Out of money and out of options: Upland farmers in England (part 1)

As part of a new, two-part series, food and farming writer, Marianne Landzettel, meets with upland farmers in northeast England who explain why the shift to the new farm payments scheme – the Sustainable Farming Incentive – poses an existential threat for many upland farmers.

Until the UK left the European Union, farmers received payments based on the acreage they farmed. For farmers in England (as the devolved nations, Scotland, Wales and Northern Ireland develop their own agricultural policies), the Basic Payment Scheme (BPS) is to be gradually replaced by the Sustainable Farming Incentive (SFI), which allocates public money for providing public goods. In June, the Government published a 150-page handbook that specifies how much money farmers can receive for providing which ‘public goods’ and under what conditions. The application period to join individual SFI schemes was scheduled to begin in August 2023, eventually being pushed back by four weeks to open in mid-September.

Relatively few regions in the UK are well suited for arable farming, and most upland areas are ideal only for raising cattle and sheep. In such ‘marginalised’ areas BPS payments accounted for 50-60% of farm income, and on hill farms, it could be more than 90%. It has been clear for some time that SFI payments will rarely amount to more than about a third of what farmers previously received through BPS.

How can farmers close this financial gap? The Government advises farmers to diversify – what are the options? And how do tenant farmers cope – their options for diversification are extremely limited because the landowner has to approve any building work, such as a farm shop, holiday cottage or new barn. And banks are unlikely to lend money to a tenant farmer whose tenancy may or may not be renewed.

Permanent pastures are very biodiverse and a habitat for many different species

In July, I was in Ridsdale, a village about 20km north of the market town of Hexham in Northumberland and visited four tenant farmers. The permanent pastures of the uplands in this area are rich in biodiversity and an excellent habitat, in particular, for ground nesting birds. Farmers Michael Walton, Graham Robson, Nigel Moore and David and Annabel Stanners already farm very sustainably and extensively, but only a small section of the land can be used for feed production, the rest is too steep, exposed and wet. These farmers would love to outwinter cattle on the permanent pastures, but weather conditions are such that they usually have to be housed for a few months.

Michael Walton: cutting costs but how?

The Waltons have been farming for generations. The tenancy is secure for another three years, then the rent will go up, says Michael Walton. At present he farms 485 acres, of which he owns 160. “It’s mostly rough land, it’s called ‘boat fell’ because it is so wet.”

The Walton family’s flock of Swaledale and Texel cross sheep wait for a hoof trim

He runs an 80 head suckler cow herd and 700 Swaledale and Texel cross sheep. Because of the weather, there is more money in sheep than in cattle, he says. If he is lucky, the cows will only have to be housed in January and can be out again by March. But last year, he had to bring them in, in December, and they could not return to the pasture until May, which added hugely to the costs for feed and straw.

Lambing season starts in April. He sells fat lambs, mostly through Dunbia, a large meat processor and food company. It is usually the safer option than selling through auction at the live mart where prices fluctuate a lot: “At the live mart, you have to be prepared to take your animals home again,” says Walton. His goal is to sell 1,000 lambs per year; in 2022 he sold 1,100 – to him that is a measure of running a productive farm and a job well done.

When I arrive on the farm, Walton and his 70-year-old mother, Caroline, are getting ready to deworm the lambs. It’s hard work, but mother and son are an efficient team. While they separate the ewes from the lambs, they check the feet, trim hooves and treat with an antiseptic spray where necessary.

Caroline Walton is 70 but still works full time on the farm with her son

When I ask about the finances of the farm, Michael Walton Jr. readily shares the figures. At present, fertiliser costs £550 a tonne, more than double what it was before the Russian invasion of Ukraine, but down from £750 in 2022. His budget for fertiliser is £15,000. Because of the extreme prices last year, he had to cut down on the amount of fertiliser he spread per acre. As a result, the amount of silage he made was significantly down and he had to buy in more feed.

Walton also spends £15,000 on straw and he has to pay £20,000 in land rent. Some of the land is in a mid-tier Countryside Stewardship scheme which earns him £14,000. Under the EU Basic Payment Scheme, he received £55,000 which made up 50-60% of the farm’s income. From the SFI options available, he will receive £4,000 at best. Which means that by 2027, he will be £50,000 worse off than pre-Brexit.

Walton looks quite stunned when we arrive at this figure. Of course, he knew payments would come to an end, but he never made the actual calculation. “So many of us farmers have our heads in the sand because it is too awful to think about. Instead, we believe that by some magic this sum will be replaced by something, somehow. But it won’t.”

His only option will be to cut costs, he says. Walton reasons that, maybe, he could stop using fertiliser altogether if he reduces the number of cows. There is no doubt that reducing reliance on bought-in fertiliser and feed and adjusting stocking rates to match what the land can naturally support, leads to improved margins, as well as greater environmental sustainability. But even then, the amount of work on the farm would be more than what one farmer can handle. Caroline Walton is fit and in good health, but for how much longer will she be able to continue at this relentless pace? Because of her full-time job as a district nurse, Walton’s wife, Julie, cannot help out on the farm. In future, she may well be the main breadwinner and Michael Walton will likely be unable to continue farming without her off-farm income.

Graham Robson: working more and harder

It doesn’t take long to get from the Waltons to the Robsons – the two families are neighbours. The once cobbled farmyard is enclosed on three sides by ancient stone barns and storage rooms, and on the fourth side is the farmhouse and the entrance to the yard. The farmhouse has been modernised, but the rest of the farm apparently has not changed much since it was built in the 18^th century, and one structure dates back to the 16^th century.

The Robson family

Graham Robson’s great-grandfather got the farm tenancy in 1955, but the Robsons have been farming in Northumberland for many generations prior to that. The farm has 500 acres, 75 of which are suitable for making silage. There are 60 suckler cows and a Limousin cross bull. The Robsons buy in dairy heifers in calf or with a small calf, but “it takes four to five years till you make any money on them, provided you don’t lose a calf,” says Graham Robson’s dad, also called Graham. Ideally, they would like to overwinter all the cattle in a barn, but even though they have invested in a new barn and machine shed next to the road, there is not enough space. Some of the animals have to stay on pasture, but still require additional feed.

The 400 breeding ewes are hardy northern Blackface, they have impressive horns – and a temper. The female lambs are sold for breeding on lowland farms where they do well, they are hardy and fend for themselves. The males are sold for meat.

Graham Robson’s parents still work full time on the farm which leaves him time to do contract work on other farms. His wife Lindsey works full time at Unison Colour in Hexham, a producer of handmade soft pastels. Right now, Lindsey is on maternity leave.

On the day of my visit, the Robsons are shearing sheep. Graham Robson’s dad is waiting for a hip replacement and is restricted in his movements, but he still manages to manoeuvre the next candidate for shearing from the holding pen to the open barn where his son grabs the sheep by the horns and, with a few fluid wrestling moves, secures it between his legs, belly facing up. It only takes him a few minutes to take off the fleece with well-practiced movements, and without nicking the skin. While his father brings in the next sheep, his mother gathers the fleece, carries it next door and stuffs it carefully in one of the wool bags supplied by British Wool. Except for the wool from the few Leicesters they have, which pays five times what it costs to shear, the wool is worthless.

Shearing their own sheep helps the Robsons to save money

Up to now the Robsons have not signed up for any stewardship schemes because of the management restrictions that would apply. They recently hired a consultant to help them work out which SFI schemes might provide an extra income without having to change practices on the farm too much. The ‘Low Input Grassland’ scheme, and ‘Providing Habitat for Ground Nesting Birds’ might be options. The consultant believes that, all going well, the payments for those two schemes could make up for two thirds of the BPS money. For the consultation and filing of the applications, the adviser charged £1,200. Whether the Robsons will get into the schemes and how much they will eventually be paid remains to be seen.

One third of the farm’s income comes from the contract work that Robson does on other farms, such as shearing sheep. To make up for the BPS shortfall, he hopes to increase the hours he can work on other farms. He may also have to reduce stock numbers to save on feed, straw and fertiliser. The plan hinges on his parents continuing to work on the farm full-time. The old barns and storage spaces may look pretty, but they are labour intensive and therefore not really fit for purpose. What happens when the older Robsons retire, or health issues force them to work less?

Graham Robson not only looks after his own flock but also works as a contract shearer

While we talk, Graham Robson continues shearing. He is young, and an extremely capable, fit, strong, fast and focussed worker. It’s so obvious that farming – this farm – is his life and he will do all he can to hold on to it and provide for his family. If George Orwell were alive, he could write a new version of Animal Farm, for farmers like Graham Robson, the motto is: “I’ll work harder.”

All photos copyright and courtesy of @M.Kunz.

This is the first article in a two-part series on the issues facing upland farmers in England. For more on the SFT’s vision of sustainable land use across the UK, including its upland regions, click here. And if you’re a farmer looking for information and resources on navigating the shift away from Basic Payments, head over to the FFCC’s Upland Farmer Toolkit.