep to different pastures. This is sometimes by float but can be on foot and if this involves the crossing of a main road having extra people on either side to warn oncoming cars is essential.
  • Theft of ewes and lambs does happen and farmers should be aware of the risks and try to mitigate any exposure they may have. Likewise the loss of lambs by vermin and by worrying can occur. While many farmers do not claim on insurance for an individual loss, if these incidents are on a larger scale, a discussion with your insurance broker can often put minds at ease.
  • By the end of the lambing season, exhaustion has set in and this can lead to more on-farm accidents, both by the farmer and seasonal staff. Ensuring that the farm’s liability insurance is up to date and that any temporary staff have the correct level of training to operate machinery and implements, including quad bikes is essential.
  • Extra staff often mean extra accommodation and extra wages at a time where money can be scarce. It is important that the right level of support is there for the farmers at this busy time.

Jean Arnott-Glennie from our Farm & Estates Team took time off from insurance last month to help with the lambing at the family farm in Aberdeenshire.

We hope that this is useful and as always, should you wish further advice on anything within our Farming Insights or insurance matters please do not hesitate to contact us on [email protected].

Farming Insights – Metal theft

In this edition of Farming Insights we consider the all too common issue of metal theft.

Despite the clampdown on regulations within the scrap metal industry, there is still a market for stolen goods; with an estimated 1,000 metal thefts occurring in the UK every week.  These thefts equate to almost 300 tonnes of metal or 300 cars. **

Metal materials are being stolen from various types of locations with rural and agricultural businesses included within those regularly at risk.

To most people, metal items are purchased for a specific use but to a thief, it is viewed simply as a recyclable product. On a farm it is not always easy to secure items when not in use but a little forethought can go a long way.

  • 4×4 vehicles are at risk due to their high ground clearance making it easier to remove the catalytic convertor – a common theft. Parking a vehicle with a lower ground clearance in front of the jeep can make access more difficult.
  • Theft of agricultural vehicle attachments is also common so it is recommended to consider where these are being left when detached from the tractor. Don’t leave them away from the main farm buildings in full view for opportunists. These items should be marked with security marking products so if stolen and recovered they can link the thief to the crime.
  • Always take a note of any unusual vehicles or people on the farm. Report any sightings to the police and tell your neighbours. Use social media to alert friends and neighbours.
  • Take a moment to review security at the farm yard. Although many farmers do not have or want perimeter security fencing, make sure that there is good outside lighting. PIR movement activated lighting can be a great deterrent.
  • Keeping the height of hedging to around 1 metre could be considered. This can provide good visibility over much of the farm and entrance routes.
  • If you have CCTV installed, make sure that there are no tree branches or spring hedge growth that may obscure the cameras. These could unintentionally create blind spots. Display signs to say CCTV is in operation is an added disincentive.
  • Maintenance of any security arrangements is as important and a quick walk round on a regular basis to ensure there is no damage to fencing or gates and that lights are all functioning properly is encouraged. Remember to check that any recording cameras have not been interfered with.

Wherever metal is used or stored, there is a risk of it being stolen. The most important thing is to be aware.

We hope that this is useful and as always should you wish further advice on anything within our Farming Insights or insurance matters please do not hesitate to contact us on [email protected]. Or follow us @BSIBFarmEstates

(** source – Scottish Business Resilience Centre)

 

Farming Insights – Is Spring in Sight?

It seems as if the worst that the Scottish winter can throw at us, might be behind us; and with the lengthening days, farmers are keen to start their spring crop work. Sodden ground is still an issue in many areas, making ploughing conditions difficult with only the lightest of soil being accessible at this stage.

Over the winter months, when the weather has been either too wet or too cold to work outside in the evenings, there have been some very well made television programmes and events to keep us all informed and entertained.

  • The Mart, featuring Aberdeen & Northern Mart in Thainstone, Inverurie has been a great success in showcasing all that goes on before and during the livestock sales. It also makes the valid point that the farmer can only sell their livestock once and the money made, is the equivalent to their annual salary!
  • Another, more gritty programme was “Addicted to Sheep”. This showcased a year in the life of a North of England hill sheep farmer and again has been very well received as being a true portrayal of the highs and lows within the farming calendar.
  • There have been the usual round of Seminars, AGM’s, Workshops, Agricultural Shows and Conferences; all designed to showcase particular products, processes and new innovations. Many of these give the farmer the opportunity to consider what else is out there and how they may be able to improve productivity and efficiency and reduce overheads – whether that be on the quality of their fodder crops, ewe conditioning or arable contracts.

But back to the matter in hand. Calving and lambing will be starting on many farms in the next few weeks, if not already. The livestock do not care what the ground conditions are like or if it is raining, snowing or bright sunshine. Along with this comes extra hours of livestock monitoring and animal husbandry. There will shortly be a lot more tired farmers trying to do their best under what can be very trying conditions.  Then the sun shines and the young stock are all healthy. The lambs are gambolling in the fields and all is right with the world – at least for that moment!

Farming Insights – January’s legacy

Hopefully by now, most of the flooding caused in Scotland and the North of England has now subsided sufficiently to allow the clean up to be underway within the many properties we saw damaged during the recent storms.

There have been numerous reports of damage in all areas: from properties being underwater following the rivers bursting their banks; to access bridges and driveways being swept away in the torrents and everything in between.

The need for a responsive insurer has been put to the test many times already in 2016 and we’re only a month in! Insurance Companies, Brokers and Loss Adjusters alike have worked tirelessly to ensure that the right level of support was there for those who needed it.  They have organised temporary accommodation for those who had to be evacuated and arranged out of hours and emergency contact responses during the height of the storms and this service is ongoing.

However, many of the losses and damage suffered are not part of an insurance cover:

  • There have been many cases of fencing being washed away when the fields themselves flooded. Farmers were able to move their livestock to drier ground or to indoor housing in the main but it will be some time yet until the ground is hard enough to allow vehicle access to repair the fencing to allow stock to be returned.
  • In some cases, the flood water has been contaminated and there is a risk to the ground of pollutants and this will need to be checked before livestock re-enter as well.
  • Those farmers with winter crops sown will be watching their plants closely for signs of drowning. Young seedlings that are exposed to such high quantities of sitting water for a prolonged time are at risk of drowning if they cannot obtain the nutrients and oxygen from the soil and this will undoubtedly affect yield at harvest time.
  • In some locations, fields that have not yet been sown have had the top soil washed away – such was the force of the water gushing through them.
  • Recovery of fodder bales that were taken downstream from what should have been a safe distance from the rivers, will also take some time. Aside from the access issues, the sheer weight of these bales, now that they have been submerged makes it a very difficult proposition.

The task of cleaning up after such a deluge will take time, money and some drier weather!

Farming Insights – Winter Storms

Farmers, business owners and householders are totting up the cost of the devastation caused throughout Scotland in the wake of the storms over the last few weeks.

There have been numerous examples of charitable actions, neighbourly and friendly acts of kindness and communities working together to prevent damage from the flood waters and rivers that have burst their banks.

  • The Scottish Borders was one of the worst hit areas but Scottish Borders Council were able to give adequate warning and most businesses and households were reasonably well prepared. One large motor trader had approx. 2 ft of water in their premises. They had removed all cars from the ‘at-risk’ area as well as moving all transportable contents to a safe area of the premises. Obviously there was some damage to the premises but due to their quick actions the cost is likely to be only a tenth of that incurred about 10 years ago. Insurance staff called in at the peak of the flooding to make sure they were coping. There is no doubt that local knowledge and service were of paramount importance in ensuring prompt attention to the issues.
  • In the Northeast, shops took emergency clothing & supplies to the rescue centre for victims of the flooding; hotels provided hot food and dry rooms to rest in and the retained fire brigade worked throughout the night to minimise losses and evacuate those from houses which had been breached.
  • Where debris has been washed down the river, farmers were out with their machines to clear blockages from the bridges to let water continue flowing and used the same vehicles to rescue stranded motorists who had been caught by the ferocity of the water’s force.
  • People with empty properties have been in touch to offer accommodation to those who may need it.
  • Likewise, offers of available livestock housing have been made for those who may need to relocate cattle.
  • Local residents worked through the night to dig trenches to divert water flow from houses with many not affected lending a hand; assisting elderly neighbours and friends to protect their properties and were back again the next day to help with the clear up.
  • Social Media has been very effective in updating local communities – informing of road closures and what was happening within each area; especially when the local radio stations were directly affected by the flooding and had to come off air!

All of the above illustrate just some of the examples of how rural communities can work together in a crisis to the benefit of all and these actions should be applauded.

Any comments or questions?  Please contact Jean Arnott-Glennie on 07881 093485 or email [email protected]

Farming Insights – Christmas 2015

With Christmas just around the corner and families everywhere starting to prepare for the festivities, it is worth taking a moment to consider the farming community. For livestock and dairy farmers, there is no day off work, just because it is holiday season. Many of us wish for a “White Christmas” but even if there is no snow on the ground, the livestock still need to tended, sheep and cattle fed and the dairy industry keeps milking.

Inclement Weather

  • If the weather is bad, then quite simply, the jobs take longer
  • Frozen pipes need to be defrosted to get water to the animals
  • Livestock, whether housed or in the fields, will need feed
  • If there are pedigree ewes, then lambing season is about to begin
  • Add to this, fields becoming saturated by the melting snow will be a real worry for farmers sowing spring crops in the New Year
  • Winter crops can also suffer, with the plant roots drowning in the sitting water and the hoped-for income the following harvest being washed away before their eyes

Shorter days

  • There are fewer daylight hours to carry out routine jobs, maintenance or repairs
  • Farmers are working in atrocious weather, icy winds, driving rain or snow
  • Unlike the general public, they can’t just stop when the weather turns nasty – they still have to continue with their most important job of feeding the nation

Depressed Prices

  • Wheat and barley prices are at a low, milk quotas were removed earlier in the year
  • Prices being paid for beef, sheep and pork are falling weekly
  • There is no firm date set for receiving the Single Farm Payment – normally paid in December
  • With this in mind, is it any wonder that farmers often do not feel like celebrating?

Welcome Break

  • The winter months also afford the opportunity for those involved in the land to attend various seminars and winter shows and to hear what’s new within the sector, both locally and nationally
  • The main topics being discussed were current legislation proposals, including
    • the Land Reform Act
    • Agricultural Holdings Legislation
    • the Wildlife Protection Laws
    • Buying Systems used in other parts of the country

Such events allow a welcome break and provide an opportunity to meet with others.

Farming can be an isolated way of life at best and at this time of year especially, there may not much to smile about. Charities such as RSABI and Gatepost have recognised the situation within the agricultural sector and are there to help and support where and when they can.

With all of this in mind, we wish you a Happy Christmas and although things may not always be merry and bright, we hope the New Year brings some respite to the current situation.

Any comments or questions?  Please contact Jean Arnott-Glennie on 07881 093485 or email [email protected]