Is there a future for the small family farm in the UK?

This from the Prince’s Countryside Fund (July 7 2016):

A major new independent study¹ commissioned by The Prince’s Countryside Fund into the future of small family farms across the UK, has revealed a steep decline in numbers since the beginning of the century.

Over the last two or three decades, small family farms have experienced profound change. The report set out to explore the future for these farms by identifying the pace of change, investigating ways in which they might improve performance and viability as well as putting forward proposals for improvements to farm management, adjusting policies and bringing in new blood.

Overseen by Professor Michael Winter, a rural policy specialist and rural social scientist at the University of Exeter, the report revealed a complex pattern of change with the number of farms declining by half and showed many smaller farms had been consolidated into expanding larger farms.

One of the largest risks was identified as farm succession. Without the correct retirement planning and restructuring in place, it is claimed it will make it more difficult for the ‘older generation to step back’, yet it confirms that the ‘most profitable farms are those most likely to have a successor, regardless of size’.

With significant agricultural pressures including volatility in milk, beef and lamb prices and weak export trade and domestic demand, the study notes that there is ‘not necessarily a future for all small family farms’ but that not all of these businesses require a sizeable profit. Furthermore, top performing small family farms are found to be as efficient as many larger farms.

Powerful economic forces have continued to drive change in farm size structures and Britain’s family farms continue to face the ‘agricultural treadmill’ – meaning ever larger volumes of outputs are needed just to ‘stand still in net income terms’. In addition, the Basic Payment Scheme contributes over 100% of farm business income on most small mixed farms, highlighting how vulnerable they could be to a significant reduction, or loss, of this payment.

Lord Curry, chairman of The Prince’s Countryside Fund said: “There is a limit to which small farms can resist the constant pressures being put on them and their resolve is being continually tested. There has been very little research done in recent years into this sector, so I am hopeful that Professor Winter’s recommendations will provide a new catalyst for action to ensure we have a thriving sector for the years ahead.”

In a bid to respond to contemporary challenges and identify ways to increase the viability of family farming, the report proposes a series of 17 recommendations which include:

  • Improvements to farm management and performance to enhance resilience of the small farm such as greater financial management, technical knowledge, market knowledge and social/emotional intelligence and awareness.
  • A need to upskill the agricultural sector through targeted advice and training as well as encouraging farmers to take an active role in sharing best practice and analyse success.
  • Improve economic resilience by shortening the supply chain and increasing profits.
  • Introduce and develop initiatives to encourage new blood into agriculture and see succession planning as an investment into the future of their business and family.

Claire Saunders, director of The Prince’s Countryside Fund said: “It has been heartening to learn from the report how innovative many small farms are, and the positive contribution that they continue to make to the rural landscape with strong social, community and economic benefits. Support is needed now to retain viable enterprises and to encourage the next generation into farming. The Prince’s Countryside Fund is developing new initiatives to support these businesses and help those who live and work in the countryside.”

Report co-author Professor Michael Winter said that “official figures on change in farm numbers and farm size structure only tell part of the story. Our own research points to a much more complex and nuanced pattern of business growth, decline, exit and new farm start-ups, as well as the occupancy of land under a range of informal and unconventional arrangements.”

Report co-author Professor Matt Lobley added: “Surviving in the short term can be tough enough but the longer term survival of small family farms can be jeopardised by a lack of succession planning and provision for retirement. It is vitally important to ensure a dignified retirement for elderly farmers alongside active planning for succession.”

The Prince’s Countryside Fund, which earlier this month announced over £550,000 of funding support for inspiring rural initiatives through its grant giving programme, will be announcing details of a new rural support programme at the end of July.

*Recommendations for farmers and farm businesses to become more resilient

  1. Adopt lifelong learning through regularly accessing advice, support and information to help inform business decisions.
  2. Develop good management and technical skills to assist with the effective day to day management of a successful farm business.
  3. Develop and implement a plan for succession and/or retirement from farming.
  4. Collaborate with other farmers and supply chain partners, including developing local networks, peer support relationships and business opportunities.
  5. If appropriate, and after full market research and business advice, introduce new enterprises to diversify farm business income.

Recommendations for the agricultural sector to support small family farms

  1. The formation of a task force to carry out further examination of variable performance in agriculture with the aim of providing further evidence on the causes of variable farm business performance and the factors that help improve performance.
  2. Develop a concordat between the various professional bodies who give advice to famers with a view to developing a common protocol for cross-referral and communication strategy about the range of advice and support available.
  3. The Farming Help Charities in conjunction with The Prince’s Countryside Fund and other helping agencies should identify and equip individuals within farming areas to act as ‘catalysts’, guiding farmers to the information and support they need and assisting them in this process.
  4. Catalysts should be encouraged to establish a ‘good farming neighbours’ system to allow farmer to farmer peer group support, learning from other mentoring schemes.
  5. Rural estates should encourage the creation of opportunities for new farm businesses by investing in the provision of new housing for existing tenants to facilitate new entrants.
  6. Rural estates should be encouraged to take a lead in assisting new entrants through either FBTs or share farming arrangements.
  7. Rural estates should be encouraged to raise the minimum term for Farm Business Tenancies to 10 years to help strengthen farm businesses and encourage longer-term planning and investment with a view to policy change.

Recommendations for policy makers

  1. Utilise a more flexible approach to encourage new entrants into farming through share farming arrangements and Farm Business Tenancies.
  2. Consideration should be given in planning policy to allow farmers of retirement age to build a retirement house when they agree to facilitate new entrants through FBTs, share farming or land purchase.
  3. Greater investment through rural development funding into farming entrance schemes such as Fresh Start Academies and the Fresh Start Land Enterprise matching service.
  4. Discussions should be held to establish what opportunities can be addressed through adjustments to tax reliefs currently available with the specific need to attract new entrants into farming.
  5. Promoters of Short Supply Chains and added value (such as social enterprises, local authorities and rural development schemes) should make engagement with small family farmers a strategic priority.

Research analysis

¹This research took place between November 2015 and May 2016, and relied for the most part on the use of research completed or already underway, as well as the use of existing data sets to throw light on the small farm question. This combination of methods and sources comprised a literature review; specially commissioned analysis of Farm Business Survey Data; analysis of a 2016 postal survey of 1,251 farmers in South West England (The SW Farm Survey); a detailed case study of land occupancy change in a single West Country parish since 1941; key interviews with seven agricultural sector experts; a workshop attended by 17 farmers and other experts, held in May 2016; and 21 responses to a call for evidence.

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