Farmers seek feed and fertiliser savings post-BPS

24th January 2022 | Agricultural Inputs, Farm Business, Surveys

While almost a quarter of farm businesses in the UK intend to reduce expenditure on fertiliser and feed as the Basic Payment Scheme (BPS) area-based farm support is phased out, two-thirds have not made any plans.

This is the finding of a poll of 1,107 UK farmers in October 2021 by the National Farm Research Unit (NFRU), a Map of Ag business. The survey also found that 19% of farmers expected to spend less on replacement machinery. However, it revealed that almost two- thirds of the sample had no strategy to modify their business in line with reducing support – either to diversifying revenue streams or reducing cost in existing farming systems.

The NFRU suggests that reduced expenditure on farm inputs is likely to be magnified by a potential fall in farm business numbers as some decide to exit the industry by opting for a lump sum BPS payment.

By sector, the NFRU observes that reduced BPS payments – combined with currently soaring fertiliser prices – suggest that 35% of the sample (extrapolated to almost 19,000 arable farmers) will cut back on fertiliser spending. A quarter will trim machinery spending and 9% (6,000 farmers) cut back on agronomy services. Over 17% (11,500 arable farmers) are expected to reduce their expenditure on crop protection products.

More than a third of dairy farms in the survey indicated their preference to reduce bought-in animal feed, with a similar number planning to reduce their fertiliser spend. Herd managers aimed to replace more bought feeds with home-grown forages, with a quarter seeking to reduce machinery expenditure. Fertiliser, feed and machinery savings were also targeted by a quarter of sheep and beef farmers.

Between 5-10% of all farms will seek to save on professional advice services such as veterinarians, agronomist and nutritionists.

“We know the strategic importance of food security to a country,” notes AIC chief executive Robert Sheasby. “Whilst many farmers responding to this survey are not sure what steps they will take, food will still be needed in the UK – which will require the agri-supply trade to provide the inputs UK farming will need.

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“The policy framework will be essential, something we are lobbying government on, and AIC members in their advisory roles are already supporting farming businesses as we adapt to the new policy framework.

“The importance of planning, setting long-term on-farm goals, and ensuring the buy-in of all decision makers to a farming business – as well as policy makers – is central to the success of the agricultural transition over the next decade,” concludes Mr Sheasby. “The link between all professional advisers in industry and through the public sector is key to joining up ambitions and delivery, ensuring the UK develops a dynamic, sustainable and competitive farming sector.”