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Large dairy farms can profit from Brexit

Rob Hitch, of Dodd and Co Accountants, said Brexit may mean more land was available for dairy farmers to take on and use to expand their businesses

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Large dairy farms can profit from Brexit

Larger dairy farms are set to prosper post-Brexit as a result of potential lower rents and some cost savings.

 

Rob Hitch, of Dodd and Co Accountants, speaking at the recent Royal Association of British Dairy Farmers business and policy conference in Westminster, said the change in subsidy payments could mean some beef and sheep units, which currently heavily rely on Basic Payments, could be forced out of business.

 

Rent

 

This, he said, would have an impact on rent prices, meaning more land would become available for dairy farmers to take on and use to expand their businesses.

He said: “I cannot see rents staying anywhere near their current levels in the future and I expect a lot of lowland to come available.”

 

Smaller farms, with less than 100 cows, would also be at risk post-Brexit, as they are currently more reliant on income from subsidy and environmental payments.

 

He added there would potentially be other benefits post-Brexit, including cost savings to be made on variable costs associated with seed and spray costs and also the potential of cheaper fertiliser from Russia.

 

Wages

 

However, he added a note of caution in terms of labour requirements on larger dairy units. With the current heavy reliance on an eastern European workforce, Mr Hitch said he predicted there would need to be a 25 per cent increase in wages to comply with future visa regulations.

 

“Dairy farmers will need to pay upwards of £12-£15 an hour to hit the £30,000 threshold for a 48-hour working week, which looks like being set in order to comply with visa regulations.

 

“The larger units will definitely feel this and it will have an impact on the bottom line of the business.”

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