What is a typical crop roation in your area
Wheat, Wheat, Fallow, Break Crop, Wheat
Why is a crop roation used?
- Good for soils - Suppresses Weeds (blackgrass etc.) - Previously Greening requirement
What is a gross margin
Is a means of measuring the performance of a business enterprise. It takes into account the outputs and variable costs of the enterprise and produces a figure which can be compared with similar enterprises; known as benchmarking, or can be compared with results from previous years as a means of defining how well the enterprise is performing over time.
How do you manage blackgrass?
Late drilling, spring cropping, ploughing, break crops, fallow, high seed rates
How do you qualify for applying for BPS?
- You must actively farm the holding
- Must follow cross compliance (GAECS and SMRs) and greening rules
- By having at least 5 hectares and 5 entitlements
Can you talk me through how you apply for BPS?
Step 1 - Sign in / Sign up with the RPA
Step 2 - Check land and details are correct
Step 3 - Create new direct payments applicaiton
Step 4 - Generate application summary and check
Step 5 - Check Maps and submit an RLE1 for any changes
Step 6 - Enter the cropping for that year
Step 7 - Submit application
- Deadline is 15 May
- Submit the application online
- Require the customer reference number, single business identifier
What are the price of entitlements?
- 155 for sda
- 111 for non sda
- 40 for moor
Why would you use a CFA?
- Maintain active farmer status (CGT entrepreneurs, IHT APR & BPR, VAT trading business claim back VAT on standard rated supplies)
- Gain skills and knowledge from contractor
- Efficient use of land and buildings
- Incentive for contractor to improve results
- Average higher returns than from FBT
How do you transfer entitlements?
- Through completing an RLE1 form
What features are to be avoided when spreading slurry?
- Not spread within 10m from surface water or 50 m from bore hole or spring
What are the requirements of BPS?
- Cross compliance, active farmer, minimum 5ha and 5 entitlements
What is TB
- Infectious respiratory disease of cattle.
What do dairy farmers need to do?
- Get cattle periodically tested as instructed by the Animal and Plant Health Agency (APHA)
● Once a year if in high risk area
● Once a year or every six months if in an edge area
● Once every four years if in low risk area (Cambridgeshire)
What happens if you get a reactor
- A reactor - inconclusive skin test result at two consecutive tests
- Movement restrictions put in place
- Reactor has to be isolated – paddock used for isolation cannot then be used for 60 days
- Slaughter and post mortem examination of reactor
- Disinfect farm
- Retested in 60 days
What is Greening?
If you make a Basic Payment Scheme (BPS) claim, the greening rules are compulsory. Applicants that don’t follow them will lose some – or all – of their greening payment. The amount lost will depend on the level of non-compliance. In 2015, the maximum amount a farmer could lose if they don’t follow the rules is 30% of their total payment
What are the Methods of farming?
- In Hand
- Letting the land
- Contract Farming Agreement
- Share Farming
Why have a break crop
Break cycle of weeds, pest and diseases
Replace nutrients into the soil, nitrogen if using legumes
Aim to optimise yields and reduce need for fertiliser and sprays
Types / Variaties of Wheat
Hard wheats are better quality – flour
Soft wheats – better for biscuits
Einstein – milling wheat
Alchemy – feed wheat
Typical field operations in your area for a wheat crop?
For a Winter Wheat crop
- September - ploughing
- October - Cultivations and drilling or min till operations
- November - Weed and aphid control
- March - Fertiliser top-dressing
- April - Fertiliser top-dressing
- April - Weed control
- May - Weed and disease control
- June - Disease control
- August - Winter wheat harvesting
What is an acceptable moisture level for Wheat?
Needs to be 14.5% for wheat, above that and will either need drying or will face penalties when selling
What are the different soil types?
What are some Crop diseases?
When does BPS get phased out?
The last year of BPS will be 2027
What does DEFRA stand for?
The Department for the Environment Food and Rural Affairs.
What does NELMS stand for?
New Environmental Land Management Scheme
How long is the Agricultural Transition Period?
Seven years 2020 - 2027
What is the Farming Investment Fund
This will build on the current Countryside Productivity Scheme.
It will offer grants (likely to be 40%) for investment in items of equipment deemed to improve productivity. Like the CPS, there will be two tiers;
Farming Equipment and Technology Fund - a fixed rate of grant for specified items with application online.
Farming Transformation Fund - for high-value items or projects. A two stage process with an EOI and then full application.
The FIF is expected to open in rounds. The first is due in October 2021. The scheme will run until 2026.
What is the Sustainable Farming Incentive (SFI)?
This will be the ‘entry-level’ component of ELM.
SFI is a trial scheme to bridge the gap between BPS and NELMS and replace some of farmers BPS income.
What are the regulations for ploughing up permanent pasture?
An EIA is required if you would like to do anything to land which is uncultivated or semi-natural. Nothing to do with BPS/ RPA definitions of permanent grassland.
Uncultivated land is land that hasn’t been cultivated in the last 15 years by physical or chemical means.
Semi-natural land includes priority habitats, heritage or archaeological features or protected landscapes.
If either apply you must apply to Natural England for a screening decision to determine if an EIA is required.
What is Deemed Cost?
Deemed cost is arrived at by taking a percentage of the open market value of the animal as being equal to the cost of production. It is frequently used due to the difficulty of attributing forage costs to growing animals.
75% Crops and other livestock
Where does Greening not apply?
When do you NOT need an EIA to plough up semi-natural or uncultivated land (15 yrs)?
Where the field is under 2 Ha
What is a contract farming agreement?
An arrangement where the Landlowner supplies the Land and sometime buildings, the contractor supplies machinery and labour, typically they would split the profits in some way.
One one end the contractor may receive a fixed payment as happens in often informal situations.
Other times the contractor is exposed to the entire business risk and therefore takes more profit.
In between there are options which share the business risk between the parties including where contractors remuneration is related to his performance.
Why do a joint venture (CFA)?
Tax reasons - IHT reliefs still available
No involvement in the day-to-day farming activity
No need to invest in labour and machinery resources
Possibly better financial performance - economies of scale that the contractor can make use of - better prices etc..
Maintain trading status
Retains ability to claim BPS/Agri-environment
Freedom of contract
What is share farming?
Farmer and contractor combine their two separate businesses to produce a common output who’s gross receipts are divided between the parties
What are the four elements of funding currently available?
What are the Methods of Farming?
Letting the land
Joint Venture - Share Farming/ Contract Farming
What is NPK
Nitrogen, Phosphorus and Potash (K) - Fertilisers
What is a gross margin
A gross margin in an agricultural context is income less variable costs
Variaties of Barley?
What factors affect Yield
Pests / Deer
How many Acres in a Hectare?
Dairy breeds of cattle?
What are NVZ’s?
Nitrate Vulnerable Zones (NVZs) are areas designated as being at risk from agricultural nitrate pollution. They include about 55% of land in England. The Department for Environment, Food and Rural Affairs (Defra) reviews NVZs every 4 years to account for changes in nitrate concentrations. The current session is 2017 to 2020 an the NVZ rules are enforced by the EA.
Why do we do a stock taking valuation?
the reason for valuing stock at the end of an accounting period is to identify and carry forward those costs incurred before that date but which will not give rise to income until a later period. By carrying forward those costs they can be matched with the income when it arises. Profit will be understated if stock is not brought in.
What guidance would you base a stock taking valuation on?
RICS Guidance Note - Farm Stock Taking Valuations
DEFRA Helpsheet HS232 Farm stock valuation (2022)
What is the basis of value for a stock taking valuation?
Fair Value less Costs to Sell
Or Cost of Production (can also use deemed cost for this)
How do you calculated Fair Value less Costs to Sell
This can be calculated as value based on market transaction (if any) less costs such as Transport and Fees
What are the levels for Deemed Cost?
75% for crops, sheep and pigs and 60% for cattle
What is a future vs spot price
A spot price is the price here and now, a future or foward is where which you can agree a set price for a crop in say August/ September.
What is T1,2,3
Relates to Sprays and when they are applied based on the emergence of the crop
What are the cross compliance rules for BPS
GEAC - Good Agricultural and Environmental Conditions
eg - field margins, protecting TPO trees
SMR - Statuatory Mandatory Requirements
eg - ear tags for animals, NVZ’s
What are some issues facing UK Agriculture?
- BPS phase out
- Uncertainty about future payment
- Trade, issues with Lamb etc.
- Importing seasonal labour from other nations to pick veg/ fruit
What is Take All?
Take all is a disease found usually where Wheat is grown too many times in succession, it is a fungus so can treat with fungucide
What is an average Year for a Shepheard
Tupping in November, Lambing in April / May, then care of newborn and orphan lambs. Fattening store lambs for market, worming, fly spraying, weighing, shearing, dipping, dagging, regular checks are daily activities.
What is the current BPS payment?
£231 per ha
£93 per ac
What do you need to do when returning from Market?
lock down the farm, no in or out for 7 days when bringing back new stock
Required number for livestock traceability - DEFRA
What are the changes coming to BPS?
Agricultural Transition Period 2021 - 2027 and a decreasing level of farm support
Single Farming Incentives (SFI) Scheme
De-linking from 2024 onwards
Consulatation around Lump Sums from 2022 for retirement from farming
Also when are the reference years?
How will de-linking work?
It will be a payment annually - not linked to area, or farming to cover 2024 - 2027
The delinked payments reference amount will be the average BPS payments (including any young farmer payment or greening payment) made to your business for the BPS 2020, BPS 2021 and BPS 2022 scheme years.
When are BPS payments made?
Payments begin in December - most paid by Christmas
How many acres in a hectare?
What should be included in a tender document?
- Background (details on the farm etc. what the applicant is looking for)
- Details of the applicant
- Training and Qualifications
- References (professional and character)
- Current Farm (offer agent to visit and inspect, provide history of yields, gross margins, evidence of ability)
- Financial details
- Diversification (any current or proposed diversification)
- Budget (based on detailed costings)
- Rent offer (typically 50% of net profit from budget, could be higher if stronger demand in area)
What should be included in a contract farming agreement?
- 0 Farmers details (Bill Sykes, Green Farm, Luvington)
- 0 Contractor’s details (TBC)
- 0 Start date of Agreement
4.0 Term of Agreement
5.0 Review/Break Clauses of agreement
6.0 Farmer’s prior charge (rent equivalent) and date payable
7.0 Contractor’s fee and date payable
8.0 Divisible surplus split arrangements (if applicable)
9.0 Terms to be included in agreement eg: SPS, ELS, Professional fees
10.0 Farmer’s responsibilities eg: book keeping, accounts, SPS claims
11.0 Contractor’s responsibilities eg: cultivations, building repairs, etc.
12.0 Dispute Resolution procedures
13.0 Occupation Clauses eg: merely licence to enter and no tenancy to be
created by contractor.
14.0 Field/land Schedules to be included in agreement.
15.0 Gross Compliance Indemnity
16.0 Insurance Liabilities
17.0 Management prescriptions and requirements of any schemes.
Timetable for setting up a CFA?
Immediately – Construct a tender pack and advertise the availability of a CFA opportunity and invite tenders or expressions of interest from local contractors.
Jan – Feb – Interview and identify preferred contractor taking into account their current farming system. At the same time need to discuss likely financial implications of potential contractors in terms of contractor’s fees etc.
March – April – Negotiate final heads of terms for agreement and responsibilities. Sign agreements.
May – Sort out any bank accounts required and final details.
June/July/August – Both parties busy with harvest.
September – Commence agreement from bare stubble post harvest.
September – Consider dispersal sale of surplus equipment.
What are the Tax advantages of entering into a CFA?
- Assuming farmer is a sole trader/ partnership profits will be treated as trading income (not investment as if it were let)
- CFA allows landowner to retain farmer status, thus APR
- The assets held should also remain eligible for BPR, If he let the land and buildings his business would likely be held as a business comprising of investments which would not be eligible for BPR (McLewn 2008).
- The house may remain eligible for APR, unless decision making from the farmhouse stopped (Mckenna)
- If buildings in hand, any hope value would qualify for BPR
What does AIPZ stand for
Avian Influenza Prevention Zone
What does APHA stand for?
Animal and Plant Health Agency
When can you not cut a hedge?
1st March - 1st September
What does SINC stand for?
Site important for nature conservation