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Thread: FARMING WITHOUT SUBSIDIES

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    Senior Member LALANS's Avatar
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    FARMING WITHOUT SUBSIDIES

    One for you all to ponder over the remaining weekend.
    My subsidy payment this year is likely to be 44% of what it was last year. I was a little pissed to read an 'expert' suggesting that we need to farm without subsidy.
    Well here's the rub to be no better or worse off I will neeed to gross an additional 400 per s calf just to standstill.
    I consider myself to be fairly technically efficient.
    Answers on a postcard cos I'm buggered if I can square the circle.

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    Re: FARMING WITHOUT SUBSIDIES

    Quote Originally Posted by LALANS View Post
    One for you all to ponder over the remaining weekend.
    My subsidy payment this year is likely to be 44% of what it was last year. I was a little pissed to read an 'expert' suggesting that we need to farm without subsidy.
    Well here's the rub to be no better or worse off I will neeed to gross an additional 400 per s calf just to standstill.
    I consider myself to be fairly technically efficient.
    Answers on a postcard cos I'm buggered if I can square the circle.
    Ah welcome to the nearly real world tother side of the border.
    You all had it good when we had to bite the bullet!
    On the bright side you aren't about to be sold / closed down by TATA!

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    Re: FARMING WITHOUT SUBSIDIES

    i feel without the subsidies all the small guys including me will knackered. i cant see a future in farming at the moment unless your farming large either lots of cattle or big acreages, we try and be efficient as possible but !!!!!! we cant all stack shelves in super markets for a second/ third jobs

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    Re: FARMING WITHOUT SUBSIDIES

    Quote Originally Posted by db1410x4 View Post
    i feel without the subsidies all the small guys including me will knackered. i cant see a future in farming at the moment unless your farming large either lots of cattle or big acreages, we try and be efficient as possible but !!!!!! we cant all stack shelves in super markets for a second/ third jobs
    Hmmm,
    Take subs out of the equation.......
    What Proportion of you annual costs (rent, inputs etc) do you think is there because of the SFP effect?
    In other words the availability of SFP allows the farmer to pay more for inputs than they are perhaps worth. Everything we sell is to an open market, the price is decided by the buyer. (Largely)
    All inputs that we buy , the price is decided by the vendor (largely) we can argue, negotiate, wheedle away but in the end the price is inflated by SFP.
    Agents around here are quite open about it.....we want your SFP as rent.....well it was, now it is in some cases, rather more.
    SFP has moved from being a valuable support to a supply chain bonanza.
    The cost of many of our vital inputs has a lot to do with the reason that dogs lick their ...B*****ks , why? Because they can.
    From the supply side point of view the cash is there to be had.
    This not to say the withdrawal of SFP would a pleasant experience....but!

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    Re: FARMING WITHOUT SUBSIDIES

    Quote Originally Posted by db1410x4 View Post
    i feel without the subsidies all the small guys including me will knackered. i cant see a future in farming at the moment unless your farming large either lots of cattle or big acreages, we try and be efficient as possible but !!!!!! we cant all stack shelves in super markets for a second/ third jobs
    Not just small guys.
    Talking to a bloke today, said he had just done budget for coming year, came out at minus 30,000. Take out SFP - minus 230,000. ouch

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    Senior Member MerryKerry's Avatar
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    Re: FARMING WITHOUT SUBSIDIES

    Yeah I'm not so sure size is all too influential tbh. Sure, there is only so much profit on one beast or tonne or whatever so you will need X amount minimum to provide that wage and that amount is quite large e.g: 200/head profit on cattle = 75 beast going through the system per year to make 15k BUT economies of scale will only tinker around the edges of costings IMO. Bigger could just mean bigger loss.

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    Re: FARMING WITHOUT SUBSIDIES

    Big scale contract farming taking over these parts on commodity grain production but still a lot of very good "family" size arable operations where the sub is considered as gravy. A lot exploiting alternative subs too on renewables and environment...I don't see any doom and gloom at all farming in the Merse.

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    Re: FARMING WITHOUT SUBSIDIES

    Quote Originally Posted by pig fighter View Post
    Big scale contract farming taking over these parts on commodity grain production but still a lot of very good "family" size arable operations where the sub is considered as gravy. A lot exploiting alternative subs too on renewables and environment...I don't see any doom and gloom at all farming in the Merse.
    "Ohh to farm in the Merse"
    Tis a different world!
    gee

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    Re: FARMING WITHOUT SUBSIDIES

    Quote Originally Posted by Gee View Post
    Hmmm,
    Take subs out of the equation.......
    What Proportion of you annual costs (rent, inputs etc) do you think is there because of the SFP effect?
    In other words the availability of SFP allows the farmer to pay more for inputs than they are perhaps worth. Everything we sell is to an open market, the price is decided by the buyer. (Largely)
    All inputs that we buy , the price is decided by the vendor (largely) we can argue, negotiate, wheedle away but in the end the price is inflated by SFP.
    Agents around here are quite open about it.....we want your SFP as rent.....well it was, now it is in some cases, rather more.
    SFP has moved from being a valuable support to a supply chain bonanza.
    The cost of many of our vital inputs has a lot to do with the reason that dogs lick their ...B*****ks , why? Because they can.
    From the supply side point of view the cash is there to be had.
    This not to say the withdrawal of SFP would a pleasant experience....but!
    I agree. What you post is important and few farmers recognise the real effects of subsidy. Of course there's another factor. Is is really equitable that my hard working son who is a landscape gardener, buying a small house for his wife and two children, who pays a 20% vat on many essential purchases (he pays no income tax) should contribute to a cheque going to someone whose living standards are stratospherically different? Maybe the farmer who relies on a 200,000 Basic Payment could change/develop/invest in his farm business so it makes a trading profit. The present system encourages him to continue farming as he has done, keeping profits and his tax bill low.
    Bright ideas for successful farming www.farmideas.co.uk

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    Re: FARMING WITHOUT SUBSIDIES

    Seriously now, I am fascinated that you all believe that the prices of your inputs are somehow magically inflated by the existence of the SFP. On this basis, the Americans and Australians etc must be able to buy them cheaper. Other than the bulk and volumes that they use, do you believe that to be the case? Have you tried buying 3C Chlormequat in Canada lately?

    You think that if the SFP goes, the fertiliser manufacturers and major agrochemical manufacturers are going to drop their prices 20% or something? The ag-chem manufacturing and supply side is a totally down to the wire operation, so much so, that product that is not forecast for, is simply not manufactured- there is no magic store of fungicides laying full just in case you guys need an extra dose of CTL because the season turns into a high disease pressure year. This is purely because no one will manufacture stuff 'just in case', due to the cost of doing so, storing it, and the inevitable risk of it being revoked next year and having to dispose of the stuff- not such a problem for a farmer with 3 cans he can keep in the garden shed, but legal disposal of pesticides, when you have maybe 3000 litres of it, is a seriously costly business.

    Europe is already the biggest market for pesticides by volume, simply because you have yield potentials way in excess of anywhere else. Hence the bulk of the R&D budget is spent on your behalf anyway. Other areas are improving in some ways, particularly the corn and rice markets, but a lot of the original R & D was done with Europe in mind. The fact that the modern SDHIs work very well in rice is just happy coincidence, for example.

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    Re: FARMING WITHOUT SUBSIDIES

    Quote Originally Posted by Uwork4menow View Post
    Seriously now, I am fascinated that you all believe that the prices of your inputs are somehow magically inflated by the existence of the SFP. On this basis, the Americans and Australians etc must be able to buy them cheaper. Other than the bulk and volumes that they use, do you believe that to be the case? Have you tried buying 3C Chlormequat in Canada lately?

    You think that if the SFP goes, the fertiliser manufacturers and major agrochemical manufacturers are going to drop their prices 20% or something? The ag-chem manufacturing and supply side is a totally down to the wire operation, so much so, that product that is not forecast for, is simply not manufactured- there is no magic store of fungicides laying full just in case you guys need an extra dose of CTL because the season turns into a high disease pressure year. This is purely because no one will manufacture stuff 'just in case', due to the cost of doing so, storing it, and the inevitable risk of it being revoked next year and having to dispose of the stuff- not such a problem for a farmer with 3 cans he can keep in the garden shed, but legal disposal of pesticides, when you have maybe 3000 litres of it, is a seriously costly business.

    Europe is already the biggest market for pesticides by volume, simply because you have yield potentials way in excess of anywhere else. Hence the bulk of the R&D budget is spent on your behalf anyway. Other areas are improving in some ways, particularly the corn and rice markets, but a lot of the original R & D was done with Europe in mind. The fact that the modern SDHIs work very well in rice is just happy coincidence, for example.
    May just come as a huge surprise to you but arable farming makes up only part of the equation.
    Fertiliser...weed killer ....fungicide and pesticides may play a huge part in your somewhat blinkered life.......but not everywhere..
    If you took the time to read my post you would see rent as being one of the main parts of input inflation that we face.
    The fact remains if your product cannot be paid for from the income available per acre then no matter what your cost of production is, how near the bone its is priced, it cannot be done.
    Currently finished cattle prices are not hugely different to what was available 20 odd years ago. Telling me that input prices cannot fall is difficult to appreciate.....over the twenty years mentioned we as farmers have had to cut our costs per unit of production...regardless of wether or not we think our cost are cut to the bone.
    I am sorry if you cannot accept the message from your indirect customers.......I am pretty sick of paying 21st century prices with 20th Century income, that is bad enough, but being lectured why I should accept it sticks in my craw!
    Plenty of folk ready to tell us how to do it.......few of them have actually done it!

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    Re: FARMING WITHOUT SUBSIDIES

    Quote Originally Posted by Gee View Post
    May just come as a huge surprise to you but arable farming makes up only part of the equation.
    Fertiliser...weed killer ....fungicide and pesticides may play a huge part in your somewhat blinkered life.......but not everywhere..
    If you took the time to read my post you would see rent as being one of the main parts of input inflation that we face.
    The fact remains if your product cannot be paid for from the income available per acre then no matter what your cost of production is, how near the bone its is priced, it cannot be done.
    Currently finished cattle prices are not hugely different to what was available 20 odd years ago. Telling me that input prices cannot fall is difficult to appreciate.....over the twenty years mentioned we as farmers have had to cut our costs per unit of production...regardless of wether or not we think our cost are cut to the bone.
    I am sorry if you cannot accept the message from your indirect customers.......I am pretty sick of paying 21st century prices with 20th Century income, that is bad enough, but being lectured why I should accept it sticks in my craw!
    Plenty of folk ready to tell us how to do it.......few of them have actually done it!
    Lol, it was not a lecture, it was the reality behind the scenes, your mileage my vary, and no, what I was saying applies equally to all sectors of the industry, arable or otherwise.

    However, If you are saying that you won't use as much chemical or fertiliser because there is no SFP that is fine- much of the world already does this, they just don't use it because it does not pencil economically, so it is not new or unheard of.

    However, I somehow doubt the barley barons in the East, with their blackgrass, are going to be able to continue on without Bayer's magic in a can somehow.

    Like I said- go find out about prices of inputs in other parts of the world where SFP does not exist.

    As I said, you need only to look at the way in which firms have merged, amalgamated or disappeared to realise the supply chain has undergone rationalisation as befits a changing world market place.

    If you believe the manufacturers of AN or whatever are somehow langling along making huge margins because they know the SFP exists, I think you will find the reality is rather different.

    Not that long ago fertiliser was sub 100/tonne. Today it is more like 200 a tonne. Increasing costs or flamboyant profiteering? I think you need a reality check. I know what it costs to produce a tonne of corn, the same as anyone, but I also know the costs of manufacturing a tonne of cake, and I have seen enough of the world to know how farming is done without subsidies and what their input costs are- they use less of the stuff or not at all if it does not 'pencil'.

    If the SFP disappears I believe a number of farmers will leave the industry, others will continue. although probably spending less on inputs- same as happens in other countries. They won't expect magically to be finding a 20% off sticker on everything because the SFP has gone. Thinking like that, however fruitful and wonderful a desire, is downright dangerous, just like expecting a 20% increase in the milk price is.

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    Re: FARMING WITHOUT SUBSIDIES

    Quote Originally Posted by Upnorth View Post
    Not just small guys.
    Talking to a bloke today, said he had just done budget for coming year, came out at minus 30,000. Take out SFP - minus 230,000. ouch
    Does this mean his normal annual income is 200,000 or have i misunderstood this?

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    Re: FARMING WITHOUT SUBSIDIES

    Quote Originally Posted by philcaegrug View Post
    Does this mean his normal annual income is 200,000 or have i misunderstood this?
    His SFP is 200,000
    So without SFP his trading margin would be minus 230,000

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    Re: FARMING WITHOUT SUBSIDIES

    In the 1950,s my fathers total farm income was 10,000, his profit was 4000!!
    Around the 1980,s my brother and myself, total farm income was about 600,000, profit around 80,000.
    God knows what the profit percentage would be today, but that is an illustration of how things have moved.
    The only answer the farmer has is economy of scale or make a living some other way.
    30 years ago we started selling mill mixers to produce 3 tonnes of feed. We are introducing a new 12 tonne machine at the Pig and Poultry fair in May.
    The only way is to increase size to cope with decreasing margins, because of decreasing commodity prices. Hence the groth of more industrialised farming.
    Near here there are two broiler sheds being built, they would nearly cover the small farm of yesterday!!

    Jack Caley

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    Re: FARMING WITHOUT SUBSIDIES

    Quote Originally Posted by Jack_Caley View Post
    In the 1950,s my fathers total farm income was 10,000, his profit was 4000!!
    Around the 1980,s my brother and myself, total farm income was about 600,000, profit around 80,000.
    God knows what the profit percentage would be today, but that is an illustration of how things have moved.
    The only answer the farmer has is economy of scale or make a living some other way.
    30 years ago we started selling mill mixers to produce 3 tonnes of feed. We are introducing a new 12 tonne machine at the Pig and Poultry fair in May.
    The only way is to increase size to cope with decreasing margins, because of decreasing commodity prices. Hence the groth of more industrialised farming.
    Near here there are two broiler sheds being built, they would nearly cover the small farm of yesterday!!

    Jack Caley
    Going back to farming without subsidies, it's what us smallholders with up ro 5 Ha of owned, eligible, land have had to do for the last couple of years anyway, and with great care and a lot of effort it IS possible to make a LITTLE profit, SOMETIMES. Mostly we just about break even or make a small loss, if nothing is charged for our time. Negligible produce? Well, we've produced and sold over 600 prime Texel lambs since starting with them, with standards that nobody but an ignorant nutter could complain about on animal welfare and environmental care etc. etc.

    This is tongue-in-cheek, but I point out that I do pay a fair bit of tax on my other earnings, so I'm subsidising bigger farmers,
    and getting no subsidy myself, while doing what almost everyone would support as good farming, albeit on a small scale.

    Certainly there are poor smallholders, but no higher that the proportion of bad larger farmers, and I regret to say that the NFU has consistently been less use to us than a chocolate kettle. At least you can eat a chocolate kettle.

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    Re: FARMING WITHOUT SUBSIDIES

    Quote Originally Posted by RGSP View Post
    Going back to farming without subsidies, it's what us smallholders with up ro 5 Ha of owned, eligible, land have had to do for the last couple of years anyway, and with great care and a lot of effort it IS possible to make a LITTLE profit, SOMETIMES. Mostly we just about break even or make a small loss, if nothing is charged for our time. Negligible produce? Well, we've produced and sold over 600 prime Texel lambs since starting with them, with standards that nobody but an ignorant nutter could complain about on animal welfare and environmental care etc. etc.

    This is tongue-in-cheek, but I point out that I do pay a fair bit of tax on my other earnings, so I'm subsidising bigger farmers,
    and getting no subsidy myself, while doing what almost everyone would support as good farming, albeit on a small scale.

    Certainly there are poor smallholders, but no higher that the proportion of bad larger farmers, and I regret to say that the NFU has consistently been less use to us than a chocolate kettle. At least you can eat a chocolate kettle.
    In effect you are reinforcing my argument, in that you have charged nothing for your time. You have not said how long it has taken to produce 600 lambs. I once knew a guy who said that if all his turnover was profit he would not have enough to live on!

    With reference to the guy with 200000 payment, lets face it is only recently that this budget loss is happening because of suddenly reduced commodity prices. The previous situation of high single farm payments for high acreage farmers was surely unnecessary and distorted farm structure, but maybe it could be different today.
    Jack Caley

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    Re: FARMING WITHOUT SUBSIDIES

    The subsidies we get on our farm in this part of Canada are as follows:
    -VAT rebates on farm related expenses (called HST here) same as any VAT registered business-Property tax break on lands entered into agricultural reserve program, you don't pay tax on the land but if its removed from ag you pay 20 years back taxes at the rate the land is converted into ie residential x 20 years - this was done as there is no zoning in most areas to prevent development
    -Road tax rebate on dyed diesel if you jump through the million hoops and are registered for everything perfectly. Huge pain.
    -30% reduction in registration fees/plates for farm vehicles vs commercial vehicles.
    -Farm income less eligible expenses is added right onto your other employment income and taxed on the same schedule, 0% to 5000 pounds (10,000$) progressive up to about 45% around 25,000 pounds. You can shift some back to a previous year if you had a big loss prior. Losses are heavily restricted against other income from off farm and requires lawyers at times to get your loss declared eligible.
    No break on any inputs.
    Adding more restrictions every year on manure storage, spraying, setback distances from waterways, animal housing requirments etc.
    The privately run pets animal protection agency has jurisdiction to enter your farm and enforce animal protection laws on farms! This is ridiculous.

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