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When urbanites talk about farming the main topics usually are food production and the beauty of the countryside – or the increasing lack thereof. What’s rarely discussed are farm finances, isn’t that for the individual farmer to work out? Not quite. Since Brexit, farming and farmers in Britain have to adjust to the most radical changes in decades. Many not only face an uncertain future, their survival is at stake.
A recap: While Britain was an EU member, farmers received money under the Basic Payment Scheme (BPS) which was part of the Common Agricultural Policy, CAP. The British government is continuing to pay farmers, but the sums paid out per hectare are gradually reduced: this year, payments are down by 50%, and in 2027 they will end. BPS is to be replaced by ‘public money for public goods’ and the three tier Environmental Land Management scheme, ELMs. Relevant for most farmers is only the first tier, the Sustainable Farming Initiative, SFI. In June, the government finally published a 150-page handbook[1] that specifies how much money farmers[2] can receive for which measure and under what conditions. The application period to join individual schemes began in September.
A changing system is short-changing farmers
Policy changes such as ELMs do not affect all farms in the same way: large farms with lots of arable land will likely have more options than small upland and hill farms. Hardest hit are tenant farms who can take few decisions without getting permission by the landowner.
For hill farmers, up to 95% of farm income previously came from the BPS, on upland farms where the climate is not quite so rough and pasture quality is better, direct payments made up between 30% and 60% of farm income. How will these farmers cope with the shortfall? How much can be replaced by SFI schemes? The British government advises farmers to diversify to generate more income – how would that look like in practice on an upland farm? In July, I and my (photographer, driver) husband went to Northumberland to find out.
In summer sunshine, with cumulus clouds drifting overhead, the scene couldn’t be more peaceful and idyllic. Rolling hills, dotted with grazing sheep and cattle, the pastures still separated by traditional stone walls, hedges sheltering old farm houses and barns from the wind. To the north lies Scotland. In the west, the Cheviot Hills, the Northumberland National Park and the North Pennines are destinations for hikers and long-distance walkers. With much of the land still owned by landed gentry, the Duke of Northumberland alone owns nearly 50,000ha /120,000 acres[3], most of the farmers here are tenants.
Sunday night dinner and the lay of the land
David Stanners and his wife Annabel farm near Risdale, a village about 20 km north of the market town of Hexham. I got in touch with the Stanners through the NFU (National Farmers Union) Upland Forum, David is one of the Forum’s committee members. That evening, Annabel had booked a table at the Gun Inn in Risdale and invited three fellow tenant famers, friends and neighbours to join us. There is Michael Walton and his wife Julie, a long-time community nurse studying at present for a level 7 exam which is the equivalent to a masters’ degree. For Graham Robson and his wife Lindsey it is the first evening out since they had their baby daughter, nine weeks ago. Nigel Moore came on his own because his wife had to look after an elderly relative who just had a hip replacement. Scheduled surgeries such as this can be done in the urgent care facility in Hexham, but the maternity ward there has recently closed down and the nearest hospital with an Accident and Emergency unit is 50 kilometres away. “The social care crisis is getting worse and worse”, says Julie Walton.
The nearest schools are in Bellingham, a village 9 km to the west. A school bus picks the kids up, but from autumn, Annabel’s and David’s daughter Isabel will attend a school in Hexham. She will be picked up by a taxi that delivers her to the nearest stop for the school bus.
Risdale has no shop. The pub stood empty for quite some time until it was saved through a crowdfunding campaign. Bellingham has a Coop supermarket, but for most of their shopping, and for all after school activities for the children, medical appointments and other services, the farmers have to drive to Hexam. There is no public transport to speak of – the bus stops in Risdale once a week on a Saturday. Roads are narrow and as we find out the following day, road closures for maintenance work can lead to long, time consuming detours. There are large areas with no mobile phone coverage. This lack of infrastructure is not just inconvenient, it also limits options for diversification: farmgate sales or running a farm shop don’t make sense if few customers are ‘nearby’, nor does the delivery of small quantities of produce such as eggs to shops or private households an option if there is, in effect, no customer base to speak of.
Dropping the Brexit question
We arrange the schedule for the next two days and then quickly get into the discussion: in 2016, the farming community had overwhelmingly voted for Brexit. What do farmers think now? As it turns out, around this table, all but Michael Walton voted to ‘remain’. He now feels “duped by the government”, says Walton. At the time he thought with more countries joining the EU, payments for farmers would decrease. “I thought, the UK government would have a really good agricultural policy and we would benefit”.
Upland farms across the UK are well suited for raising sheep and cattle but there is practically no arable land, even the acreage for making hay or silage (for winter feed) is limited. The biggest worries for UK livestock farmers therefore are the newly signed trade deals with Australia and New Zealand. “These deals will permanently decide whether or not we can sell meat and at what price”, is the agreed opinion.
Under these circumstances, diversification seems like a good strategy. Putting it into practice on an upland farm is a different matter. Egg laying hens, broilers, a pig unit, dairy cows… diversifying into any of these sectors would mean large financial investments. And being very experienced at handling sheep and beef cattle, does not mean you know how to run a successful pig or egg laying operation. Given the margins in the beef and sheep sector, banks are unlikely to grant big loans, especially not to tenant farmers who not only need the permission of the landlord to build ‘anything’, but who are also at risk of losing the business when the landlord decides not to renew the lease. Old tenancy agreements often were in place over four generations, but now agreements mostly cover a five to ten-year period.
The four farm families have thought about marketing meat directly to customers. Issues such as building a website with an online shop would be a challenge, but the real problem is slaughter and processing. The nearest abattoir is in Durham, a 70 km journey for the animals; and the local craft butcher who used to cut and portion meat for the Stanners recently closed down.
Options? What options?
How about going organic? It’s not worth the effort, the farmers agree. All four know of organic farmers who can’t find buyers for their organic meat and have to sell it as ‘conventional’. And there are the certification costs. As organic farmers, they would also have to reduce the number of animals they raise. Upland farms are low input systems, but with a very short growing season the farmers say they have to use chemical fertiliser on the few acres suitable for growing silage. The cattle are hardy enough to stay out all year, but in recent years, there was so much rainfall that the animals had to be brought in because the pastures would have turned into mud within days and irreparably damaged by their hooves. And whatever the weather conditions, in winter, cattle and sheep need additional silage. In recent years, the climate crisis has made matters worse: the summers were hot and dry, which meant less silage could be made and the animals needed additional feed earlier in the year. With prices for synthetic fertiliser and feed going through the roof since the war in Ukraine began, costs have increased dramatically.
With trade deals threatening to cut into their margins, input costs increasing and land rent to pay, the loss of the BPS is fast turning into an existential threat.
The SFI scheme and paying farmers for providing ‘public goods’ is supposed to make up for some of the shortfall. July is a busy month for all farmers, not just for the upland farmers sitting around the table that evening. The options laid out in the 150-page government SFI handbook will have to be carefully considered. “Basic payment was free money, SFI money has strings attached”, says David Stanners. Farmers not only will have to find out whether they qualify for particular schemes, they also need to decide whether the restrictions that may apply to a particular scheme don’t cut into profits and leave them worse off.
The next two days we spent visiting the farms to find out what the situation on each farms looked like.
Michael Walton: cutting costs but how?
The Waltons have been farming for generations. The tenancy is secure for another three years, then the rent will go up, says Michael Walton. At present he farms 485 acres, of which he owns 160. “It’s mostly rough land, it’s called ‘boat fell’[4] because it is so wet”. He runs an 80 head suckler[5] cow herd, and 700 Swaledale and Texel cross sheep. Because of the weather, there is more money in sheep than in cattle, he says. If he is lucky, the cows have to be housed only in January and can be out again by March. But last year, he had to bring them in in December and they could not return to the pasture until May which added hugely to the costs for feed and straw.
Lambing season starts in April. He sells fat lambs, mostly through Dunbia, a large meat processor and food company. It is usually the safer option than selling through auction at the live mart where prices fluctuate a lot: “At the life mart you have to be prepared to take your animals home again”, says Walton. His goal is to sell 1,000 lambs per year, in 2022 he sold 1,100 – to him that is a measure of running a productive farm and a job well done.
When we arrive on the farm, Walton and his mother, Caroline, are getting ready to deworm the lambs. It’s hard work, but mother and son are an efficient team. While they separate the ewes from the lambs they check the feet, trim hooves and treat with an antiseptic spray where necessary. Caroline Walton raised her family and worked on this farm almost all her life. Now, aged 70, she lives in Bellingham with her husband, also called Michael, who suffers from Parkinson and Alzheimer. From the 1970s to the late 80s it was mandatory for British farmers to dip sheep twice a year with organophosphates. Michael had to do that too, says Caroline Walton, and with so many sheep, he got drenched every time. Is this the course of his illness? She shrugs her shoulders, there is no way of knowing for certain and it wouldn’t change a thing. Some days she manages to bring her husband out to the farm, on other days he stays with a carer.
When I ask about the finances of the farm, Michael Walton Jr. readily shares the figures. At present, fertiliser costs £550 a ton, more than double what it was before the Ukraine war, but down from £750 in 2022. His budget for fertiliser is £15,000. Because of the extreme prices last year, he had to cut down on the amount of fertiliser he spread per acre. As a result, the amount of silage he made was significantly down and he had to buy in more feed.
He spends £15,000 on straw and he has to pay £20,000 in land rent. Some of the land is in a mid-tier Countryside Stewardship scheme which earns him £14,000. Under the EU Basic Payment Scheme he received £55,000 which made up 50-.60% of the farm’s income. From the SFI options available he will receive £4,000 at best. Which means that by 2027 her will be £50,000 worse off than pre-Brexit. Walton looks quite stunned when we arrive at this figure. Of course, he knew payments would come to an end, but he never made the actual calculation. “So many of us farmers have our heads in the sand because it is too awful to think about. Instead we believe that by some magic this sum will be replaced by something, somehow. But it won’t”. His only option will be to cut costs, he says. Maybe he could stop using fertiliser altogether if he reduces the number of cows. But even then, the amount of work on the farm would be more than what one farmer can handle. At present, his mum is still working with him more or less full time. She is fit and in good health, but for how much longer will she be able to continue at this relentless pace? Because of her full-time job as a district nurse, Walton’s wife, Julie, cannot help out on the farm. In future, she may well be the main breadwinner and Michael Walton will likely be unable to continue farming without her off-farm income.
Graham Robson: working more and harder
It doesn’t take long to get from the Waltons to the Robsons, the two families are neighbours. The once cobbled farm yard is enclosed on three sides by ancient stone barns and storage rooms, on the fourth side is the farm house and the entrance to the yard. The farmhouse has been modernised, but the rest of the farm apparently has not changed much since it was built in the 18th century, one building, a fortified structure with steep stairs leading up to the top floor dates back to the 16th century. The farm is beautifully situated and with its old stone buildings and nearby grazing animals it could feature on any postcard or tourist board brochure.
Graham Robson’s great-grandfather got the farm tenancy in 1955, but the Robsons have been farming in Northumberland for many generations prior to that.
The farm has 500 acres, 75 of which are suitable for making silage. There are 60 suckler cows and a Limousin cross bull. The Robsons buy in dairy heifers in calf or with a small calf, but “it takes four to five years till you make any money on them, provided you don’t lose a calf”, says Graham Robson’s dad, also called Graham. Ideally, they would like to overwinter all the cattle in a barn, but even though they have invested in a new barn and machine shed next to the road, there is not enough space. Some of the animals have to stay on pasture but require additional feed.
The 400 breeding ewes are hardy northern Blackface, they have impressive horns – and a temper. The Robson’s sheep are hefted which means they don’t need to be fenced. They move freely across what they know to be ‘their’ pastures, a knowledge the ewes pass on to their lambs. For tupping[6], Robson brings in Leicester rams. The female lambs are sold for breeding on lowland farms where they do well, they are hardy and fend for themselves. The males are sold for meat.
Graham Robson’s parents still work full time on the farm which leaves him time to do contract work on other farms. His wife Lindsey works full time at Unison Colour in Hexham, a producer of handmade soft pastels. Right now, Lindsey is on maternity leave.
On the day of our visit, the Robsons are shearing sheep. Graham Robson’s dad is waiting for a hip replacement and is restricted in his movements, but he still manages to manoeuvre the next candidate for shearing from the holding pen to the open barn where his son grabs the sheep by the horns and, with a few fluid wrestling moves, secures it between his legs, belly facing up. It only takes him a few minutes to take off the fleece with well-practiced movements and without nicking the skin. While his father brings in the next sheep, his mother gathers the fleece, carries it next door and stuffs it carefully in one of the wool bags supplied by British Wool. Except for the wool from the few Leicesters which pays five times what it costs to shear, the wool is worthless.
Graham Robson, who is now 30, learnt shearing at the age of 16. “It really takes years until you are good at it”, he says. He always liked physical work, handling livestock and being outside. The school he attended until he was 18 had a farm on the premises and Robson was able to graduate with three agriculture related A levels. Through the ‘Young Farmers’ youth organisation he got a scholarship and spent nine months working on farms on New Zealand’s North Island. Since his return he’s been working with his parents.
Up to now the Robsons have not signed up for any stewardship schemes because of the management restrictions that would apply. They recently hired a consultant to help them work out which SFI schemes might provide an extra income without having to change practices on the farm too much. The ‘low input grassland’ scheme, and ‘providing habitat for ground nesting birds’ might be options. The consultant believes that, all going well, the payments for those two schemes could make up for two thirds of the BPS money. For the consultation and filing the applications the adviser charged £1,200. Whether the Robsons will get into the schemes and how much they will eventually be paid remains to be seen.
One third of the farm’s income comes from the contract work Robson does on other farms, such as shearing sheep. To make up for the BPS shortfall he hopes to increase the hours he can work on other farms. He may also have to reduce stock numbers to save on feed, straw and fertiliser. The plan hinges on his parents continuing to work on the farm full-time. The old barns and storage spaces may look pretty, but they are labour intensive and therefore not really fit for purpose. What happens when the older Robsons retire or health issues force them to work less? While we talk, Graham Robson continues shearing. He is young, an extremely capable, fit, strong, fast and focussed worker. It’s so obvious that farming – this farm – is his life and he will do all he can to hold on to it and provide for his family. If George Orwell were alive, he could write a new version of Animal Farm; for farmers like Graham Robson the motto already is: I’ll work harder.
A version of this article was first published by the Sustainable Food Trust https://sustainablefoodtrust.org/
[1]https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1168886/SFI23__handbook_V1.0.pdf
[2] At present, only farmers in England can join SFI schemes. The devolved governments in Scotland, Wales and Northern Ireland develop their own agricultural policies. While direct payments continue for now, they will eventually have to be phased out or greatly reduced, too, because the government in Westminster controls the purse strings.
[3] https://www.countrylife.co.uk/country-life/who-owns-britain-top-ten-aristocratic-uk-landowners-20175
[4] In northern England and Scotland, an upland moor covered hill or rocky slope with sparse grass cover is called a fell.
[5] cow-calf pairs
[6] bringing in a ram to (hopefully) impregnate the ewes
Marianne Landzettel is a journalist and author writing and blogging about food, farming and agricultural policies in the UK, the US, continental Europe and South Asia. She worked for the BBC World Service and German Public Radio for close to 30 years. Follow her on X at @M_Landzettel Images used with kind consent of @M.Kunz
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