Autumn2008 by The Farmers Club

A host of exciting things to do in

London Events over the next few weeks include: Now running: Joseph and his Amazing Technicolor Dreamcoat Adelphi Theatre Strand Tel: 0844 412 4651 www.josephthemusical.com Now running: The Lion King Lyceum Theatre Wellington St Tel: 0844 844 0005 www.thelionking.co.uk Now running: Grease Piccadilly Denman St Tel: 0844 412 6600 www.greasethemusical.co.uk Still running: The Mousetrap St Martin’s Theatre West Street Tel: 0844 499 1515

Ongoing: Tate Modern Bankside Holland Street Tel: 020 7887 8000 Still running: Mamma Mia! Prince of Wales Theatre Coventry Street Tel: 0844 482 5115 www.mamma-mia.com Always open (except Christmas Day): London Zoo Meet the Animals Tel: 020 7722 3333 Open daily, 9.30am - 8pm: London Eye South Bank Tel: 0870 500 0600

While in the Capital why not stay, dine and relax at YOUR Club Remember, you can now book to stay on Friday, Saturday and Sunday nights up to six months in advance

Much to learn and talk about on Club visit to two Wiltshire farms Article and pictures pages 12-13

To book to stay or dine at the Club call reception on

020 7930 3557 (Please note Club closure dates on page 23)

Dinner is now available from 6pm Monday to Friday

inside… • • • • •

For further events go to www.visitlondon.com More details about The Farmers Club at www.thefarmersclub.com

Club Information Sheet Staff Christmas Fund Committee Ballot Form AGM Notice (page 22) Christmas Card (page 22)

Please note your individual Club membership number, printed on your Journal envelope. You will need it to access the members’ section of the Club website at www.thefarmersclub.com

CHAIRMAN’S COMMENTS • Julian Sayers

THE FARMERS CLUB Over 160 years of service to farming

A summe r of rain with little sunlight hits both harvest and market returns

3 Whitehall Court, London SW1A 2EL

contents

Patron – Her Majesty The Queen

2 Chairman’s Comments Julian Sayers writes about the affects a dismal summer has had on harvest quality and market returns, electronic identification of sheep, the Taylor Review, Club events, the Game Fair and refurbished rooms. 4 Serving dairy farming DairyCo Chairman Tim Bennett describes the role of this new company and the service it will provide on behalf of Britain’s levy-paying dairy farmers. 6 Sourcing best of British Senior Agriculture Assurance Consultant David Thomas explains how McDonald’s sources only quality British produce whenever possible. 8 TAG centenary Membership Development Manager Rob King gives a history of The Arable Group, as it celebrates its centenary and looks to a challenging future. 10 NFSCo looks ahead Michael Seals, Chairman of the National Fallen Stock Company, outlines the vital work of the organisation and all it has to offer to the livestock industry. 12 Wiltshire farm visits Don Gomery reports in words and pictures on the Club visit earlier this year to two outstanding farms in Wiltshire - an arable/dairy and a 500-cow dairy unit. 14 Carbon-friendly policies Chris Knock used a Club Charitable Trust bursary to visit mainland Europe and study the integration of carbon-friendly policies into farming practices. 16 Cutting tax bills Susan Shaw explains the importance of going back to basics in order to legally cut one’s tax bill. 18 Changes in taxation Under 30s member Andrew Vickery looks at the practical implications of changes in agricultural taxation. 19 Under 30s 20 Whitehall Court Ramblings 22 AGM Notice 22 Club Christmas Card 23 Information and Diary Dates Disclaimer: The articles published in The Farmers Club Journal do not necessarily reflect the views of The Farmers Club. No responsibility for the quality of goods or services advertised in the magazine can be accepted by the publisher. Advertisements are included in ‘good faith’. All rights reserved.

UNFORTUNATELY, sitting here at the end of August, the hope I expressed in the Harvest issue of the Journal, that we might enjoy better weather this summer, has not transpired. In the first half of the month we saw the UK’s rainfall exceed the normal average for the whole of August… and it’s still raining, as I write. In addition, the normal hours of sunlight we can expect have reduced by almost half, leading to the worst conditions on record since 1942. As a result, crops remain in the ground and are starting to suffer in terms of quality and, in some cases, yield, which is being reflected in market values as imports increased. There will doubtless be a knock on effect in terms of the autumn work schedule and ground conditions. All in all, it’s proving a difficult time for arable farmers, as opposed to the more profitable season which was on the horizon earlier in the year. Let’s hope matters will improve over coming weeks and producers can once again focus on a brighter future.

Livestock pressures In the livestock sector, prices - including those being paid for milk - remain higher than this time last year, although the increasing cost base, from all angles, shows no signs of abating. Financial pressures, therefore, remain a real issue, as we have now seen for a number of years. The dairy sector has been faced with two of the leading supermarkets slashing the price of milk on their shelves by up to 38%, to just 50p for two pints. The retailers concerned claim this will not impact on the price being paid to producers. We will have to wait and see. Having said that, the situation can hardly help to improve the prospects for enhanced

returns as dairy farmers address a number of challenges, including the investment which will be required to comply with the new NVZ regulations due to be introduced this autumn.

The report contains some 48 recommendations, many of which will strike a cord with those who have been involved in trying to support our rural communities in recent years.

Questionable change

These include reviewing planning policy to reduce conflicts, to take account of all three strands of sustainability (economics, environmental and social) and to have a long term vision to enhance our villages. On the same theme, to introduce a wider Planning Policy Statement that will address practical planning issues, and a new Design Guide to assist local authorities when it comes to best practice for neighbourhood design.

Sheep farmers also face a new hurdle with the proposal to introduce compulsory electronic identification early in 2010. There seems to be a question mark as to whether the benefits of such a system, when compared with the existing recording measures, are really worthwhile, given the projected cost for each producer is one which many can ill afford. In some cases this may prove to be the straw which breaks the camel’s back, with the prospect of new technology and the capital outlay forcing them to opt for retirement from the industry. Those concerned with implementing these new measures need to think very carefully about how such a system will impact on those farming on the margins, particularly in our upland areas. If our countryside is to be maintained as it has been through the centuries, the national sheep flock must remain an important part of the farming industry.

Taylor Review On the rural policy front we have seen the publication of The Taylor Review of the Rural Economy and Affordable Housing, entitled ‘Living working countryside’. This confirms what many of us already know to be true, such as the cost of rural housing, particularly for first time buyers, is significantly higher within our rural communities, where average earnings are lower. Also, the opportunities to work locally offer a more sustainable future, and everyone needs to understand that the economy in our rural areas is diverse and dynamic. To address these issues we need to face up to the need for appropriate development in the countryside. Settlements must be allowed to evolve, otherwise they will decline and fail to provide the facilities required.

THE FARMERS CLUB JOURNAL Autumn 2008 • www.thefarmersclub.com

As one might imagine a good number of the recommendations relate to affordable housing. From what I have read, these may well help to deliver much needed new homes, but only if taken on board and acted upon by the Government, local authorities and others in the round. I just hope this report will not be allowed to gather dust on shelves in the corridors of power, as we have seen with similar documents in the past.

Combined membership tops 1300 years

Twenty-six Honorary Members of the Club, plus a few guests, joined Chairman Julian Sayers for this picture in early August before enjoying a delicious lunch of salad, chicken and seasonal fruits in the adjoining Eastwood Room. To be an Honorary Member of the Club one has to have joined at least 50 years ago, meaning that this distinguished group had, between them, a combined membership of more than a mind-boggling 1,300 years. What stories they had to tell! Loudest acclaim, however, was given to the Chairman’s announcement that the lunch is to be a permanent feature on the Club calendar.

Super occasions I was delighted to spend a day at the Club early in August, firstly hosting a lunch for 26 of our Honorary Members who came together from across the country for a very enjoyable afternoon. This has become an annual gathering for those who have supported the organisation for many years, and I hope it will continue. I was so pleased to see friends meeting up again and to hear stories about the comings and goings at the Club in years gone by, which were extremely enlightening! I went on to attend the Under 30s Pimms Reception and Summer Dining Evening, which was a lively occasion mainly supported by those who live in and around London, due to the time of year. These two events show just how the Club caters for our wide spectrum of members, all of whom appreciate the warm hospitability and excellent catering provided by our staff team under the guidance of Don Irwin and Chris Burden.

Game Fair Our first appearance as a Club at the CLA Game Fair this year was a great success, with some 70 members, including a good number of Under 30s, coming together for a drinks reception held on the Saturday evening. I was delighted to welcome CLA President Sir Henry Aubrey-Fletcher and his wife, together with other guests from the association, to the event, which rounded off the second day. After last year’s cancellation, the Game Fair attracted record numbers to Blenheim Palace for its 50th anniversary and was, happily, blessed with fine weather.

Refurbished rooms The annual summer refurbishment programme has been in full swing over the past few weeks. The work has been interesting to see at first hand while visiting

www.thefarmersclub.com • THE FARMERS CLUB JOURNAL Autumn 2008

the Club during the closure. I’m sure members will appreciate the alterations and improvements which have been made to the public rooms, as well as the upgrading of a number of bathrooms. I will say no more, but please come and see for yourselves. If you are not a regular visitor to the Club, why not consider booking in for a well-earned autumn weekend break after our dismal summer?

Saying thanks Finally, you will find enclosed in this edition of the Journal the annual appeal for the Staff Christmas Fund, which I hope as many of you as possible will support. As mentioned above, we have an outstanding team of staff at the Club who go out of their way to make members feel at home, whether visiting Whitehall Court for business or pleasure. This is our chance to say thank you. 3

DAIRYCO • Tim Bennett

Club Committee member Tim Bennett is Chairman of DairyCo, set up in April this year to replace the Milk Development Council following a revue of agricultural levy boards by Defra in June 2006. He explains the role of DairyCo and the service it will provide to, and on behalf of, Britain’s levy-paying dairy farmers, as well as the part individuals can play in moving the company forward.

DairyCo all geared up to provide essential service on behalf of British dairy industry Agriculture and Horticulture Development Board (AHDB). The six sector companies now report in to AHDB, with DairyCo covering the milk sector. DairyCo’s board has 12 members, including eight dairy farmers, located across Britain and operating a number of different production systems. In addition to this high representation of farmers – which is appropriate, considering the levy is only raised from dairy farmers – there are two people from outside the industry on the board, plus one dairy processor and myself. OUR ROLE is an important one for the British dairy industry. We will tackle issues not currently being sufficiently dealt with by the supply chain and we will provide independent world class knowledge to British dairy farmers to help them profit from a sustainable future. We will use the levy to help farmers achieve this by providing them with the knowledge and tools to be competitive in a growing global market, and we will place levy payers at the centre of everything we do. All our activities will be measured and will be shown to have a return on financial investment for the industry. It is our firm intention that, while we will continue to provide important services that help tackle the issues facing the dairy industry, we will also do our utmost to encourage the industry to ultimately take over the provision of these services, either on a commercial or voluntary basis. That’s the ultimate test of our success. If we can work towards correcting market failure in all these areas, there will be no need for an organisation such as ours to exist.

Company background DairyCo replaced the Milk Development Council (MDC) on 1 April 2008, following a fundamental review of agricultural levy boards by Defra in June 2006. The five existing levy boards covering milk, meat, horticulture, potatoes and cereals were replaced by one statutory levy board - the 4

As part of the changes that occurred in April, we at DairyCo have a great opportunity to offer better value by working more closely with the other levy bodies. We’ve already agreed to share our ‘back-office’ activities by the end of next year, and in the future we’ll all be based in the same location.

Supply chain relations exist inherently between commercial parties such as dairy businesses and processors. However, relationships are built on common understanding and the necessary information is not always available to farmers, who need a fair marketplace with analysis of structural issues and the provision of information for policy formulation, which indicates the need for supply chain information. Processors are already addressing issues of supply chain efficiency through Dairy UK, but farms still have a huge variation in efficiency… in excess of 5ppl in costs of production between the top 10% and the average. There is a need to support improved business performance, and there is also a need to provide farmers with toolkits to help them meet regulatory and environmental requirements.

Current position The other board members and I recognised that much of the MDC’s work was still valuable and relevant but believed a fresh look at the industry was required. We have analysed the industry’s strengths, weaknesses, opportunities and threats, and gauged what farmers needed to maximise their profits in the future. We’ve matched needs against the current services and activities of other industry organisations – from private companies such as dairies to member organisations like the NFU and Dairy UK – and identified the gaps, the market failure. We’ve identified that in innovation and market development £120 million of commercial funding was spent on advertising dairy products in 2006 and around £140 million during 2007. Product innovation and launches are increasing but there is possible market failure in managing the image of dairy products and dairy farming to underpin this growing commercial activity, indicating the need for image management. THE FARMERS CLUB JOURNAL Autumn 2008 • www.thefarmersclub.com

This indicates the need for business management. Having identified these areas – image management, supply chain information and business management – we developed the business plan with the following objectives: • Business management – helping dairy farmers increase their profits while meeting regulatory and environmental requirements through better business management. This will include carrying out significant research and development to meet these challenges and to ensure delivery of information that really makes a difference to dairy farming businesses. • Supply chain information – providing high quality information to help farmers and their representatives make the most of dairy markets and opportunities. • Image management – promoting a positive perception of dairy products and dairy farming to the general public. • Securing non-levy funds – by doing our utmost to encourage the industry to take over these services we will reduce the need to collect levy in the future. We are committed to bringing levy payers an organisation that works for them and with them. We have a great team in place to deliver ambitious and exciting projects to a re-energised, profitable dairy industry. Delivery and accountability to dairy farmers will be at the heart of every DairyCo strategy.

Future strategy We will measure ourselves rigorously against the objectives set out in the business plan to ensure we deliver world class answers that address the needs of dairy farmers. We are going to focus on doing fewer things and doing them better. In different areas of the organisation’s work this means different things. For example, in supply chain information, which includes the Datum service, we will focus on making the supply chain work more effectively by ensuring everyone has access to high quality information. In research and development, it means ensuring there are exciting new techniques for the future. It also means making sure farmers have access to high quality and independent information backed by proven science and publications that can really make a difference to their business.

In image management, it means promoting dairy farming to ensure there is a positive attitude from the general public towards dairy products, resulting in new and innovative products being in greater demand. Through research, market information and ‘knowledge transfer’ we will gather and commission the best national and international information and research and bring it to British dairy farmers. The board members were introduced to dairy farmers last autumn and we’re encouraging levy payers to get in touch with us and let us know what they think about the new organisation and what they would like it to do. We’re also moving around the country for our board meetings, and this is a valuable opportunity for farmers and board members to meet and discuss important issues affecting the industry.

Get involved We’re currently recruiting new members for our regional forums, which we’re setting up to develop the vitally important two-way communication between the new organisation and our levy payers. Forum members will be able to trial development-stage tools and publications on their farms, allowing them to take advantage of the latest industry research as soon as it becomes available. Members will also be given the opportunity to feedback on tools, services and campaigns, and will be able to influence research and development and knowledge transfer decisions. Farmers, as our levy payers, are essential for the success of the new organisation and this is another opportunity for them to engage with us and get involved in moving the organisation forward. Other industry stakeholders also have an important role to play, so we would like a small number of non-farmers to be members to give a wider perspective on the industry and DairyCo’s role within it. We hope to build 10 regional groups, each led by a local board member. Each forum will consist of up to 15 members, mainly practicing dairy farmers across a range of different dairy farming systems, together with some other industry stakeholders such as vets. • For more information or to apply to join a regional forum contact Vicki Hill on 01285 646544 or email vicki.hill@dairyco.org.uk

www.thefarmersclub.com • THE FARMERS CLUB JOURNAL Autumn 2008

SUPPORTING UK FARMING • David Thomas

Fast-food giant McDonald’s gets a lot of stick for allegedly producing cheap and unhealthy food. This is completely unjustified, says the company’s Senior Agriculture Assurance Consultant, David Thomas, who explains how McDonald’s sources the very best of produce from UK farms, whenever possible.

McDonald’s goes all out to source best of produce from UK farmers AS THIS summer’s season of Royal agricultural shows comes to a close, McDonald’s underlines its continuing commitment to British agriculture. More than 70% of McDonald’s produce is sourced from the UK, with beef alone coming from some 16,000 farmers in the UK and Ireland. What’s more, the company spends more than £1 million on beef every week, making it the largest purchaser of British manufacturing beef in the UK. Other products McDonald’s sources in the UK include pork, potatoes, chicken, cheese, and free-range eggs. As Dean McKenna, Head of Supply Chain, says: “All of the beef that we use in our UK restaurants comes from British and Irish farms, totalling some 3,140 in England, 2,800 farms in Wales, 2,100 in Scotland, and 1,450 in Northern Ireland. “We are very proud supporters of the British agricultural industry and appreciate having such high quality beef available to us. “It was encouraging to hear such positive feedback from farmers visiting this year’s shows, in particular regarding the 5% premium we paid for beef and pork last year, during what was arguably one of the toughest periods for the agricultural industry in recent times.” McDonald’s attended the Balmoral, Royal Highland and Royal Welsh Shows, as well as sponsoring the British Guild of Agricultural Journalists’ conference at the Royal Show. At the latter, nearly 200 delegates heard from a number of keynote speakers, including Dean McKenna, who

spoke about McDonald’s commitment to UK agriculture and on the importance of working in partnership with farmers to manage the challenges of the moment, such as rising energy costs and food cost inflation. McDonald’s policy is to source locally, wherever possible, and the company has a number of Welsh suppliers including St Merryn Meats in South Wales, which has been supplying beef to McDonald’s for 12 years. As John Dracup of St Merryn Meats says: “McDonald’s has some of the highest standards in the industry for both product quality and animal welfare. The beef cattle we purchase are among the best in the country, which allows us to provide a consistently high quality product to McDonald’s and our other customers.” Ron Mounsey, a McDonald’s franchisee in Wales and a former dairy farmer, adds: “More and more people have a real interest in finding out where their food comes from. As a businessman I am particularly proud of the fact that I can tell my customers that McDonald’s source beef from the UK and I have met many of the farmers that provide cattle to the plants that produce beef for us.”

In the meantime, here are some key facts about McDonald’s: • The company employs some 67,000 people in the UK in more than 1,200 restaurants. • There is now more choice on our menus than ever before. We’ve added more in the past three years than in the previous 28. • McDonald’s sources its beef from 16,000 farmers in the UK which are part of the Farm Assurance Scheme, set up to give consumers confidence in British livestock production • On average, customers eat three meals with us out of the 90 or more meals they eat in a month. • We offer a range of tasty food in a safe and fun environment. Two million people visit us each day because they enjoy the food and the experience. • We only use whole cuts of forequarter and flank beef in our 100% beef hamburger patties, sourced from more than 16,000 British and Irish farmers.

One of the farmers currently supplying beef to McDonald’s is Julian George, who runs around 500 head of cattle on his farm in Hasguard, near Haverfordwest, Wales. He explains how McDonald’s is an important customer for the Welsh beef industry.

• We used more than 81 million free range eggs in our breakfast menu in 2006.

“As a farmer, I’m aware of the importance of maximising returns from my cattle,” he says. “The meat used by McDonald’s whole cuts of forequarter and flank - is ideal for burgers, and provides an opportunity to maximise returns as well as produce a quality end product.”

• Customers are more interested than ever before in what they are eating. We are committed to providing them with the information they need to make the choices that are right for them (since 1984). Nutritional information can be found on our trayliners, our website, and now our packaging, with the launch of our new nutrition information initiative.

Dean McKenna concludes: “The Royal shows provide a great opportunity for customers, farmers and families to come along and find out more about our food and our supply chain, as well as ask us questions about these and any other aspect of our business. “We are already looking forward to the 2009 shows, when we hope to meet even more people than this year.”

• We reduced the salt content of our Chicken McNuggets by 30% and our fries by 24% in 2004. • The only meat used in all of our chicken menu items is chicken breast.

• Through our grassroots Community Football coaching programme with the four national Football Associations we have created 10,000 new qualified community football coaches, providing good quality coaching at grassroots level in communities all across the UK. • This programme has created more than 5 million coaching opportunities to date and provided over £2million of equipment • McDonald’s was listed in the Financial Times 50 Best Workplaces in 2007.

Proud to sell to a company which has been so supportive of Welsh farming AT COTTS FARM, near Haverfordwest, the gentle valleys of Pembrokeshire roll away towards the Irish Sea. Julian George and his wife Helen are the lucky owners of this beautiful spot, but with a mixed herd of 500-600 cattle and 575 acres they don’t often have time to stand around and admire the scenery. As one of 2,800 Welsh beef farmers supplying McDonald’s, Cotts Farm has sold whole cuts of forequarter and flank to the company since 1996, and McDonald’s has been buying Welsh beef since it first opened restaurants in Wales.

Julian is proud to be able to meet the rigorous standards set by McDonald’s. “The company is very important to Welsh agriculture,” he says. “Its constant demand helps to maintain the industry and allows us to plan more effectively. Over the years, it has proved to be a staunch supporter of Welsh and UK farming, and we welcome this positive approach.” Ron Mounsey, a franchisee of eight restaurants in Wales, including Haverfordwest, says: “More and more people have a real interest in finding out where their food comes from. As a local businessman I am particularly proud of the fact that I can tell my customers that McDonald’s sources beef from Wales, and that I have met many of the farmers that provide cattle to the meat plants that produce beef for us.” Julian and Helen have successfully managed Cotts Farm together for 25 years and took over full ownership from Julian’s parents in 1999. They now employ two local men, whose support is invaluable. “Farming has definitely changed during my time here,” Julian says. “My grandfather was a beef farmer in the local area and I think he would have been amazed by the levels of accountability we have nowadays. It’s an essential part of running a modern farm and we take it very seriously.” Helen agrees: “Traceability is vital. We track all our cattle from purchase, including details of weight and age, because with a mixed herd like ours it’s vital to know exactly how each animal is faring.” The cattle at Cotts Farm are fed almost exclusively on home-produced feed and spend as much time as possible outdoors eating the Pembrokeshire grass. Julian takes care to choose the cattle himself, and, when they have matured, personally delivers them to the abattoir both to reduce stress on the animals and to oversee the whole process. Despite the modern approach, Cotts Farm is still very much a family affair.

• McDonald’s sells coffee with a conscience… coffee from farms independently certified to environmental and social standards by the Rainforest Alliance.

“Our three sons have always been involved with the farm and the eldest is currently studying for a degree in agriculture and intends to take over from us one day,” says Julian.

• All of our ice creams, McFlurrys and milkshakes are made using fresh dairy milk, and in 2003 we added fresh semi-skimmed organic milk bottles to the menu.

Huw Thomas, Helen and Julian George, John Dracup, Glyn Owen and Sara Downes. 6

THE FARMERS CLUB JOURNAL Autumn 2008 • www.thefarmersclub.com

• Further information about McDonald’s and its products can be obtained from David Thomas by emailing david.thomas@uk.mcd.com

Julian and Helen George

“There are modern pressures, but farming is still a great way of life and we’re proud of what we do. It would be good to hand it on to the next generation.” Ron Mounsey

www.thefarmersclub.com • THE FARMERS CLUB JOURNAL Autumn 2008

TAG CENTENARY • Rob King

The Arable Group has very strong reasons for celebrating 100 years of independence REAL INNOVATION is often born of need… and never has the need for advancement in agricultural technology and best practice been greater than it is now. Soaring nitrogen prices and rocketing fuel costs are hitting farm profits, but from where will the breakthroughs come?

TAG has already established independent trials looking at ways to reduce the use of vital inputs without reducing yields. As part of its New Farming Systems (NFS) project, researchers are engaged in trials such as inter-planting of nitrogen-fixing legumes into wheat crops, in a bid to reduce energy use in crop production by cutting fertiliser inputs.

A separate trust, The Morley Agricultural Foundation, was set up to manage residual assets of the Norfolk Agricultural Station. Today, TAG stays true to its predecessors’ fundamental aims, and guards its independence fiercely. With a total of 23 trial sites across the country, and close to 30,000 trial plots drilled each year, TAG is the country’s largest independent agronomy service. Around 18% of the UK arable area directly receives impartial and independent agronomic information through TAG.

In addition to its potential impact on farm input costs, this particular piece of TAG research has a long-term focus. By seeking to reduce hydrocarbon dependence and global warming potential, the project aims to deliver more sustainable agriculture and optimise farm margins. TAG’s ability to invest in such a long term view is unique; a product of the vision of those who have shaped its history.

The birth of modern independent farm trials took place at Little Snoring, near Fakenham, Norfolk. In 1908, Little Snoring was wide awake to the needs of British agriculture. Lord Hastings made it all possible by agreeing to lease 53ha to the newly formed Norfolk Agricultural Station without charge for eight years. In addition to rent-free land, Norfolk Agricultural Station needed to establish a means of funding that would provide working capital and protect its vital independent status. It relied upon loans, 8

Morley was to offer more than just a new home to the Norfolk Agricultural Station, though. In 1990, the Station adopted the name Morley Research Centre… a title which was felt to better reflect its wider aspirations. The aspiration to become a nationwide force for independent agricultural research was finally met in 2003, with the advent of TAG as a result of the amalgamation of Arable Research Centres and Morley. These bastions of farmer-driven innovation were able to boast an unrivalled wealth of experience in field trialling and agronomic advice, which came together under the banner of The Arable Group (TAG).

The Arable Group (TAG), which is celebrating its centenary this year, may well be the answer. Like its forefathers, the independent research group is seeking to address the big issues facing our industry through practical innovation.

Independent agricultural experimentation was a unique concept, conceived by the Norfolk Chamber of Agriculture and The Farmers Club in the 1880s. Prolonged depression at the end of the 19th century plus the now all-too-familiar problems of foot-and-mouth disease and a lack of wider strategic government investment in agriculture and rural areas - drove the need for change.

By the mid-1960s, finances were in place for another move. Sprowston was sold for urban development and, eventually, the Station relocated to Morley Manor.

As part of the New Farming Systems (NFS) project, which aims to reduce energy use in crop production, TAG is trialling inter-planting nitrogen-fixing legumes in wheat crops to cut fertiliser inputs.

donations and annual subscriptions… a system of funding which remains largely the same today, giving TAG the freedom to make a fundamental difference.

position and, as a result, the Station bought its first piece of land… the farm at Sprowston, which it had occupied for some 25 years.

In the intervening 100 years, locations have changed but the mission has remained the same; to produce and communicate independent, practical agronomic advice to progressive arable farmers.

Belief in its goals and ideals, and a growing sense of financial security, gave the Station’s governing body confidence to decline a Government invitation to become an integral part of the Ministry of Agriculture’s chain of Experimental Husbandry Farms.

A move to Newton St. Faith, just north of Norwich, in the early 1920s was short-lived. Lack of a suitable water supply proved a hurdle too high to overcome. But after a move to Sprowston in the mid-1920s, the Norfolk Agricultural Station put down roots and its reputation for sound field experimentation grew. During and just after World War II, British agriculture was in a strong financial

Looking back now, the day Norfolk Agricultural Station stood firm to its ideal of independence was a landmark in the development of British agriculture. As a direct result, TAG has the flexibility today to pursue research priorities set down by its members, rather than those laid out by those with a more commercial agenda.

THE FARMERS CLUB JOURNAL Autumn 2008 • www.thefarmersclub.com

The past century has seen huge change. When Lord Hastings agreed an eight year rent-free lease on his land, tractors hadn’t been invented, the nutrient balance in arable land was maintained by having livestock in rotation, and wheat was yielding an average 2.5 tonnes per hectare. The path of change has been made easier as a result of understanding based on independent research.

TAG members get independent advice on all issues affecting their agronomy decisions, from varietal recommendations to fungicide, herbicide and insecticide strategies. Practical advice ranges from drilling dates and seed rates to fertiliser usage, and from cropping patterns to establishment evaluation. The best way to evaluate TAG’s role in the 21st Century, perhaps, is to look at a snapshot of its work. The New Farming Systems (NFS) project is a pioneering project. Funded by The Morley Agricultural Foundation and The JC Mann Trust, it aims to tackle challenges posed by the current economic, environmental and political climate. The goal: to reduce energy use in crop production. Together, fertiliser and fuel dominate the energy inputs required to produce cereals. Recent Defra research shows fertiliser and fuel inputs account for 75% of the 2.46GJ of energy required to produce 1 tonne of conventional feed wheat… an amount of energy equivalent to that required to boil about 7,321 kettles. The NFS project is exploring several key themes, including tillage techniques which preserve soil structure and minimise compaction; management of soil fertility while minimising reliance on applied bagged nitrogen; compaction management and alleviation systems; cover crops and green manures; and strip tillage. Bagged nitrogen accounts for 53% of the energy required to produce feed wheat.

With that in mind, TAG is exploring the potential use of nitrogen-fixing legumes to build fertility. Wheat and legume bicropping is an option which is demonstrating substantial potential benefits, but it is not without its challenges. Robust research is vital if we are to address issues such as competition in the crop and inappropriate timing of nitrogen release, and TAG projects in this area are already yielding significant results. Funding is in place for five years, and in light of findings to date, TAG is set to broaden the scope of the project. It plans to extend nitrogen-fixing legume exploration to include a broader range of crops, to study an integration of tillage techniques, and to build on work into sustainable rotational systems. Flagship projects such as NFS underpin TAG’s ability to deliver independent, robust, practical advice to members. Its independent status harks back to its roots in Norfolk a century ago, and makes TAG uniquely able to take risks in research. By pushing back frontiers, it continues to develop pioneering systems and communicate practical, impartial advice. Some things are worth treasuring… independence is clearly one of them. • For further information about TAG contact Membership development Manager Rob King on 01285 652184 or rob.king@thearablegroup.com

The scope of TAG’s research today reflects the challenges facing our industry. It spans the abstract - for example, cultivation of novel crops for a changing climate - to the elementary, such as conducting extensive variety trials. It has a broad role in education, from complex PhD projects exploring phoma species which attack oilseed rape, to scholarships for undergraduate students designed to retain top calibre talent within the sector. Like its forefathers, TAG’s primary goal is the dissemination of robust, practical independent advice. The findings of its research enable TAG to continue developing innovative, profitable solutions for British farmers.

TAG provides independent agronomic advice to its members using information derived from the largest network of agronomic trials in the country.

www.thefarmersclub.com • THE FARMERS CLUB JOURNAL Autumn 2008

FALLEN STOCK • Michael Seals

Club member Michael Seals is Chairman of the National Fallen Stock Company (NFSCo). As with all NFSCo directors, he is a farmer, producing beef from a pedigree herd of South Devon cattle and cereals on 250 acres, plus contract farming, in South Derbyshire. Here, he outlines the work of NFSCo, explaining where it is now and its plans for the future.

The National Fallen Stock Company… where it is now and where it’s heading These are two key issues we are very conscious to address, through joint work with industry stakeholders and through research projects. NFSCo works very closely with key stakeholders in the industry, including renderers, levy bodies, breed societies, the NFU, and the devolved Governments. The hope is that, over time, developments such as specialist single rendering plants for pig and poultry and revenue-generating initiatives such as the sale of protein from these plants can be established to contribute to the costs of disposal. The company is also investing in research being conducted at Harper Adams University College into options such as bulk collections and on-farm storage as a means of keeping costs down, as the Government subsidy is gradually being phased out with no ongoing support likely after at the end of November 2008.

Michael Seals with his cattle

PAYING for the collection of fallen stock is not an area of expenditure which is welcomed by any farmer, as it equates to a double loss… the loss of the animal and payment for its disposal. However, it is an area of compliance which cannot be avoided, since the on-farm burial of fallen stock was banned several years ago by the EU Animal-By-Products Regulations.

paying collection contractors, and working closely with the collection and disposal industry on a day-to-day basis.

The National Fallen Stock Company (NFSCo) is a not-for-profit, farmermember-led organisation focused on delivering a national, reliable and low-cost service for the collection and disposal of fallen stock.

For example, the average rates charged by contractors for fallen stock collection in Northern Ireland fell from 1 June as a direct result of the local competition. Of the six active fallen stock collectors in the region, Ulster Farm and Foyle Protein have reduced their cattle collection charges in some cases by up to 13%, while sheep and lamb collections have been reduced by up to 16%.

The scheme is a true partnership between the industry and the Government. It is voluntary and designed to assist farmers and horse owners to comply with the legislation. Currently, there are more than 44,000 members in the UK and the average invoice value paid by farmers is about £40. Administration for NFSCo has recently been transferred from the Rural Payments Agency to Ian Potter Associates, which includes invoicing and processing payments from farmers, co-ordinating and 10

The central co-ordination aims to ensure a high degree of parity in the price of collections, stimulated in most regions by the healthy competition that a national service can create.

In some more remote regions - particularly in Scotland and Wales and, significantly, in the South and East of England - farmers do not benefit from the same level of competition and prices are higher than the national average. Also, for sheep farmers, the costs of disposal can be prohibitively expensive.

The research is being conducted as a twoyear MPhil degree by Marie Kirby and supervised by Carole Brizuela, a qualified vet and Senior Lecturer at Harper Adams. The first year of the research will identify the methods of disposal and rendering of animal by-products used worldwide, and will then assess which approaches might be applicable and cost-effective in the UK. In the second year, the project will explore specific novel methods for storage suitable for the UK. The work will run alongside work being conducted at Bangor on the science and economics of collection and storage. The hope is that both bits of work will offer some tangible solutions beyond those on which we are reliant at present. One significant aspect of the company is that all Government aid is directed to supporting farmers, the day-to-day work of the company being funded by members and collectors. Over the past three years the company has been able to establish a robust national service which works and benefits the whole chain.

THE FARMERS CLUB JOURNAL Autumn 2008 • www.thefarmersclub.com

Looking ahead, NFSCo is heavily involved in proposed changes to the Over 24 Month and TSE testing schemes, and last year acted as sole collector of animals during the foot-and-mouth outbreak. It is always available in the case of any outbreaks of notifiable diseases such as avian flu and FMD. A major challenge going forward for both NFSCo and the industry is to ensure that all farmers have available a service capable of delivering an affordable means of disposing of their fallen stock in a compliant manner. My fellow NFSCo Directors and I are all farmers, so we understand the issue of livestock loss compounded by the cost of disposal. However, in this world of increased scrutiny and pressure for ‘bestpractice’ farming, this is one area that, collectively, we just cannot avoid. • Michael Seals can be contacted by emailing michael.seals@farmline.com Further details about NFSCo can also be obtained from Ian Potter Associates on 08450 548888 or sales@ipaquotas.co.uk, or by emailing Jane Craigie at jane@janecraigie.com

At the opening of the new NFSCo offices (left to right): Bob Bansback, Sir Don Curry, Jason King, Eifion Evans, Ian Potter, Micheal Seals, Colin Carmichael and Jane Hill

Designed to help The National Fallen Stock Scheme was launched in 2004. It is voluntary and is designed to assist farmers and horse owners to comply with the Animal-By-Products Regulation, which prevents on-farm burial of fallen stock by providing a scheme which offers a reliable, low-cost means of disposal. The scheme is funded by farmer membership with collectors also making a contribution to running costs via a 2.5% levy. The Government supported the scheme to the tune of £4m in 2007, but this is reducing to £2m in 2008 and ceases in 2009. Sir Don Curry officially opened new NFSCo offices at Ian Potter Associates, Ashbourne, Derbyshire, in late April this year, following a seamless transfer of the administration of the company from the Rural Payments Agency. At the opening, NFSCo Chairman Michael Seals thanked the RPA for the job it did, adding that it was time to move forward. “NFSCo needs a bespoke service which will meet the needs of our increasing number of members and collectors,” he said. “The move to Ian Potter Associates and the creation of a new IT system has already improved efficiency and is on track to save our members £150,000 a year.” Sir Don described NFSCo as “an excellent example of partnership working between Government and industry in addressing a specific challenge”. The move would ensure fallen stock services were administered as efficiently and cost effectively as possible.

www.thefarmersclub.com • THE FARMERS CLUB JOURNAL Autumn 2008

WILTSHIRE FARMS VISIT • Don Gomery

Much to learn and talk about on Club visit to two Wiltshire farms

Richard Butler

Trailerload of members at East Wick, with Richard Butler on left

EIGHTY-PLUS Club members and guests spent a glorious May day visiting Lord Lansdowne’s magnificent Bowood House and estate, near Calne, Wiltshire, as reported in the Summer issue of the Journal. Nearly all stayed on for an equally exhilarating second day to tour the 700ha arable/dairy family farm of Club member Richard Butler and his son David, followed by, in the afternoon, the new 500-cow dairy unit of Tom Maidment. The day started with the visitors arriving by coach at Richard and David Butler’s East Wick Farm, Wooton Rivers, where they were welcomed the family. Richard explained that the business enterprise was split into two main parts… 680ha East Wick, run as a family farming partnership under the trading name of R J Butler & Son, and 612ha contract farmed by E W Contracting on behalf of five clients, making a total of 1,292ha. Enterprises across both businesses included 933ha of combinable crops

Club members in the barn at East Wick

(wheat, rapeseed, winter barley, spring barley, winter oats and spring beans); a 220-cow dairy unit producing some 2 million litres of milk annually, sold under contract to Waitrose; a 100-cow beef unit (Simmental, Hereford, Belgium Blue and Charolais Cross); 50 dairy heifer replacements; and residential property lets. As well as arable, the land is down to 116ha environmental set-aside, 110ha perennial ryegrass, 76ha forage maize, 35ha conservation downland and 22ha Italian ryegrass. Labour consists of two herdsmen, two arable workers, a general farm worker, and two harvest workers employed July to October.

Environmental adviser Gemma Batten

groups for a look round East Wick with talks and tours by Gemma Batten, ecologist for the North Wessex Downs AONB, and Bill Angus, senior wheat breeder for Nickerson/Advanta. Regrettably, space here doesn’t allow a full account of all that was seen and heard, though the accompanying pictures will, hopefully, convey some of the sights and atmosphere of a splendid morning. Needless to say, there was much to talk about over lunch at The Royal Oak, a 16th century thatched hostelry at Wooton Rivers, near Marlborough.

Dairy unit

Wheat breeder Bill Angus talking to members about new varieties

The dairy herd has an average yield of 9,424 litres per cow, at 4.2% butterfat and 3.2% protein. Current margin over purchased fees is 18ppl, or £1,803 per cow. Targets for 2008 included achieving an average yield of 9,500 litres per cow and passing the Waitrose audit. Following this introduction to the business, Club members were divided into two

Young stock are in the care of Tom and Molly Maidment and kept at Manor Farm until 16 - 20 weeks, when they are moved to a neighbouring farm until three months before calving. The aim is to get back numbers back to 500 cows. Consequently, with a target replacement rate of 20%, and no higher than 25%, the Maidment’s are looking to market surplus stock in the future.

Then, in the afternoon, it was off to see Tom Maidment’s 500-cow new dairy unit at Manor Farm, Wilcot. There, the party was split into smaller groups for presentations by herd manager John Bennett, who gave a tour of the unit, including its rotary parlour, while explaining the day-to-day operation; Mike Sandiford, of the George Vet Practice, Malmesbury, on all aspects of animal health at Manor Farm; Mark Gillingham (see front cover picture), of Courtyard Partnership, Swindon, on soils and grassland management; and William

Waterfield, of the Farm Consultancy Group, Newbury, on current production costs and the strategy needed to cope with future price increases. The Wilcot Herd of Pedigree Holstein Cattle numbered 475 cows, we were told, producing 4,4 million litres of milk annually for sale into the liquid market, with a bonus for level supply. The aim was to produce milk as cost-effectively as possible, using a system geared to maximise yield without adversely affecting herd longevity or fertility. The herd has 400 accessible grazing acres on a farm of 540 acres, with 360 acres grass and clover grazing leys, 80 acres of ESA and meadow land, 70 acres of forage maize, 60 acres of maize grown on contract, a further 45 acres of maize on rented land, and 80 acres of wheat grown on the Maidment’s own and some rented land.

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All in all, a most interesting and enjoyable day, with much to discuss on the coach journey back to Blunsdon House Hotel for dispersal… and a great deal to mull over way beyond that.

Mike Sandiford

Staff consists of four full-time workers (one English and three from the Philippines) and one part-time worker doing 25 hours a week. Feeding, milking, most of the AI, foot trimming and rearing of beef calves are carried out ‘in-house’. All field operations are contracted out.

Members make it to the top of the hill overlooking East Wick

View of East Wick

Costs of production at Manor Farm in March 2008 were given by William Waterfield as 13.47ppl, compared with 13.31ppl in December 07 and a budget for 2008 of 18.36. The March figure (with the 2008 budget in brackets) was made up of: concentrate feed 4.35ppl (6.44), labour 2.41 (3.14), vet/medicine 1.11 (1.21), AI/bull hire 0.10 (0.30), office/recording 0.21 (0.28), parlour 0.55 (0.77), forage 0.97 (1.63), bedding 0.28 (0.66), power and machinery 3.48 (3.93).

William Waterfield

Tom Maidment (left) talking to members

www.thefarmersclub.com • THE FARMERS CLUB JOURNAL Autumn 2008

Cows in the rotary parlour

CARBON-FRIENDLY FARMING • Chris Knock

Suffolk farmer Chris Knock is a Rural Development Manager with the East of England Development Agency. He used a Farmers Club Charitable Trust bursary to visit Brussels, Switzerland, Sweden and Germany at the end of 2007 to study the integration of carbon-friendly practicies into farming policies. Here is a précis of his report.

Integrating carbon-friendly practicties into

European sustainable farming policies We should not be afraid of the magnitude. For example, if globally we can reduce CFCs in the atmosphere and, thus, mend the ozone layer, then we can achieve a huge amount by working together towards the common goal… saving the planet.

DURING my Farmers Club bursaryfunded tour of Europe I visited Brussels to discuss the likely composition of the Climate Change Green Paper due out in November 2007 for discussion; visited Switzerland to gain an non-EU perspective of the climate change issues for agriculture; visited Sweden to understand just why it is so far ahead of the UK in the use of renewable forms of energy; and visited Germany to study how to successfully provide incentives to expand farm investment in bio-digesters. The wish to make definitive changes in these countries in how they operate is impressive. The common elements in how both to reduce the effects of, and adapt to, climate change will become apparent as you read on. Food security is back on governmental policy agendas; only Defra seems to deny the importacnce of this. The countries visited were selected as leaders. Indeed, they proved to be… and are willing to help other countries catch up or leap-frog to new positions of strength. The year 2008 promises to be that in which climate change will have a major effect on the future direction of agricultural policy in Europe. The science is accepted, and the mapping is now detailed enough for policy makers to structure future strategies which will both reduce climate change effects and also lead to significant changes in our behaviour as we have to adapt. This is perhaps the first global issue where it is possible for each individual to understand how his or her own actions can make a collective difference. It will be the truest test to see if humankind can literally change the world for the better. 14

Climate change will bring about a sea change in how our economies operate, with the likelihood, in future, of citizens being taxed on the carbon cost of their individual lifestyles. As sea levels rise, half of the world’s major cities are in increased danger of flooding. As stable climate patterns become erratic, the increased risk of localised drought and flood increases. Volatility is set to be the new world order. However, politically the world economy needs to remain stable, and so both local and world leaders have to strike a balance between making the right environmental adjustments while still maintaining the economic and social fabric of communities. The climate change debate is dominated by carbon. Not so for agriculture. Whatever the intensity of production systems, there is an underlying balance of carbon used and stored in soil, plants and products on one side, with the carbon cost of planting, nurturing and fertilising those crops. Thus, UK agriculture only accounts for 1% of UK carbon emissions, because the 7% carbon cost is nearly negated by a 6% carbon benefit. It is, therefore, a very achievable goal to bring UK farming into carbon balance. So, for UK agriculture, the main challenges are methane and nitrous oxide.

Methane emissions Methane is mainly emitted from waterlogged soils and bogs, and from livestock and livestock manures. The bulk is belched from ruminant animals… for the most part cattle, though sheep, goats and deer also figure. Small adjustments in feed ration formulation can alter the amount of methane produced, but, since that involves the extra use of expensive cereals, it is no panacea.

The whole point of the rumen as the first of four stomachs in ruminants is to act as a giant vat which allows cellulose to be digested, in the process of which methane is expelled. Consequently, ruminant animals fed high-cellulose rations of maize and grass will always produce methane, so the main way to limit this methane would be to keep fewer head of stock. Northern European countries, though, rely heavily on dairy and meat products in their diet, and so any meaningful reduction in total stock numbers will come from a societal change away from choosing animal and dairy protein sources. However, measures could be taken to make sure that as many unproductive ruminants as possible are culled. Methane from livestock manures can be utilised via anaerobic digestion. It can be reduced by covering manure stores, and promoting anaerobic rather than aerobic forms of decomposition in the heap before the manure is spread and quickly incorporated in the soil. The technology may be developed to scrub methane from the ventilation air expelled from pig and poultry units. Nitrous oxide is produced naturally in soils through the microbial processes of denitrification. These natural emissions of N2O can be increased by a variety of agricultural practices and activities, including the use of synthetic and organic fertilisers, production of nitrogen-fixing crops, cultivation of high organic content soils, and the application of livestock manure to croplands and pasture. All of these practices directly add additional nitrogen to the soil, which can then be converted to N2O. Consequently, the world needs to adopt innovative land management practices to kerb N2O emissions, such as planting cover crops and minimum tillage. Converting land to less intensive uses will not be possible if the world has to feed itself. From Brussels – EU compulsory modulation is set to rise considerably, to fund a new climate change policy. A lot of emphasis will be placed on risk

THE FARMERS CLUB JOURNAL Autumn 2008 • www.thefarmersclub.com

management plans and introducing flood and drought insurance. For agriculture, the greenhouse gas (GHG) issues are methane and nitrous oxide. EU targets are for agriculture to half methane emissions and reduce nitrous oxide emissions by 70% by 2020. Methane is best tackled by using it, not emitting it, so comprehensive use of biodigesters (anaerobic digestion) will be promoted. Livestock numbers will decrease, mainly by penalising the keeping of unproductive cattle and sheep.. Animal rations will be adjusted. Manure stores will be covered. Nitrous oxide emissions will be curtailed by farmers cultivating less land and putting on less nitrogen fertiliser. There might be rotational rules added to cross compliance… for example, only cultivating two years out of four. There will be increased interest in clover and legume catch crops to fix nitrogen from the air for fertilising succeeding crops.

Water needed Biomass planting - trees, short rotation coppice, miscanthus - will be grant-aided for several reasons… the extra sequestration from perennial crops, the carbon they store, the soil they protect, the energy they yield, but also, because they are perennials, then no annual cultivations take place, so saving nitrous oxide emissions. The only caveat will be they will need to be situated where water availability is secure. From Switzerland – Climate change is affecting farmer’s ability to produce now due to freak weather events, so the gradual increase in temperature over the next 20 years is not seen as so relevant. Risk management plans, coupled with increased insurance, will be key in the future. Organic farming is not the solution for two reasons. It lowers our productive capacity, and it excludes effective tools which will be very necessary to have available as the weather effect grows. The arable solution is precision farming. The way to reduce GHG emissions is to move the soil less, and promoting ley crops and perennial crops achieves this. For the next 20 years, market price fluctuations and the global liberalisation of trade will have more effect than climate change on farm incomes. In 20 years time, technological solutions will mean that we will use a third of the energy we do now to produce the same or even more.

The fantastic roof top cupola on the Berlin Reichstag designed by our very own Lord Foster, which reflects light down into the debating chamber so they don’t need to put on the lights.

From Sweden – Perhaps ‘local’ is better than ‘organic’. If a national climate change advice system were to be introduced, maybe each farm would have a GHG audit. Risk management and insurance will be major parts of climate change policy in the future. Climate change policy needs to be an integral part of the overall national energy policy. The ‘Focus on Nutrients’ programme, which has run for the past six years, has been a very effective way of reducing nitrogen and phosphate pollution. Part of the global methane solution should be for us to eat more vegetables and a little less meat. The approach should be improved citizen health via a better diet. The EU Commission report on ‘Making Sweden an Oil-free Society by 2020’ is highly regarded and has cross-party support. Sweden is a world leader in biofuels, with 28% of energy now coming from that source, and is willing to export its expertise. The country has large-scale housing developments using 30 kilowatts per square metre of energy, which compares well with the UK average of 200! From Germany – When we plough we should plough deeper to increase the carbon sink capacity of the soil. Germany needs to produce more. It feels an ethical obligation to produce more to be able to send excess production to other EU states where climate change will affect their ability to grow even sooner.

living… that the world wide web has changed societal attitudes to who benefits from accessible information. The success of nations, and sectors within nation states, in the world today is not driven by access to new and original information and technologies, it is driven by their ability to access freely available global information to adapt processes already working in other countries. My overall conclusion is that the UK is way behind our European cousins in adopting climate friendly agricultural practices, due, in the main, to the masking effect of North Sea Oil on Government thinking. But there is absolutely nothing stopping us from catching up fast, not by developing our own solutions but by buying in those that have already been proved to work.

Inventive solutions It might be highly original to be inventive and our place in the recent history of the world as the seat of the industrial revolution might steer us towards inventive solutions - but pragmatically the most innovative stance for us to adopt at this moment in time is to utilise the existing continental solutions as we adapt our agricultural practices. Who will seize the moment? Farmers themselves might move faster than Government. There’s nothing wrong in that.

The science behind biofuels is dubious; what is sustainable in the longer term is biogas production from biodigesters.

What will happen by 2020? Farming can become carbon neutral, remain highly productive in the middle of the field to provide over three quarters of the food the nation needs, increase the quality of habitat around the field edges, and make serious inroads into reducing methane and laughing gas emissions.

The information made freely available to me on this trip highlights one of the most underutilised aspects of modern day

• Chris Knock can be contacted at chrisknock@eeda.org.uk or by calling 01449 770932.

If Germany were to sum up its new policy in three words they would be “environmentally-friendly intensivication”.

www.thefarmersclub.com • THE FARMERS CLUB JOURNAL Autumn 2008

CUTTING INCOME TAX • Susan Shaw

Recent price increases for farm produce mean that producers face a potentially larger income tax bill at the end of the year. It is becoming increasingly difficult to reduce income tax liability without a large cash spend, but Susan Shaw, tax director and head of agriculture at accountants and investment management group Smith & Williamson, explains how to get the basics right.

Important to go back to basics in order to cut income tax bills The next step is to try and use as many basic rate tax bands as possible. This will mean that income tax is charged at 20%, rather than the higher rate of 40%. Even if only a proportion of the profits are shared in order to qualify for the lower tax rate, this will still create a saving. It is important to note, however, that HM Revenue & Customs is examining the issue of income shifting, so this method of tax relief may not be available in the future. But, for now at least, it is still regarded as effective tax planning.

THE MOST fundamental tax-planning advice, and perhaps the simplest to implement, is to ensure that all involved in a farming business use their basic rate tax band, which is up to £40,035 for 2008/09, including a tax-free personal allowance of £5,435.

Averaging profits. Farmers’ averaging was introduced to give some relief from the adverse effects of fluctuating profits. In certain circumstances, where the difference in farming profits over two consecutive years is 30% or more than the higher of the two profit figures – irrespective of whether the difference is an increase or decrease – the profits for the two years may be averaged for those years to help farmers stay outside the 40% tax band. Payments on account. The way selfassessment to tax works means that payments on account for the current year’s taxation are made using the previous year’s liability as an estimate. Therefore, many

farmers may have made two payments on account on 31 January and 31 July 2008 and will have a large balancing payment on 31 January 2009. This large balancing payment will be due at the same time as the first payment on account for the 2008/09 tax year. The result may be the equivalent of 18 months’ tax. Given the increased cost of inputs in the current year, it is not anticipated that profits will be as high in 2008/09. Taxpayers have the option to reduce the payment on account and this should be considered in order to ease cash flow.

pension schemes

business year-end was September 2008, this is assessable in the 2008/09 tax year and, therefore, contributions would need to be made before 5 April 2009.

this year, the Government is conducting a further consultation with the intention of including legislation in the Finance Bill 2009.

Pension funds can be self-invested and used to invest in farmland and buildings. Therefore, they are a useful way of getting tax relief on any land and building purchases.

The new rules, depending on their severity, are likely to have a substantial effect on the distribution of profits in both partnership and companies. The principle is that husbands and wives will have to record their contributions to the business separately and be paid the market rate for their work.

Beware the Government’s new restriction on tax losses. Legislation has been introduced in the Finance Bill 2008, effective from 12 March 2008, which will restrict the loss relief available to individuals. The Government is seeking to attack individuals who spend an average of less than 10 hours per week personally engaged in the trade with the view to realisation of profits. Therefore, if it is thought that the trade will create a loss, it would be wise to keep records to prove that 10 hours per week have been worked so that these losses may be used against other income. Looking to the future. The topic that has been at the forefront of recent discussions is income shifting rules for family businesses. Although we have been given a reprieve as the rules were not implemented

The implications of this would be far reaching. It would mean that share structures and salaries would have to be reconsidered in companies, as it is expected that dividend distributions will be included in the legislation. It is important that any plans to introduce family members into a business is done sooner rather than later in order to have structures in place before this legislation is introduced. • Susan Shaw can be contacted at Smith & Williamson by calling 01722 411881 or by emailing susan.shaw@smith.williamson.co.uk

Investing in retirement. Paying into a pension is an effective way of deferring tax liability, although it does cost more in cash flow terms. Tax relief of up to 40% can be claimed on pension contributions as long as they do not exceed 100% of savings or £235,000, if lower, for this tax year. Any pension contributions need to be made in the same tax year as when farming profits are assessable. For example, if the

THE FARMERS CLUB JOURNAL Autumn 2008 • www.thefarmersclub.com

www.thefarmersclub.com • THE FARMERS CLUB JOURNAL Autumn 2008

U30 TOPIC • Andrew Vickery

U30s • Lizzie Benson, Chairman; Luke Paterson, Vice-Chairman; MaryAnne Salisbury, Secretary

What are the practical implications of changes in agricultural taxation? The key is that relief on the full amount spent will be available over time, but the timing of this relief will now vary significantly.

various affects At one end of the spectrum, those that spend the most - such as contractors and large arable units - will find that tax increasingly becomes a burden as their allowances are restricted, whereas smaller farms spending no more than the £50,000 threshold in most years will find that their taxable profits vary considerably as a result of the 100% first year allowance, together with the tax liabilities. Andrew Vickery

FOR THOSE involved in the farming industry the past 12 months have seen some of the most significant changes to the tax regime for many years. These were not immediately obvious at the time of their introduction, but many will now be starting to feel the full effects, particularly with the current volatile markets for agricultural commodities and rising input prices, notably for fuel and fertiliser.

capital allowances The changes to Capital Allowances, which came into effect from April 2008, that will have the greatest impact will be on those that invest significant sums in plant and machinery for use in their businesses. Prior to this point, all purchases of plant and machinery in the majority of farming businesses have qualified for a 50% first year allowance, meaning that half of the amount spent could be written off against taxable profits in the year of purchase, with the remaining half being written off gradually over the following years. Under the new tax regime, the first £50,000 spent in any one year qualifies for 100% write off in year one, with a 20% allowance for any excess spent. Any balance not written off in that first year is then written off by 20% in subsequent years, compared with 25% previously.

Businesses which spend, on average, more than £133,000 on plant and machinery will be worse off under the new regime in the first year. More detrimental for most businesses will be the demise of Agricultural/Industrial Buildings Allowances. Prior to April of this year, investment in farm buildings – including most grain storage, cubicle and covered yards for livestock - would be written off at 4% per year, so that the whole cost would be written off over a period of 25 years.

phasing out That in itself was not particularly generous, but at least investment could be made knowing that tax relief would be available in full over time. However, these allowances are now to be phased out and no write off will be available after April 2011. In effect this is retrospective taxation (or perhaps retroactive is a better description), as those that invested in good faith, expecting to receive the full relief over time, are now having this removed. This will affect businesses that have put up agricultural and industrial buildings over recent years and will almost certainly lead to higher tax liabilities as a result.

taking action So what can be done? In the arable and dairy sectors, farm profits were, in many cases, particularly strong for the 2007/08 accounting year, which

reflected stronger harvest prices for the 2007 harvest and at least an element of the higher milk prices available from around October 2007 respectively.

Chairman’s Jottings As I write at home at the end of August, the changeable weather is making it all the more challenging to finish combining. We are about to head into the autumn calendar of events and I can’t believe how quickly the year is going. We have two dinners and a farm walk planned, all open to Under 30s members and their guests.

Super summer Pimms Evening brings out best of banter between Under 30s BRITISH summer just wouldn’t be the same without an evening of Pimms in the sunshine, and the recent Farmers Club Under 30s Pimms Evening yet again delivered on cue.

On Friday 17 October we head to Gloucestershire for our Autumn Farm Walk. We will be visiting Stowell Park Estate, situated in the Cotswolds near the village of Yanworth, which is a traditional agricultural and sporting estate with a large farming operation.

Farmers’ Averaging

Cheltenham beckons on Saturday 18 October for an afternoon of racing at the start of the National Hunt jump racing season. Then, after a gentle start on the Sunday morning, we will be visiting the Cotswold Ice Cream Company for a tour of the dairy, ice cream factory and tasting of the ice creams.

The Club served up some great British fare for dinner; with a summer vegetable salad for starter, British lamb served with the kidneys as the main course (I wasn’t forced to eat the kidneys as, luckily, my mother wasn’t looming in the background, but I was assured they were delicious) and a summery strawberry mousse tart for desert.

I am sure it will be a very varied and interesting trip based at the Redesdale Arms Hotel, in the historic market town of Moreton-in-Marsh. For more details please contact MaryAnne Salisbury on 020 7930 3751.

As with any good function, the best socialising can always be found on the bar balcony – well, we weren’t allowed in the kitchen – and farmers and grain traders supplied the perfect banter to keep the laughter and drinks flowing.

Where it is likely that profits will be lower, there may be scope to reduce payments on account accordingly, providing a welcome cash-flow advantage. Although tax should never be the primary consideration when making business decisions, there may be some simple options – such as making pension contributions and bringing forward repair expenditure – to save tax in the most efficient manner.

I look forward to enjoying your company at these autumn events. Lizzie Benson

Jane Nixey

It could not have been planned for a better night in London, as it was held on quite possibly the only summer evening this August was going to offer us. With a scattering of 20 guests, the evening really had an exclusive ‘club’ feel, allowing the group to inter-mingle more than I have experienced at other FC events.

This will leave many farms with a balancing tax liability in January 2009 for sole traders and partnerships, but difficult 2008 harvest conditions and higher input prices make the current year look more challenging for most.

It may be that Farmers’ Averaging can be used to eliminate any higher rate tax liabilities (of 40-41% for individuals) and, where higher payments on account for the 2008/09 tax year fall due in January and July 2009, based on higher 2008 results, anticipated farm profits for the current year should be considered carefully.

I’m often asked if there is a ‘Nearly Under 30s’ section within The Farmers Club. With my time fast approaching, I hope it’s considered soon.

All round, I cannot thank Lizzie and the events’ team enough for their tireless efforts in continuing to promote the Under 30s section of the Club and running really enjoyable events for us all.

Where investments in new buildings are planned, consider using Self Invested Personal Pensions (SIPPs), for example, to make the expenditure as tax-efficient as possible.

costs increasing At a time when many farming businesses are undertaking considerable investment, and the cost of borrowing is increasing, don’t suffer paying tax on hard-earned profits unnecessarily. There is a wide variety of potential options to save tax, but the key is to plan ahead and get proactive advice to find the best solution. • Andrew Vickery is an agricultural accountant with Old Mill Rural Services and can be contacted through the Exeter and Yeovil offices, respectively, on 01392 214834 or 01935 709315.

THE FARMERS CLUB JOURNAL Autumn 2008 • www.thefarmersclub.com

Future Events Friday 17 - Sunday 19 October Autumn Farm Walk Gloucestershire

www.thefarmersclub.com • THE FARMERS CLUB JOURNAL Autumn 2008

RAMBLINGS • Stephen Skinner

No slacking during summer closure as work continues behind the scenes THIS is a time of contrast for the Club. While the summer break brings with it an inevitable downturn in members using our facilities, Greg, our handyman, and many others, have been working hard to complete the much needed refurbishments that have been planned. I have to say that, while the timetable has not gone exactly to plan, I am pleased with the results. Six bathrooms have been extensively refurbished; the kitchens and three corridors have been redecorated; the Shaw Room has been ‘revamped’; and the Bar has been given something of a ‘makeover’. This is not all that has been completed, but certainly covers the major elements. However, it’s not just I that have to be pleased with the outcome… it’s members’ views that are important. Consequently, I would welcome your feedback.

Outlook 2009 Seminar The Guild of Agricultural Journalists Charitable Trust - which provides confidential financial assistance to journalists in need - will be holding a seminar, entitled ‘Outlook 2009’, at the Club on Wednesday 29 October. Aimed particularly at agricultural sales, marketing and PR managers planning for 2009 and beyond, it will be chaired by Trust Chairman Stephen Howe and feature two notable speakers: Allan Buckwell, Chief Economist at the CLA, and Norfolk farmer and Farmers Weekly columnist David Richardson. Alan will provide a macro economic outlook, covering world trends in agriculture and the likely impact of political interference (such as the CAP Health Check and US Farm Bill). David will consider the practical implications and farmers’ reactions to movements in world commodity markets. The seminar will start with a buffet lunch at 12.30pm, followed by the two presentations and a discussion. Tickets cost £125 from GAJ Trustee Wendy Ryder, who can be contacted at wendy@lancer.enterprise-plc.com or by phone on 01473 251991.

Two splendid events TWO EVENTS of the recent past have been of note… The Farmers Club Reception at the CLA Game Fair at Blenheim Palace and the Honorary Members’ Lunch here at the Club. The Game Fair projected a very clear image of quality from top to bottom, and, while the weather was glorious, it was a real pleasure to see so much of what was on offer. In the CLA enclosure we managed to attract around 60 of our members and their guests for drinks on the Saturday evening. This proved to be a very workable format and all who attended seemed to enjoy themselves. The Honorary Members Lunch brought together a wonderfully eclectic grouping with, as you would expect, enormous experience. Once again, the feedback was, almost unanimously, positive, and there is no doubt that I learned much! 20

THE FARMERS CLUB JOURNAL Autumn 2008 • www.thefarmersclub.com

www.thefarmersclub.com • THE FARMERS CLUB JOURNAL Autumn 2008

Thanks from our Super Six ladies YOU will recall, I hope, our ‘Super Six’, who ran in the Race for Life around Regents Park on behalf of Cancer Research, as reported in my Harvest Journal Ramblings. To all those who so generously donated money, thank you very much indeed. While the money is still trickling in, our ‘Super Six’ have raised just over £1,100, which is an outstanding effort.

Wottalottawelly FINALLY, it would be remiss of me not to mention ‘Welly Week’! This is a fundraising campaign for RABI and is taking place between Saturday 11 and Saturday 18 October. There are a myriad of events planned, from Welly Raft Races to Welly Discos to, of course, Welly Wanging. Full details can be found on-line at www.rabi.org.uk 21

Club Information & Diary Dates

THE FARMERS CLUB

The Secretariat 020 7930 3751

THE FARMERS CLUB Over 160 years of service to farming 3 Whitehall Court, London SW1A 2EL

Patron – Her Majesty The Queen

THE FARMERS CLUB CHRISTMAS CARD 2008

NOTICE OF THE ANNUAL GENERAL MEETING

LAST year’s cards were extremely popular so we have selected another winter scene from the same wildlife artist, Robert E. Fuller from Thixendale in North Yorkshire. The card, which measures 219 x 153mm, is printed with the Club crest and the greeting “With Best Wishes for Christmas and the New Year”.

NOTICE is hereby given that the One Hundred and Sixty-sixth Annual General Meeting of The Farmers Club will be held at 3 Whitehall Court, London SW1A 2EL, on Wednesday 10 December 2008 at 12 noon. 1. Minutes To approve the Minutes of the One Hundred and Sixty-fifth Annual General Meeting of the Club.

Surplus on the sale of the cards will be donated to The Royal Agricultural Benevolent Institution, the national charity in England, Wales and N. Ireland dedicated to helping members of the farming community facing hardship.

2. Accounts To present the Annual Report and audited Accounts of the Club for the year ended 30 June 2008.

The card is available in packs of 10 and may be ordered from Reception or the Secretariat. The price per pack is £8.00, the same as last year, including VAT ‘Givendale Geese’ and postage (UK only) for up to 50 cards. Orders of 60 cards or more will be charged a supplement of £2.00 for postage. Please place your order quickly to avoid any disappointment. Members are requested, if possible, to collect them from Reception as this will save postage and result in a larger donation to RABI.

Christmas Card Order Form

✁

To: The Secretary, The Farmers Club, 3 Whitehall Court, London SW1A 2EL Please send me …………....packs of Christmas Cards at £8.00 per pack of 10 I will collect the cards from Reception on ………………(approximate date if known) I enclose a cheque for ……………………….payable The Farmers Club (add £2 postage for 60+ cards) PLEASE COMPLETE IN BLOCK CAPITALS

Address

Post Code

(b) To elect the Vice-Chairman for 2009. The Officers and Trustees recommend that Mrs N J Quayle takes office as Vice-Chairman from 1 January 2009. (c) To elect the Honorary Treasurer for 2009. The Committee recommends that Mr P M Heygate be re-elected as Honorary Treasurer of the Club to take effect from 1 January 2009. 4. Committee To declare the members newly elected to serve on the Committee from 1 January 2009. 5. Auditors To appoint the Auditors for 2009. The Committee recommends that haysmacintyre continue in office.

Name

Tel.No

3. Officers (a) To elect the Chairman for 2009. Mr J K Reynolds held office as ViceChairman for 2008 and the Officers and Trustees recommend that he takes office as Chairman from 1 January 2009.

S N Skinner Secretary by Order of the Committee October 2008

THE FARMERS CLUB JOURNAL Autumn 2008 • www.thefarmersclub.com

VICE PRESIDENTS John N Harris OBE MC, Peter Jackson CBE Roddy Loder-Symonds, Sir David Naish DL

Club Information 020 7930 3751

John Parker THE COMMITTEE OF MANAGEMENT OF THE CLUB FOR 2008 PRESIDENT AND CHAIRMAN Julian Sayers

Further information is available on The Farmers Club Website: www.thefarmersclub.com

• There is a Club jacket and a selection of ties at Reception which may be borrowed in an emergency.

To register for the Members’ Area enter your membership number as shown at the top of the address label on your Journal envelope.

• Ladies should be dressed conventionally. Trousers are permitted but not casual slacks, jeans or trainer shoes.

Obituaries

• Weekends: smart casual but no jeans, t-shirts, rugby shirts or trainers.

It is with regret that we announce the death of the following members:

• Children should conform with the above guidelines.

N J M Anderson Dr D E Hathway Mrs V M Pacey L J Wright MBE

• Members must advise their guests of the dress regulations.

Wiltshire Gloucestershire Lincolnshire Suffolk

Envelopes Sponsorship The Farmers Club would like to thank Monsanto for their continued sponsorship of the Journal envelopes. Monsanto is an agricultural company focused on applying innovation and technology to assist farmers around the world to be more successful. For information about the company, visit www.monsanto.co.uk.

IT facilities Reception can provide members with a password to use the Club’s wi-fi circuit and to access the pc in the IT Room. Laptops must not be used in the Lounge but are now permitted in the Shaw Room, adjacent to the bar. Their use is restricted to single users only and must not be used in conjunction with a meeting.

Parking Dress Code Members are requested to advise their guests of the following: • Gentlemen must wear formal jackets and ties. Polo-neck jerseys, jeans and trainer shoes are not acceptable. Between 1 June to end of September, Gentlemen will not have to wear jackets at breakfast.

The Club has no private parking at Whitehall Court and metered parking in the immediate area is extremely limited. The nearest public car park, open 24 hours a day, is situated in Spring Gardens off Cockspur Street, approximately five minutes walk from the Club. Telephone: 0800 243 348. The Congestion Charge can be paid at this car park.

TRUSTEES Mark Hudson (Chairman), Barclay Forrest OBE Mrs Susan Kilpatrick OBE, Norman Shaw CBE VICE-CHAIRMAN John Reynolds HONORARY TREASURER Paul Heygate IMMEDIATE PAST CHAIRMAN Tony Pexton OBE COMMITTEE Elected 2003 Richard Holland (Chairman Membership SubCommittee), Julian Madeley Elected 2004 Ian Lindsay, Mrs Jill Willows Elected 2005 Charles Notcutt OBE, Mrs Nicki Quayle Elected 2006 Stewart Houston CBE (Chairman House SubCommittee), Meurig Raymond MBE Elected 2007 Tim Bennett, Mrs Anne Chamberlain, James Cross Richard Harrison, Campbell Tweed OBE Mrs Teresa Wickham (Chairman Journal & Communications Sub-Committee) Elected 2008 The Reverend Dr Gordon Gatward OBE Jimmy McLean, David Richardson OBE, John Wilson Co-opted Miss Lizzie Benson (Chairman Under 30s) Luke Paterson (Vice-Chairman Under 30s) THE FARMERS CLUB CHARITABLE TRUST TRUSTEES John Kerr MBE JP DL (Chairman), James Cross Stephen Fletcher, Dr Tony Harris CBE Mrs Stella Muddiman JP, The Chairman and Immediate Past Chairman of the Club (ex officio) Chief Executive and Secretary Air Commodore Stephen Skinner Deputy Secretary Robert Buckolt Club Chaplain The Reverend Nicholas Holtam 020-7766 1121

Diary Dates 2008-2009

Secretariat 020-7930 3751

These diary dates are reviewed for every Journal. Please read them on each occasion, as they are sometimes revised and additional dates included. Details of events circulated in the previous issues are available from the Secretariat at the telephone number shown above.

Accounts 020-7925 7101

Lunch in the Club with a visit to the Churchill Museum and Cabinet War Rooms Friday 5 December Application form was in Harvest Journal Annual General Meeting Wednesday 10 December at 12 noon in the Club Oxford Farming Conference Mon 5 – Wed 7 January 2009 Go to www.ofc.org.uk for information

Theatre Visit and Supper in the Club Friday 23 January 2009

Membership 020-7925 7102 Bedroom & Dining Room Reservations 020-7930 3557 Private Function & Meeting Room Reservations 020-7925 7100 Personal calls for members only 020-7930 4730 Fax 020-7839 7864

St. Patrick’s Day Dinner in the Club Friday 20 March 2009

CLUB CLOSURES 2008/09 Monday 22 December – no afternoon tea, bar or dinner 3.00pm Tuesday 23 December to 3.00pm Monday 5 January 2009 5.00pm Thursday 9 April to 8.00am Tuesday 14 April 2009

Autumn 2008 www.thefarmersclub.com • THE FARMERS CLUB JOURNAL Autumn 2007

E-mails secretariat@thefarmersclub.com accounts@thefarmersclub.com membership@thefarmersclub.com functions@thefarmersclub.com meetings@thefarmersclub.com reception@thefarmersclub.com u30s@thefarmersclub.com Website www.thefarmersclub.com THE FARMERS CLUB JOURNAL Editor and Advertisement Manager Don Gomery 01892 610628 Email: don.gomery@btinternet.com Printed by Pureprint Group , Brambleside, Bellbrook Park 23 Uckfield, East Sussex TN22 1PL Tel: 01825 768811