Daniel Murphy from Savills discusses how farmers can plug the gap left by changes to the basic payment scheme.

The basic payment scheme (BPS) has provided a vital financial safety net for farmers since 2015. As that level of support continues to be reduced, farms are having to find other sources of income or ways to cut costs.

By combining various strategies tailored to specific circumstances, there are several ways to navigate the transition.

1. Efficiency, innovation and cost reduction

Embracing technology, streamlining processes and improving resource management can significantly reduce costs. A full review of the current farming enterprise can identify how to improve efficiency and unlock significant savings. 

Using shared farming or contract farming agreements (CFAs) can also provide access to contractors with the latest technology, which can reduce the capital burden, while simultaneously achieving stability in sales and income.

East Anglian Daily Times: Dan Murphy, part of the food and farming team at Savills in Suffolk and NorfolkDan Murphy, part of the food and farming team at Savills in Suffolk and Norfolk (Image: Richard Marsham)

2. Market strategies

Adding value to products by processing or packaging them differently can open doors to higher-value markets. 

Additionally, exploring new business lines, such as exports or niche local markets, can diversify revenue sources.

3. Diversification

Relying solely on one source of income can be a potential risk. Exploring other revenue streams, such as agritourism, farm shops, specialist crops, or educational programmes, can create additional income.

4. Public funding

There are several grants and subsidies available. The environmental land management scheme (ELMs) rewards conservation efforts through the sustainable farming incentive (SFI) and countryside stewardship, while financial support is also available for woodland creation. 

Countryside stewardship capital grants can be claimed for works including fencing, hedging, metalled tracks and spray washdown areas, while the farming investment fund offers grants of up to £500,000 for everything from water management and slurry infrastructure to improving productivity and innovation.

5. Private funding

Whether selling biodiversity net gain units to developers to mitigate environmental impact, or helping firms meet sustainability goals through utilising natural capital, there are a number of potential revenue streams from private finance. 

Many farms have been exploring the idea of creating farming cluster groups to provide nature-based solutions at scale to the private sector, reducing the commitment required from any individual landowner.

 

Clearly, what works for one farm may not suit another, so exploring a mix of strategies is crucial. 

Savills is still offering free business advice through the future farm resilience fund to help with the post-BPS transition – so do get in touch if you’d like further details.

For advice on the rural sector in Suffolk and Norfolk contact Daniel Murphy at Savills on 078709 99237or daniel.murphy@savills.com