A Government Select Committee concluded on 26th January that the Rural Payments Agency and DEFRA had underestimated the extent of the Single Farm Payment Scheme to the extent of questioning as to whether or not its initial implementation should have been delayed until May 2006. It went on to heavily criticise the uncertainty regarding the timing and levels of payments, and the inevitable financial hardship that this was causing, to the extent of recommending that Margaret Becket make a statement to the House as soon as was possible in this regard. With the allocation of Entitlements still outstanding, there still seems to be no sign of the £1.5 billion of European money that is officially referred to as being "delayed in the system". Those still farming, and relying on this support, feel let down and failed by the system!

Although desperately wanting to believe that the Single Payment Scheme (SPS) would reduce red tape and bureaucracy, to the contrary hoops and hurdles to negotiate seem to have increased and become more hazardous and frustrating of late. Customer Registration requires more detail than if applying for a passport, Rural Land Registry works are more complicated than dealings with the Land Registry and obtaining Single Farm Payment Entitlements seems as uncertain as England retaining The Ashes! Farmers, usually a resilient mindfully optimistic bunch, are becoming increasingly worried in the face of financial difficulty. Accepting that farming affords unforeseen income, in terms of the way of life it provides, without liquid assets even the smallest of bills remain outstanding and a worrying burden. Bank loans, overdraft facilities and other borrowings are at an all time high. Often prepared to lend against valuable assets held as security, one can only feel that those relying on raw farm income are digging deeper and deeper holes with no way out. Many working within the industry have agreed to forego payment of invoices, rents, etc, until receipt of SFP monies, however, if these do not arrive shortly, and at a level as at first hoped, then it is feared that further despair will ensue. The knock on effect of this to the morale of the industry is worrying with an overview of many farm businesses showing forced changes in farm policy, from the extent of reducing routine repairs and maintenance to laying off long time farm workers and indeed ceasing agricultural production altogether.

Some have rightly criticised landowners and farmers in the past for having been stuck in their ways and resistant to change, however, every which way they seem to turn there are seemingly financial barriers to overcome. Environmental Schemes, whether Entry Level Scheme (ELS) or Higher Level (HLS) have been delayed by the provision of accurate Rural Land Registry digital plans. The Rural Development Service themselves have at times appeared helpless due to an unreliable computer system and a seeming inability to communicate with colleagues at DEFRA and the Rural Payments Agency. Even if Schemes are established many are asking if the level of payment, when coupled to that of the supposed SFP, can be sustained in the long run. Although these payments are more publicly accountable they themselves might be seen as immoral and unfair when set against support, or a lack of it, provided to famous British areas of industry, such as steel and mining sectors, of yesteryear.

So if these formal avenues for sourcing income are blocked what else can farmers do? Diversify is the answer that most will reply to this question, however, although asset rich it is not possible to adapt or convert these without funds with which to do so. Indeed depending on location and other enterprises undertaken, it often proves to be a potentially more frustrating route than that highlighted above. If it is not the lack of available finance that precludes consideration then it is public objection/misunderstanding and an often unsympathetic planning system. Despite this many are still struggling on in an attempt to find an alternative enterprise that proves profitable. Schemes range from the conversion of farm buildings to light industrial units, adding value to traditional farm commodities through direct marketing schemes and farm shops, providing facilities for other outdoor activity enthusiasts, (whether this be paintballing, model aircraft flying, fishing or quad bike adventuring) are all worth considering. Being in the more affluent South East, opportunities are apparent but much still depends on location, planning and health and safety implications.

If times were not touch enough then the latest news on Cross Compliance inspections will bring yet further doom and gloom to the average farmer. Although selection was meant to have been undertaken at random, it is rumoured that tip offs from organisations such as the Rambling Association have resulted in seemingly pinpointed attacked on a less able/understanding which in turn has resulted in unprecedented penalties in relation to numbers of inspections undertaken. It is also feared that as a result of DEFRA and the Rural Payments Agency having failed to undertake a suitable amount of inspections prior to 31st December, in order to meet EU deadlines, that they are clawing back monies for menial breaches in an attempt to be seen to be policing the system satisfactorily. Surely these further penalties, often made without offering the farmer a chance to rectify minor breaches, prove to be a yet further financial burden on an already struggling system. Why is it that when farmers make mistakes they are punished but when the Agencies do likewise they are not?

The pressures described above are only likely to increase this year as farm pits are closed, disposal of dead stock becomes more involved and health and safety implications and employment law and legislation become further complicated. These pressures will inevitably force out more farmers this year and with the rural property market still under supplied, largely due to the knock on effect of the SPS, many landowners and farmers might well be tempted to take advantage of the seemingly strong market and cash in their chips. This is of course if Banks and other financial institutions don't foreclose on them in the first instance!

So is farming finished? Well to our way of thinking it is in the traditional format of yesteryear and possibly shall be for some time to come. This said someone has got to produce the food that we all eat and more importantly the countryside that we all enjoy. How we resurrect, and then keep alive, the traditional farmer none of us quite know but it is without doubt that they are on the endangered species list and could be confirmed as extinct joining the miner, shipbuilder and steelworker of the late 20th Century.

Our business is dependent upon the success of your business. We are, therefore, committed to providing cost effective advice in order to assess potential assets and enhance them in such a way that they provide income and longevity to your enterprise. If you would like to discuss any aspects raised in this article, or indeed those that you might consider in association with such, then please do not hesitate to contact Andrew Samuel at our office in Hellingly.