An uncertain future ahead for farm businesses

Crystal balls are probably higher on the wishlist of everyone involved in Scottish agriculture for this Christmas than they have been for many years.

Despite the oft-repeated mantra, Brexit-means-Brexit, the reality is that farming businesses have no real picture of what the future holds in terms of access to markets or support schemes.

It seems that in the final month of 2016, the only certainty we can predict is uncertainty! In reality, and I do not wish to be too ‘glass-half-empty’, what we can be sure of is that the level of support – in direct payments from government to farmers – will change and there is every chance that the overall value of support will decline.

One thing which seems certain is that the Westminster Government, post Brexit, will take a long hard look at how the money which it had previously been obliged to pay into the CAP pot is allocated.

In truth, this process was started long before Brexit, with politicians distancing themselves from direct subsidies for agricultural activities and suggesting moves towards payments for environmental benefits.

I visited Brussels earlier this year (prior to the vote on Brexit), where it was evident that policy advisers in Europe are having the same thoughts; with connectivity to the urban population being a key issue. This may be some conciliation, in that if future support here is less linked to agriculture, we may not be as disadvantaged in comparison to our EU neighbours as some originally feared, with their support heading in the same direction.

In Scotland, we appreciate that 75% of our land mass is marginal in terms of productive agriculture. It is incredibly important for those who farm this land to secure future support. We must hope that governments, at both UK and Scottish level, also recognise this importance.

However future budgets, even of support directed at environmental measures or delivery of ‘public-goods’ are also likely to feel the pinch, with other government departments (eg health, education etc) vying for a share. In the post-Brexit era farmers will likely have to focus their subsidy-seeking business brains on the delivery of outcomes demanded by the UK taxpayer.

We predict that such ‘public goods’ might include: improving biodiversity, flood mitigation, improving water quality and maintaining landscape features.

Should we ever reach the stage of having clarity in what the overall UK budget for post Brexit ‘farming’ support will be, the bun fight between competing environmental bodies such as RSBP will then intensify. Will the voices of farmers and landowners be heard above this clamour?

Land agents are unfortunately not in the business of supplying crystal balls. Nor, given present circumstances, can we supply all the answers sought by our farming and landowning clients. What we can do is take a long hard look at individual farming businesses and how they might be strengthened to weather potential shocks in markets or support.

Any new support or grant schemes that do emerge post Brexit are likely to be highly competitive in their nature – potentially first-come-first-served.

Rhona Booth is a chartered surveyor and land agent in the Forfar office of Davidson & Robertson Rural.