Arable matters - Facing more stick than carrot

I certainly got the feeling that we were being looked upon as the wide boy, used-car salesman sort – the type who recognise ‘a nice little earner’ when they see one – when I was filling in the Preparing for Sustainable Farming forms to claim for last year’s carbon audit and soil testing.

Okay, so the exercise wasn’t going to earn us a fortune – but it was a rainy day and the alternative was addressing yet more boil-ups in fields where the drains have been tested beyond breaking point. So it was worth doing.

Plus, after last year’s miserable uptake of the scheme, I’ve been a bit worried that if the second round didn’t get a few more takers then the powers that be might surmise that we don’t really need the cash – or that we couldn’t be bothered even to claim for something we were probably already doing anyway. And let’s face it, as the Scottish Government seems to need little excuse to grab the cash, there seemed little reason to give them any form of encouragement to do so.

But as I sat and read through the guidance, and the claims procedure and watched the online videos telling us how to submit our claims, I couldn’t help but notice the differences in what was required to validate the arable options under the PSF and what was needed for the livestock oriented ones.

Over the top

For, not only was carrying out a carbon audit a prerequisite for getting the meagre support for soil sampling, but the level of proof which we is required to submit in support of our claim was more than a little over the top.

Not only do we have to provide the date when the audit was completed but also the name of the service carrying out the work, along with the name and the registration number of the Farm Business Adviser Accreditation Scotland Scheme accredited person conducting the carbon audit. And if that wasn’t enough, we also have to supply an electronic copy of an itemised invoice from the aforementioned accredited advisory service – backed up by proof of payment from an itemised bank statement showing the name of the bank, the business name, and other account details.

Similarly, for the soil samples, we needed the date the analysis was completed, the name of the advisory firm or lab carrying out the analysis, an invoice showing the work undertaken, and – once again – a bank statement including, as was required before, the bank’s name, account and sort code etc showing that the payment had been made. A copy of the actual analyses and accompanying recommendations also had to be included.

And while this wasn’t really an overly arduous job on a wet and rainy day, it wasn’t particularly helped by the fact that the books were all at the accountants.

Maybe I should just have been better organised – and you could say that it’s fair enough, as the government does have a responsibility to look after taxpayers’ money, even small amounts of it. But the contrast with the animal health and welfare claim could hardly have been greater. For, when I started to file the claim for the sheep scab blood tests (all clear, thankfully) and the bull fertility checks, all that was needed was a form signed by our vet confirming that the work had been carried out!

More trustworthy

So I found myself wondering if the livestock sector was viewed as being more trustworthy than the arable sector. However – and I can float an alternative suggestion in the expectation that livestock producers have probably been bored enough to stop reading by this stage – another arable grower suggested that the difference in approach might be due to the fact that there was some hope of an arable farmer being able to provide the required details – while that might not be the case for the livestock men!

Obviously not a suggestion which I would award any credibility but the issue maybe did highlight a bit of a worrying difference in the approach taken towards the two sectors.

And the unnecessary amounts of red tape and hoops which have to be jumped through to get our hands on even the few hundred quid under the PSF scheme also highlights the reason why we sometimes see a considerable degree of underspend on some of the more outlandish schemes which are put forward.

I admit that I might be making a bit much of what is actually a fairly trivial divergence here but the issue did get me wondering just how the return of the missing millions which were ‘diverted’ from agriculture’s ring-fenced budget will be handled (and just as importantly carved up) when it finally happens.

With this in mind, last week’s revelation that a meagre £15 million of the missing £61m was going to be made available to the sector in the 2024/25 budget seemed to raise more questions than it answered – but it looks set to be aimed at capital expenditure under the Agricultural Transformation Fund and the Agri-Environment Climate Scheme.

Where most needed

It was stated that the return of the ‘deferred’ funds would be targeted to ‘where it was most needed’. And with new rules coming into play in 2026, there’s already been a strong hint that slurry storage could absorb a fair old portion of whatever money is actually dished out at the end of the day – so I wouldn’t get too excited about hopes of major funding being available for new arable machinery.

Taking this a step further and onto the wider front, since the start of discussions on formulating the new post-Brexit policy, Scotland’s farming industry has surprised both politicians and civil servants with its ability to present a united front – despite some high-level attempts to create tension, dissent and division among the different sectors.

But with the huge level of capital investment which growers already carry in the arable sector, including the price of the machinery – we need to till, harvest and store our crops – there’s a real risk that those looking in from the outside might think the arable sector isn’t likely to be the most needy.

Too easy to forget

Alongside the fact that we have grown more than a little used to the bar graphs showing just how few businesses in the livestock sector would be viable without support, the jump in grain prices we saw in 2021/22 has made it a bit too easy to forget just how reliant the arable sector remains on these payments as well. However, the past year, when the high cost of inputs came home to roost as grain prices continued to slide, might act as a sharp reminder.

For while there might have been some let-up in the huge level of agflation in some areas of our variable costs, fixed costs have continued to move in only one direction – and, as the old agricultural economist’s maxim of ‘variable costs are fixed and fixed costs are variable’ states, they often have a more significant impact on the bottom line than the gross margins achieved.

And while the sector’s penchant for buying shiny machinery might give the wrong impression to policymakers, it’s worth remembering that not only has the price of new equipment risen, the cost of financing it in the current economic climate, with interest rates running far higher than they were a year or two ago, is likely to have climbed by as much as 20% above the levels which the sector had grown used to over the past decade.

It worries me that the sector which has done much of the heavy lifting on the greening front over the past few decades could be sidelined when the new policy and associated incentives are introduced, leaving us facing more stick than carrot.