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Scottish beef producers to suffer under new CAP reforms
two cows
Around 20 per cent of farm businesses already making a loss are likely to see greater losses under the new reforms.

New regime will also impact Scottish dairy farms

Most Scottish beef farms will suffer financially under the new Common Agricultural Payments (CAP), research by Scotland’s Rural College (SRUC) has found.

The new regime will also have an impact on Scottish dairy farms. Yet it is the world market price for milk that will have a more direct effect on future viability.

The research briefings put together by SRUC’s Rural Policy Centre and will help to inform policy makers.

In the study, researchers used details from the Scottish Farm Accounts Survey, together with data from Quality Meat Scotland. They also carried out a survey with farmers, examining their reactions to various scenarios.

The data was then processed through ’Scotfarm’, SRUC’s own economic computer model, which produced a optimised net profit for each farm.

“We considered farm level performance before the new reforms and compared that with farm performance post-reform,” says SRUC senior agricultural economist Steven Thomson. “Whilst the model did not allow for the five year transition process, we believe the results offer policy makers a good indication of the long-term effects on key enterprises.”

Scotfarm found that specialist beef producers are most affected, predicting that over three-quarters of the FAS businesses would be in a worse position. Of these, around a third are expected to suffer reduced profits, while another this would move from a profit to a loss.

Furthermore, around 20 per cent of farm businesses already making a loss are likely to see greater losses under the new reforms. Just 13 per cent of farms, on more extensive systems, are predicted to make a profit.

When asked about their intentions, farmers indicated that if they experienced a 25 per cent increase in payment they would enlarge their herds. However, the same intention survey suggests that faced with a 25 per cent cut in subsidy payments, over half would decrease their livestock numbers.

“It will be important to consider the future resilience of the sector with so many farms predicted not to show a profit,” comments Steven Thomson. “With lower support payments we believe that the sector will become increasingly polarised as farmers respond by either focussing on environmental support and reducing herd sizes, or simply become more intensive.”

The majority of dairy farms in Scotland are also expected to have reduced levels of profitability. However, CAP support represents a lower proportion of incomes in the sector. Researchers say it is the future volatility of the milk price and input costs that will have a greater impact on long-term viability.

Even so, dairy farmers stated a reluctance to maintain expansion plans under a reduced CAP support regime. They suggested that support payments still have an influence on decision-making in the dairy sector, particularly following falls in the world milk price.

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Free CPD announced for BVNA members

News Story 1
 Zoetis is to present a CPD event for free to members of the British Veterinary Nursing Association (BVNA).

Led by veterinary consultant Ruth Moxon, the one-hour online session is designed to help veterinary nurses discuss parasiticide options with clients. It will advise on structuring recommendations, factors for product choice and moving away from 'selling'.

'How do you recommend parasite treatments to your clients?' will be presented on Tuesday, 20 May at 7.30pm. It is free for BVNA members, with 15.00 tickets for non-members.

Veterinary nurses can email cpd@bvna.co.uk to book their place. 

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BBC Radio 4 documentary addresses corporate fees

BBC Radio 4's File on 4 Investigates has released a documentary exploring how corporate-owned veterinary practices may be inflating bills to increase profit.

Released on 15 April, 'What's Happening To Your Vet Bills?' revealed the policies which many corporate groups have in place to increase their profits. This included targets and upgrades which veterinary teams are tasked with meeting on a regular basis.

It also features Anrich Vets, an independently-owned practice based in Wigan. Following the case of Staffordshire terrier Benjy, who is diagnosed with a tumour, the documentary shares how the team were able to offer contextualised care and advice to make the procedure as affordable as possible for his owners.

The documentary can be heard on demand on BBC iPlayer.