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Environmental Stewardship – Update

Silver Studded Blue Butterfly

Entry Level Stewardship and Uplands Entry Level Stewardship indicative budgets are unaffected by the Spending Review and remain open to farmers as before. Higher Level Stewardship funding is also secure and, after a temporary suspension, applications are now being progressed.

We are now well into the renewals period for ELS, with the first 5 year agreements coming to an end over the last few months. Cumulus is working with Natural England, farmers and landowners to ensure renewals are made, with advice on making the most out of the options to benefit farm wildlife, farmland birds, protect soil and water and protect the historic environment. These renewals and choice of options are also important in contributing to the Campaign for the Farmed Environment Programme to avoid the threat of compulsory set-aside. We would remind agreement holders to consider renewing early as the application deadline for renewals is always two months before the expiry date of the agreement to ensure there is no gap in payments.

The first Uplands ELS schemes started this year with around 2,800 agreements covering 325,958ha set up so far, exceeding expectations and ensuring continued support to hill farmers with SDA land, previously supported by the Hill Farm Allowance (HFA).

On the 16th November Natural England announced that Defra had confirmed the details of spending on Higher Level Stewardship until 2014. Spending on HLS will continue to grow year on year, during the RDPE programme (2007-2013). NE is now able to lift the temporary freeze on HLS agreements and will inform all applicants about the progress of individual applications within the next four weeks. Defra has also announced some changes to the targeting of HLS with more money being spent on protecting wildlife and reducing water pollution and less on farm renovations and access to the countryside.

If you are interested in renewing your ELS agreement or entering a new UELS or HLS agreement, contact Jonathan Brunyee or Jeni Pring at Cumulus.

Adding Value to Wool – Opportunities in North Wales

Wool compost

Sheep farming is an important component of the rural economy in many parts of the UK. While sheep meat prices may currently be strong the value of fleece rarely covers the cost of shearing. Wool is an amazing product but one that is sadly undervalued.

We were asked by Cadwyn Clwyd, the Rural Development Agency for Denbighshire and Flintshire in North Wales, to identify options for the industry to add value to the wool produced in the region to help farmers and rural enterprise.

Working closely with the British Wool Marketing Board (BWMB) we collated data relevant to wool production and processing in the Denbighshire and Flintshire area, and reviewed the national supply chain and market trends for wool products. We also interviewed key stakeholder (farmers, industry reps and processors/end users) and summarised a mix of interesting initiatives, businesses and projects from around the UK.

Jonathan Brunyee of Cumulus Consultants says "the study revealed that those involved are passionate about their industry and views are often strong and at times opposing".

Wool from the study area is not unique and the geographic provenance/profile is low. There are a range of hill and lowland breeds in the area most of which produce wool of mixed/course quality best suited to carpet making. The better wools do however have textile and craft value.

Jonathan adds "it is clear that we have to work with what we have, both within the commodity markets as well as the niche market, as farmers will not breeding for wool quality over meat and conformation in the foreseeable".

The wool industry is a complex chain of processes all of which add value and cost to the raw product. However, the range of products and uses for wool is vast, and the unique selling points (USPs) associated with wool are considerable.

Our study suggested that there is not one answer to adding value to wool to benefit farmers and enterprise in the area. The place to start is with cost savings and basic skills. Following this the most important consideration is identifying and developing desirable products, and then good marketing. The BWMB has an important role to play but there is scope for more entrepreneurial activity and simplified supply and processing. Large scale initiatives can benefit many with small price increases while niche projects and focused support benefit few, albeit potentially to a greater degree.

A toolbox approach was suggested focusing on 5 key recommendation themes:

  • Wool Production – supporting beneficial breeds and breed traits, and efficient wool handling.
  • Supply Chain – working with the BWMB to promote best practice and exemption possibilities to shorten the supply chain.
  • Processing – giving further consideration to the development of processing in the area, and also linking up with existing processors, particularly those who recognise and support local wool.
  • Products and Marketing – developing new products, encouraging innovation, supporting marketing activity and promoting local procurement.
  • Training and Skills – supporting farmers, shearers, designers, processors and retail through knowledge transfer.

The nature of the industry and the range of these recommendations will require a partnership approach, with different bodies leading on different tasks. Cumulus hopes to support Cadwyn Clwyd in the future with the next stage of development.

Farm and Environmental Consultancy Strengthened

Cumulus is delighted to announce the addition of Jeni Pring to the team. Jeni further strengthens the team's land management, conservation and environmental skills base and adds renewable energy experience.

With 5 years’ experience in the agricultural and environmental sector, at practical delivery level, Jeni has worked with a variety of landowners from family farms to large estates and NGOs. Her work has taken her across the country including upland and lowland farms. Jeni combines practical farming advice with good ecological knowledge. She has specialist experience in Environmental Stewardship, undertaking applications for Entry Level and Higher Level Stewardship agreements, including Farm Environment Plan surveys.

Jeni has also worked on a wide range of projects including managing water levels on floodplain grassland, habitat restoration, resource protection and developing renewable energy from biomass.

Comprehensive Spending Review – the impacts and responses

Comprehensive Spending Review

On 20th October, the Government launched its long-awaited Comprehensive Spending Review. Defra (and its agencies) will experience a 29% reduction in its budget in real terms over the next 4 years to 2014-15, this equates to a reduction in expenditure of £700m. Defra will however continue to invest in priorities such as flood protection and environmental land management. We look at the key changes in the rural arena and some of the potential impacts.

Changes

The key changes at Defra include the following:

  • Defra spending reprioritised at:
    • Farming and food production;
    • Enhancing the environment and biodiversity; and
    • Supporting a green economy resilient to climate change
  • A 58% reduction in the number of ‘arms length’ bodies (including quangos, special committees etc) from 92 to 39. Organisations such as the Commission for Rural Communities will be abolished and British Waterways will be reformed as a new charity.
  • Substantial reform of remaining bodies, including the Environment Agency and Natural England, with these bodies becoming leaner and more efficient, new more effective delivery models, and greater emphasis on closer working between bodies.
  • Spending focused on areas of high economic value including flood and coastal defences to better protect 145,000 households.
  • £66m of savings in the Rural Development Programme for England (RDPE), primarily via making better use of European co-funding.
  • Environmental Stewardship will continue, with ELS remaining open to all farmers and the HLS budget increasing by over 80% over the period to 2014-15.
  • Taking forward the cost and responsibility sharing proposals for animal welfare and disease prevention and control.
  • A reduction in red tape and unnecessary burdens – the task force on Farming Regulation will report in early 2011.

Impacts

At this stage, there is limited information on the proposed changes, however it would be reasonable to expect the direct impacts to include the following:

  • Agri-environment schemes receiving a lower budget than previously expected and greater emphasis on government priorities, for example:
    • ELS applicants being encouraged to select options with most environmental benefit
    • Funding for HLS applications being restricted to those which deliver high quality environment outcomes but not others.
  • Greater competition for other RDPE funding (Axis 1 and 3 programmes currently delivered by the Regional Development Agencies)
  • Less publicly funded advisory support being made available over the next 3-4 years to support delivery of environmental and rural programmes (e.g. fewer advisers, more limited scope)
  • Closer scrutiny of income generation and cost-saving opportunities including EU/CAP options, disposal of publicly owned land and property, and joined-up delivery of programmes.
  • Greater emphasis on ‘ecosystem services’ including mechanisms involving private sector payments for ecosystem services such as habitat creation, improved water quality etc.
  • Flood protection schemes with lower benefit-cost ratios being put on hold or cancelled.

In addition, it can be expected that other public bodies such as local authorities or lottery funds will be reducing and refocusing their expenditure.

Responses

In terms of an appropriate response to these ‘challenges’, we would suggest that farmers, landowners and land-based businesses:

  • Develop agri-environment scheme and other grant applications with the new priorities, and the delivery of the greatest possible public benefits, in mind;
  • Plan for reducing SPS and other scheme payments and public support in general. Look at alternative sources of income (on and off farm) and ways to reduce or share costs (e.g. joint ventures).
  • Consider opportunities for green, low carbon enterprises – not only will these be sustainable in their own right but there is likely to be continued support for these.
  • Consider renewable energy options – the Feed-in Tariff still looks attractive.
  • Watch out for payments for ecosystem services – this is at an early stage but may provide opportunities for additional income generation in the future.

If you would like to discuss any of the above matters, or advice regarding a particular farm, estate or issue, please contact Paul Silcock, Director, Cumulus.

STOP PRESS:

We understand that there may be an underspend with RDPE expenditure (Axis 1 and 3) in the period to March 2011. If you have been considering applying for a grant for a project, act soon to make the most of this funding window.

ELS renewals: evaluating the effectiveness of farmer training and information

Entry Level Stewardship (ELS) – England’s ‘broad and shallow’ agri-environment scheme – is now five years old. Agreements entered into in 2005 are coming to an end and are now in the process of being renewed. The challenge for Natural England is not only to maintain and ideally increase the area of land in ELS (currently standing at over 5 million hectares) but also to improve the scheme’s environmental outcomes. A significant training and information programme has been developed to encourage farmers to renew and select beneficial options, via both 1:1 visits and a range of group events. Over the next six months, Cumulus and its partner Delta-innovation, on behalf of Defra will carry out a project that will provide an early assessment of the effectiveness of this programme in influencing option selection.

The core of the project will be a farmer survey followed by analysis of farmers’ exposure to the training and information programme against actual renewals and option selection. A report on the findings will be produced in February.

“We’re delighted to be undertaking this important work for Defra and are looking forward to speaking to farmers around the country over the next few months. The feedback and analysis should provide valuable pointers for future training and information activity” commented Paul Silcock, who is project managing the research.

Defra and Natural England will be undertaking analysis on other aspects of the programme alongside our work on renewal and option selection.

For more information, contact Paul Silcock, Director, Cumulus.

Assessing the agricultural impacts of managed realignment

Managed realignment

Managed realignment in coastal areas may make sense in the context of climate change and sea level rise, and may be good for inter-tidal habitat creation – but can it be beneficial for the farmers and landowners affected? Over the past nine months, Cumulus has been working with the Environment Agency, engineers, ecologists and private landowners to assess this question and the wider agricultural and environmental implications of managed realignment in the Severn Estuary. The results are positive – for the right land and in the right circumstances.

Firstly, what is managed realignment? Managed realignment can be defined as the process by which coastal defences are altered to allow the controlled flooding of a currently defended area of land, thereby leading to the creation of inter-tidal habitat. It has been promoted on a number of sites around the country in response to sea level rise, the associated loss of essential coastal habitats and the need to reduce pressure on key defences. The rationale is that by acting now, in a planned and controlled way, flood risk, environmental and other benefits can be achieved and long term uncertainties removed.

Our work found that while managed realignment presents a considerable challenge to farmers and landowners, it also provides benefits and opportunities.

From a farming perspective, although arable and improved pasture might be lost, the replacement habitat, saltmarsh, is productive and can provide very good grazing for cattle and sheep. Adverse impacts arise, however, in the form of reduced flexibility, loss of land to channel and creek formation, more difficult access and increased risk of fluke.

Financially, there is potential for gains in net income, with increased agri-environment scheme payments outweighing farm business losses. Our calculations indicated a £200-600/ha agri-environment scheme gain compared to a £100-200/ha farm business loss, with the exact difference depending on a variety of factors including current land use, farming system and agri-environment scheme participation. Farm business profitability could be further improved by exploring and the exploiting the marketing and diversification opportunities arising from the scheme, for example meat marketing, access and education and eco-tourism.

Other factors to be taken into account include the net cost of capital works to facilitate changes in land management, the potential need for rental adjustment and a reduction in land values (which should, under a planned management realignment scheme, be offset by compensation).

Not to be underestimated is the benefit to farmers and landowners of directing and controlling realignment, with the support of partners, as opposed to being governed by chance in terms of the nature and timing of future breaches and flooding events. Unmanaged breaches risk causing extensive agricultural and economic damage and will not attract the same level of technical and funding support from potential partner organisations.

If you would like to find out more, or would like to get a better understanding of the agricultural and wider business impacts of similar projects elsewhere, please contact Paul Silcock, Director, Cumulus.

Budget cuts and agri-environment – how will you be affected?

An agri-environment

Many farmers now see agri-environment (AE) monies as an important income stream to their business and many are in the process of applying for HLS as their old ESA or CSS agreements are coming to an end. The coalition government is reducing public sector spending as we speak and the rural development funding pot (RDPE) and the Defra/Natural England AE budget is not immune. There is some good news and some bad news, however farmers would be wise to make their HLS applications sooner rather than later.  

Significant cuts to annual and capital spend would impact on farmers, suppliers (tree nurseries, wild flower seed merchants) and contractors (dry stone wallers, fencing gangs, hedge layers) alike, and result in business instability and possible job losses. This would be in addition to the loss of some of the environmental gains and farmer goodwill that has accrued in recent years when we have seen a definite period of positive agri-environment support (partly funded by SPS modulation).

The current position for agri-environment is that Defra and its delivery bodies, such as Natural England, will contribute £162m to the Government’s overall £6bn savings this year – that’s 5.5% of Defra’s budget for 2010/11. Like most areas that are not ring fenced, RDPE will make a contribution to that reduction in the budget deficit.

One part of the cuts is a reduction in the RDPE budget in 2010/11 – this is a first step in the drive to reduce the public sector deficit. Defra and Natural England are tasked to work with central government to balance the requirement to cut costs with the need to protect the environment.

The good news is that existing commitments for agreements and capital works will not be affected. Natural England is still able to write new agreements and make commitments for future years with capital schemes included. Farmers are encouraged to carry on with their HLS, UELS, OELS and ELS applications. The historic and traditional buildings budget is also not affected.

There will be a significant impact, however, on the number of new amendments to existing agreements (CSS, HLS and ESA) that spend in 2010-11. It is now very unlikely that any new amendments will be agreed. But, existing agreements can have amendments added, if they spend in 2011-12 or later.
Natural England will continue to discuss with agreement holders the possibility of agreeing capital works later in the year, when they have a clearer picture of all of the budget priorities.

Cumulus believes that the situation will get worse with further cuts to come before things get better in 2013/14. Farmers would be wise to get their HLS applications and comprehensive capital works plans to Natural England this year. For more information please contact Paul or Jonathan.

Wilden Marsh – bringing land managers and environmental bodies together to restore SSSI condition

North Weir at Wilden Marsh and Meadows SSSI

A bold project to restore groundwater levels at Wilden Marsh and Meadows SSSI, near Kidderminster, Worcestershire has just been completed by the Environment Agency working with partners including Natural England, Worcestershire Wildlife Trust, private landowners and tenants. The work has involved the construction of two 1.5m high rock ramps in the River Stour, the de-silting of a main carrier ditch and the construction of a control structure at the end of the ditch. This work, together with associated water level management, will restore much of this priority site to a favourable condition for nature conservation. Cumulus is delighted to have played an integral role in the project liaising with landowners and tenants during the planning and implementation of the project, negotiating compensation settlements and scoping future environment enhancement via co-ordinated Higher Level Stewardship agreements.

Paul Silcock, Cumulus commented “This has been a very interesting and challenging project for us. It’s involved bringing together six landowners and tenants, working with engineers, ecologists and others to determine the physical impacts of the proposed works, assessing the financial impacts including the effect on land values, and developing a framework for the future management of the site”.

For more information on Cumulus’s specialist expertise in delivering environmental or other land-based projects involving multiple landowners and/or complex issues, please contact Paul or Jonathan. 

Common Agricultural Policy reform – what can we expect after 2013?

EU flag“An extensive public debate” on the future of the Common Agricultural Policy (CAP) beyond 2013 has recently been called for by Dacian Cioloş, the new European Commissioner for Agriculture and Rural Development. This follows the publication of a range of policy visions and position statements from different organisations over the past few months. Later this year, the Commission will produce a policy paper setting out different options for public consultation. What can we expect from the next round of CAP reform and how should we prepare?

The Commissioner’s recent statement highlights some of the key issues in the debate:

'The Common Agricultural Policy is for all of society. It is your policy, not just for farmers. European agriculture is about food security, but also about landscapes, employment, environment, climate change. Let us know what your needs and expectations are for the future of agriculture and rural areas in Europe. Help us put forward a policy that serves them best!'

In other words, firstly the future shape of the CAP will be influenced by wider societal needs and views and secondly agriculture has a very important role to play in addressing some of the key challenges faced by Europe in the future.

More specifically, the Commission has identified that the reformed CAP will need:

  • to allow for farmers to be as market-orientated as possible;
  • to provide a safety net such that serious long-term damage for the farming production base is not caused by occasional crises;
  • to aid the modernisation of farming in order to provide public goods such as maintaining attractive cultivated landscapes and enhancing the environment.

Further important points include the facts that: there will be pressure for cuts which is likely to result in a reduction in the overall budget and hence payments made to land managers; and the European Parliament and its new Agriculture Committee will be significant players in the post 2013 debate following the ratification of the Lisbon Treaty.
 
Although there are many different perspectives on the CAP in the future, it appears to be commonly accepted that there should be a European policy which respects the need for flexibility within individual nations. The need for simplification as well as transparency and efficiency of the CAP payments is also a view shared by many Member States as well as non-governmental organisations (NGOs) such as Birdlife and the RISE Foundation (Rural Investment Support for Europe). Additionally, there appears to be common consensus on the need for more precisely specified payments for the “purchase” of public goods. This might mean that some methods of farming which are considered to deliver more public goods, such as organic farming and high nature value (HNV) farming, would be more heavily supported by the new CAP.

So what can we do and how can we prepare?

Firstly, there is much that can be done to influence the debate whether this be directly via responding to the Commission’s consultation with general or specific proposals, or indirectly by supporting one of the range of organisations presently putting forward policy papers.

Secondly, we can be assured that public expenditure delivered via direct payments (i.e. the Single (Farm) Payment) or targeted payments (e.g. agri-environment scheme payments) will reduce. Land managers will therefore need to make plans to adapt to an era of reducing public subsidy by developing farm and non-farm enterprises which are sustainable at lower levels of support and/or reducing the cost base of the business. A further, important approach will be for land managers to identify the full range of public benefits being delivered by their businesses (and how these could be enhanced) and then act to secure the best available rewards for these (for example, securing farm/estate wide Higher Level Stewardship payments).

If you would like more information on influencing CAP reform or adapting your business to the challenge of reducing, and more targeted, payments, please contact Paul Silcock, Director, Cumulus.

SEEDA Launches its Farm Resource Improvement Programme (FRIP)

The South East England Development Agency (SEEDA) has just announced the launch of the Farm Resource Improvement Programme (FRIP) in South East England and London. The aim of this programme of support is to improve competitiveness through resource efficiency and animal health and welfare practices. Grants of up to £25,000, maximum 50% grant, are available to farmers and horticultural businesses across 4 funding areas which aim to improve the profitability of farms through sustainable farming practices.

Funding for nutrition management aims to achieve improved profitability by reducing manufactured fertilisers on farm and improving handling and application of farm manures. Eligible items include (but are not limited to): slurry distribution kits; mechanical slurry separator systems; nutrient testing kits; and Global Positioning Systems (GPS) as part of a nutrient management plan. Priority will be given to livestock farmers.

Funding for energy efficiency aims to improve profitability by recovering energy on farm resulting in reducing farm energy bills and carbon dioxide emissions. Eligible items include (but are not limited to): heat recovery systems such as heat exchangers; gel coolers; and ice builders.

Water resource management funding has a minimum grant of £8,000. The aim of this funding is to reduce the farm business’s reliance on mains water through harvesting, recycling and reuse of rain water on farm in order to improve farm profitability. Eligible items include (but are not limited to): project design; purchase and installation of rainwater harvesting equipment; recycling and reuse facilities; and roofing for slurry stores / lagoons, handling areas and silage clamps as part of a comprehensive rainwater harvesting system.

Grants of up to 40% are available to improve farm animal health and welfare. Investments may be supported for: high specification parlour improvements; specialist equipment to significantly improve livestock performance recording and handling; small scale animal welfare building enhancements; and specialised computer software. All equipment must be supported by a Farm Health Plan undertaken by a vet (these may be subsidised through Livestock Health South East).

Each farm business is eligible to apply for grants under all 4 categories to a maximum of £25,000. The deadline for the first round of applications is 12th March 2010 whilst the second round deadline is on 10th May 2010. Further rounds are likely to take place towards the end of the summer.

Cumulus is able to advise farm and horticultural businesses on improving resource efficiency, thereby reducing costs and the environmental footprint of the business.  We can also help secure funding through FRIP and similar initiatives.  For more information, please contact Paul or Jonathan.

Financial Help for Energy-Saving Equipment on Farms

From 1st February 2010, English farmers will be able to apply for 0% Business Loans from the Carbon Trust. The Government’s Low Carbon Transition Plan includes a target to reduce agricultural greenhouse gas emissions by 3 million tonnes of carbon dioxide equivalent annually by 2020. This financial help is aimed to aid farmers across England to invest in energy-saving equipment and reduce their energy bills by a total of £4million and 25,000 tonnes of CO2 annually.

English farmers are eligible for unsecured, interest-free loans of between £3,000 and £20,000 to help with upgrading to more energy-efficient equipment. The intention is for loans to pay for themselves, through direct energy savings, over a 1 to 4 year period. After the loan is repaid, farmers will make direct savings on their energy costs as well as cutting the carbon footprint of their products.

For example:

  • Milk cooling systems are thought to account for a third of the energy consumption of dairy farms, funding to help with the initial cost of a new system (around £3,000) could save the farm up to £1,600 per year as well as reducing greenhouse gas emissions by approximately 6 tonnes of CO2 a year.
  • The installation of thermal screens for greenhouse horticulture or additional insulation in storage facilities for field horticulture crops costs in the region of £18,000, however the anticipated energy savings are around £10,000 annually.

Cumulus Consultants can identify potential areas for energy-saving investments on your farm or rural business, calculate the economic and environmental benefits, and help you access the 0% loans available. "This is fantastic opportunity for farmers with growing businesses to reduce costs and lower their carbon footprint at the same time" commented Paul Silcock, Director of Cumulus.