Duncan and Toplis’ Mark Chatterton gave his advice on Brexit proofing the business.
Politicians might be taking their time with making key Brexit decisions, but farm businesses needed to start taking steps now to get their businesses ready for Brexit.
Mark Chatterton, head of agriculture at Duncan and Toplis, urged farmers to prepare for ‘every possible Brexit as we edge nearer to March 29 2019.
All indications from the Government suggest that farmers cannot rely on the current subsidy system beyond any Brexit transition period. That transition could last five years, but the change, when it comes, will be dramatic.
For many farms, the Basic Payment is the only thing keeping them in profit, even in the good years. To maintain this net profit in a future of reduced subsidies, you will either need to increase income from other sources or bring down your costs.
Look at your recent accounts and pull out two figures; the total Basic Payment you received that year and your net profit. Now run some calculations: if you halved the Basic Payment figure, what impact would this have on your net profit? If the answer isn’t good, take steps now to fix the problem.
The end of the current subsidy payment means farms will have to look to other income streams to plug the gap. The good news is that almost every farming business could be exploiting more of the assets on their farm than they currently are.
The options available to you will depend on your location, your landscape, existing buildings and the expertise and experience of the family and workforce involved.
Diversifying into free range livestock, renting out unused fields, renovating property or even moving into agricultural consultancy are just some of the examples I’ve come across recently. Seek professional advice if you’re unsure of where to start.
Every day we research grants, scholarships and bursaries available to UK farmers and rural communities.
This is the place to find all you need to know about the schemes available under the new CAP - and much more. To start searching for funding available to you, use the location, type and age filters above. For guidance on how the Grant Checker works, click on the video below.
Review your labour and machinery costs ahead of expected Brexit subsidy cuts. Do you need to buy that expensive tractor, sprayer, baler or combine right now, or could you consider using external contractors instead?
It pays to do your sums on depreciation and repairs against the cost of using contractors - cost up every operation on your farm in this way.
If you still need that purchase then there are lots of other options out there besides cash purchases, including contract hire, leasing, loans, asset and invoice finance. Speak to your business advisor for the latest options.
Farmers Guardian and FarmBuyer work together to offer our members fantastic discounts on farming-related products and services.
In the past, our members have saved up to 40% on their farm electricity bills, up to 5ppl on fuel, up to 25% on wearing parts, and up to 15% on hundreds of lambing essentials and winter housing products.
Offers are often seasonal, meaning we can bring you exactly what you need, when you need it. FarmBuyer can even deliver some items the next day.
Brexit can be the catalyst for change when it comes to passing on the family farm and making your business more resilient to withstand a post-subsidy world.
Make sure your business has its asset ownership in the right place. Right now there is a limited time window for farmers to get a subsidy boost while it is still guaranteed, and there’s more money available now than there might be in a few years’ time.
Businesses can do this through restructuring, with older generations passing things down at the time of their choosing so they have a secure retirement package from the business while there’s still some subsidy income around. In turn, younger generations get to step up, bringing their own new ideas to the fore.
Our Legal Helpdesk gives members access to free legal advice with a specialist rural business solicitor.
Open to Farmers Guardian VIP+ and Arable Pro members in England and Wales, the service provides 30 minutes of free legal advice with every query.