The current lock-down and crisis caused by the coronavirus is having widespread implications across all sectors of the economy. Farmers and those working in agriculture, food and distribution of produce throughout the supply chain are playing a important role in supporting the wider public.
The business of farming is continuing so we’ve summarised our views on the current situation.
- Farmers are generally carrying on as normal, with a few adjustments, such as no physical planning meetings in the morning, but instead organising themselves by phone/text.
- Farmers are classed as key workers. The NFU are supporting them in many ways, and have given NFU members access to be able to print off an “Essential Journey Certificate” to produce to the police if necessary.
- Farmers in most areas with combinable crops or vegetables are struggling to establish crops for the summer due to extraordinarily wet sowing season. With spring drilling, likely to lead to lower than normal harvests, which will impact on the 2020 harvest results.
- Some farmers and fruit growers will be vulnerable to a shortage of labour to harvest/pick their crops due to a) Brexit and b) lack of movement across borders due to Coronavirus lock-downs. Local workers will be needed to help on the land.
- Lambing is well under way, and no cross-contamination into animals as far as we know.
- Current shortage of red diesel at an important time for farmers – having to resort to using more costly pump diesel. Caused by a lack/shortage of labour to move diesel from the docks, particularly at Immingham. This has been caused by the coronavirus.
- Legislation has been put in place to protect residential tenancies, and commercial business tenancies. There has been no corresponding legislation put in place for 1986 or 1995 Act agricultural tenancies, so if it is proving difficult to keep up rent payments as a result of the coronavirus epidemic, tenants should enter discourse with landlords to avoid the chance of eviction.
- Macro-economic factors and future government intervention may assist. Current low oil prices are helping and may help reduce fertiliser costs as well whilst there is the possibility that crop prices, and therefore food prices, may go up as a result of shortages/increase in demand.
- As with most things farming, the forthcoming weather will play a big part – anyone betting on a drought and a hosepipe ban!?!
Self Employed Support Scheme (SEISS)
Regarding the Self Employed Income Support Scheme (SEISS), there is a possibility that farmers may qualify for the payment in June. If they meet the income criteria, they will also have to consider if they meet the “loss of profits” criteria. The government have stated that they must have “lost trading profits due to COVID-19” to be able to claim.
We are not sure yet what this means in terms of whether they have lost a little bit of profit, or a lot of profit! If there is no de minimis to the amount of profit lost, most may be able to say they qualify, although the actual wording will not be known until the self-employed have a chance to apply under this scheme. The NFU are currently gathering information from members on behalf of the industry, so that they can assess the business impact, and have data to back up any claims that may be made. I will keep an eye on this situation as it develops.
With valuers now starting to consider 2020 valuations and with some crops having being abandoned or ploughed in we recently spoke to a local valuer about information that they could collect for us that might be useful.
- A note to detail the specific acreage of failed crops,
- A note of the costs associated with those crops up to the valuation date, where possible. These costs obviously won’t want carrying forward at the year-end, but will be “expensed” as a normal cost, with no carrying value.
As always agriculture is a big part of the local economic picture and whilst farmers might not be affected by the lock-down they and their businesses will still be affected. If you have any questions regarding the above note please contact a member of the team.