Despite the recent upturn in farm gate returns, Danske Bank’s head of agriculture, Rodney Brown, is quick to confirm that the vast majority of farm businesses in Northern Ireland remain reliant on the single payment and farm finance in order to remain viable.
He explained to Agriland: “There is no way that agriculture could survive without that supplementary support coming into it.
“As we move forward there will be policy changes coming down the track. These will be much more climate focused.
“In no way is it a case of farmers not earning the support available to them up to now.
“But looking ahead they will have to document more of what they do in order to secure the subsidies that are made available.”
Farm finance
In terms of on-farm investment, the Danske Bank representative said that many farmers are now positioning themselves to meet the environmental challenge that is on the horizon.
“This is why the likes of the Farm Business Improvement Scheme has been so well supported,” he explained.
“There is also evidence to strongly suggest that many farmers availed of the government’s bounce bank loan scheme to invest in the new technologies that will help them reduce the carbon footprint of their businesses.
“Cash flow is remaining very strong on most farms. As a result, the demand that we would have usually seen to have overdrafts extended in the period running up to the distribution of the single payment monies, is not as strong this year,” he added.
“Those farmers who have welcomed the good prices while, at the same time managing to control their costs, are doing really well at the present time.
“It gives me great heart that so many farmers are looking forward and are trying to drive real change within their businesses.”
Farm supports
Brown believes that the overall support funding levels made available to agriculture will be retained into the future. But the ways in which the monies are actually made available to farmers certainly will change.
He commented: “For agriculture to remain sustainable, we just cannot take all that money out of the system. On that basis, I believe that overall funding levels will remain unchanged.
“Those that are picking up the environmental challenge will have more work to do in terms of meeting the targets set out for them. The money will be harder to access.
“There will perhaps be a parachute payment for those farmers who simply want to keep their business ticking over. But it will be greatly reduced, relative to the size of the single payment available at the moment,” he continued.
According to the banker, the bulk of the money will be made available to those farmers who set out down the road of meeting the environmental targets that they need to meet.
“Yes, there will still be a single payment of sorts made available to farmers. But it will possibly comprise a number of elements, which, for the most part, will reflect on the range of environmental improvements they make within their businesses.
“But whatever future farm support arrangements are agreed for Northern Ireland, they must also complement policy decisions taken in the rest of the UK and the Republic of Ireland,” he concluded.