Current View

Four years ago we became more and more concerned about the reduced turnover within our business. This was not due to look of yield or tonnes leaving the farm gate but the reduction in glaze of most crops that we grew. In particular winter wheat which is our main crop on an average basis had been under immense pressure and the prices of £100+ per tonne, even for feed varieties, of the eighties and early nineties were falling to £80 and currently £60. All cereal crops were therefore under pressure. The same could be said about harvest peas and vining peas where the consumption was struggling to hold it's own. It is only recently that there is likely to be a reduction on both quota and price of sugar beet, and that is something we are addressing now. Potatoes, we have been out of for some years, hence the letting of the stores.

So 4 years, seeing what was happening to the market place we had to look at ways we could cut our costs, without decreasing our efficiency, but still maintaining a reasonable margin.

We approached one of our neighbours who farmed some 1800 acres, growing similar crops with the same rotation. The soil types were slightly different but we found this an advantage as there was no need to either drill or cultivate at the same time, the lighter soils could be left a little later.

The main objective was to cut costs, we both employed two men, but it was the machinery that we were looking to reduce. The two businesses formed a partnership and the machinery that we wanted to keep was transformed at cost into the partnership. All machinery that was surplus to requirements were sold by the individual companies.

The outcome was that we reduced say from 10 to 5 tractors, 3 sprayers to 1, and in the last year from 2 combines to one. Sprayer and harvesting capacity was important, the Matrot sprayer with it's 36 metre boom width covers 400 acres to a 10 hour day. The rented combine harvester with a 30' leading and lazer steering (introduced in 2004) can harvest 120 acres in a 12 hour day. The tractors were either purchased or rented. The lower horse power one's purchased and the high horse power one's rented - they do most of the work, all land cultivations including ploughing (vaderstad 4m drill).

In summing up, we had reduced dramatically our capital expenditure and where we were renting, our depreciation was kept to a minimum.

There has been some fine tuning along the way, for example, fuel is now purchased through the partnership and we have devised a fairer way to proportion variable costs. Any capital costs are split on a per acre basis.

We continue to look at ways of improving on this structure but since the conception it has allowed us to maintain farm margins at an acceptable level.

Current Position

Farming remains in an ever-changing world. All crops are under pressure, the quality and assured schemes, allowing trace ability are ever increasing, rightly so. But the pressure on price is becoming unbearable and driving some farms out of business. Again we are looking at ways of how we can still maintain margins. We continue to talk to other neighbouring farms to discuss various options - water sharing, land swapping on a rotational basis and other ways of reducing and even sharing costs such as labour sharing. This is all very recent and I shall keep you updated if changes occur.

The more important issue is CAP reform which, of course, affects every farm, whether dairy or arable. I shall only touch on this and how it will affect our business.

Cross compliance is being introduced this year (2005). We shall be paid a subsidy on the area farmed rather than the crops we grow. There are various rules and regulations that we must adhere to, namely 2 metre margins from the centre of ditches with at least 1 metre from the verge into the field. This area will not be farmed and either grassed or left for natural regeneration, for the protection of wildlife, wild flowers, and other species. This, I believe, goes to enhance the countryside and the environment, and to make sure tax payers money goes into the right areas. We are being encouraged, and not that it didn't happen before, into caring for the countryside we live in, making it more an attractive and relaxing place for us all to visit.

One of the difficulties we are facing is that there are many changes taking palce at the same time. Not to be confused in any way with cross compliance, the Entry Level Stewardship is being introduced this year as early as August. This scheme encourages farmers to do more to their farms to encourage other environmental features from improving equatic life in the ditches to putting areas of wildlife cover in areas of the farm to improve the habitat of ever decreasing species. There is a point system being introduced where if you achieve 30 points a hectare you will receive £30 per hectare in subsidiary.

We are, I believe, changing our role in agriculture, rising on from being farmers providing food for the nation, to becoming custodians of the countryside. I have no argument with this, but ultimately would like to see a balance between the two, the environmental and the commercial. Successful, profitable businesses prosper and by doing so, plough money back into their business, not only to increase their margins but also to help the environmental issues.

There are interesting times ahead and we are enjoying the challenges that lay in front of us.