SFI flexibility could help de-risk 2024 after challenging harvest, says leading agricultural finance expert

Matthew Waters
Mat Waters

The flexibility offered by the Sustainable Farming Initiative could enable farmers to ‘de-risk’ their operations in 2024, following a challenging harvest this year, according to a leading agricultural finance expert.

Mat Waters

Mat Waters, agricultural partner at chartered accountants Lovewell Blake, is advising those who have faced the ‘perfect storm’ of weather, rising input costs and uncertain output prices to consider incorporating the SFI into their crop rotation next year – without the need to abandon food production altogether.

“This year is proving to be one of the most challenging harvests for many years,” said Mr Waters.  “Not only have we seen a significant increase in input costs coupled with volatility in the prices farmers receive for their crops, but the wettest July for a decade has led to harvests having to be delayed, and to increased costs associated with drying crops which have had to be gathered in less than optimal conditions.

“The weather has also led to significant crop damage in some areas, leading to reduced yields, at a time when margins have been squeezed.  It really has been the perfect storm.”

As farm businesses start to implement next season’s cropping plan, the SFI could offer some respite from uncertainty, without the need to take a long-term decision to move away from food production, said Mr Waters.

“It is definitely worth considering ‘environmental crops’ in place of traditional break crops as part of the rotation,” he said.  “This gives the farmer a guaranteed contractual income, and takes away the uncertainty of production costs for the year.  And it can help with productivity in the long term, allowing time for soil to recover without sacrificing income in the short term.

“This can de-risk a portion of the farm for 2024, making future harvests more sustainable.  The advantage of the SFI over other land stewardship schemes is that it is a menu of initiatives that you can dip in and out of, without forcing farmers to take a long term decision to move away from food production, which many are reluctant to do.”

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