New survey shows many farms will struggle without support payments but there is determination to "find opportunities among the challenges"

Commissioned by land and property specialist GSC Grays, the survey of more than 150 farms found that fewer than half (49 per cent) of farmers did not think their business would be profitable without the Basic Payment, while a further 20 per cent said they were not sure whether they could turn a profit without it.

Guy Coggrave, managing director of GSC Grays, said: “It’s very concerning that nearly half of farmers don’t expect to make money without support payments, and one in five do not know what their bottom line looks like without subsidy.”

The EU Basic Payment System (BPS) is the subsidy scheme which will be replaced by the new Environment Land Management Scheme (ELMS).

Part of the Agriculture Bill which returns to the House of Commons today, for final debate before becoming law, ELMS will see farmers paid ‘public money for public goods’. These include measures which protect the environment, water quality, carbon capture and animal welfare. The BPS will be phased out over the next seven years.

But, while there were concerns about future payments, Mr Coggrave said the survey showed “positive signs”, with many respondents, particularly young farmers, optimistic and “determined to find opportunities amongst the current challenges”.

According to the figures, some 61 per cent had considered expanding their businesses and 62 per cent had looked at taking on more land. However, a large proportion (66 per cent) said land prices were unsustainable.

The survey also addressed the pandemic and its impact on the sector. It showed that while 34 per cent thought there had been a negative effect on their business, 29 per cent of the respondents – rising to 50 per cent among the 20 to 30 age group – thought the pandemic would bring opportunities, with direct sales and increased markets for local food being cited as potential areas of growth.

Interest in diversification was also high, with almost three quarters (72 per cent) of respondents already involved in some form of diversification and 36 per cent of those who had not yet diversified saying they would like to do so.

Mr Coggrave said the most popular forms of diversification being considered were around leisure and tourism, which he thought may have been “buoyed” by a summer of ‘staycations’.

“Our survey results show that farmers are acutely aware of the challenges ahead, but there is still an appetite for growth and pursuing new ventures,” he said.

“Our concern is that the immediate pressures of a poor harvest and cashflow issues are understandably taking priority over longer-term business planning: 52 per cent of farmers surveyed do not have a plan for retirement or succession.

“To build resilience and prepare for the turbulent period that will follow the UK’s exit from the European Union, it’s vital farmers have a clear, detailed understanding of how industry-wide changes will impact their individual business.

“Knowing their strengths and weakness will help them to plan their next steps, whether that’s diversifying, scaling back or bringing the next generation into the business.”

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