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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.