‘Frugal’ UK farmers are facing rising costs – resulting in them taking on more debt as well as ensuring they are making the most of grants and subsidies available to them, according to new research from wealth manager Investec Wealth & Investment (UK), with 100 freehold farmers across the UK.
Two out of three (66%) farmers surveyed have experienced rising costs over the past two years, with 10% of these saying costs have risen dramatically.
A further one in five (21%) say that their costs have stayed the same, with only just over one in 10 (13%) saying their costs have fallen.
Of those who have experienced a rise in costs, these have increased by an average of 12.92% in the past two years.
However, over a quarter (27%) say they’ve gone up by more than 15% in this time frame. Half (50%) say they’ve gone up by between 10% and 15% and almost one in five (18%) say they’ve gone up by between 5% and 10%. Just one in twenty (5%) say their costs have increased by up to 5% in the past two years.
This is despite the vast majority of farmers (73%) describing their farm as ‘frugal’ when it comes to keeping costs under control.
The research by Investec Wealth & Investment (UK), which helps clients reach their financial goals and navigate life’s journey through financial planning and investment management services, also reveals that one in three (33%) describe the current level of debt in their farm as high or very high.
A further 40% say they currently have moderate levels of debt, and only 24% say it’s low. Just 3% describe their debt level as very low.
Maximising Grants and Subsidies
Farmers are focused on securing government grants and subsidies, and positively more than a quarter (28%) surveyed think that they’re excellent at making the most of incentive programmes designed to support farmers.
Just under two-thirds (59%) think they are good at doing this and more than one in 10 (13%) say they’re average.
This is certainly helping their outlook, with more than one in 10 (11%) describing the financial health of their farm as excellent and seven in 10 (69%) describing it as good.
One in five (19%) say it’s average and just 1% say it’s very poor.
To make the most of the grants and subsidies available, almost all (97%) of the farmers surveyed get some form of help when applying. The most popular option is to employ a consultant or adviser (71%), but more than half (53%) say they get help from a family member or employee.
A quarter (25%) opt to speak to a community or industry organisation.
There was a mixed response from farmers about how easy or not it is to complete the regulatory paperwork for their farms.
Just under a third (30%) of those surveyed found it quite easy, with 2% saying it was very easy to complete. Another third (29%) said it was OK, while a slightly larger 37% said they found it quite hard.
2% said they found the regulatory and compliance paperwork for their farm very hard to do.
Increasing Financial Pressures
Scott Jones, Divisional Director – Southern Offices at Investec Wealth & Investment (UK), said: “The pressure of rising costs on their balance sheets is just one of several challenging external factors facing farmers at the moment.
“While this is resulting in some having to increase their debt levels, our survey shows that a large majority are making the most of the government subsidies and grants that are available to them.
“It’s also very positive to see farmers getting the help they might need to access these, in order to benefit from the support they provide.”
“Investec Wealth & Investment can provide farmers and landowners with a range of financial planning and investment management services, to help navigate their way and ensure their assets and wealth grow and are protected.”
James Gower, Managing Director of The Game Fair, commented: “The findings from the research highlight key factors affecting the farming community which is an important part of the future of our countryside.
“Our partnership with Investec Wealth & Investment (UK) is at the heart of our drive to create the perfect opportunity at The Game Fair for farmers to come together to share values, discuss the latest topics and find solutions to the challenges they face.”