Decoupling will open doors for young farmers (From Western Telegraph)

Decoupling will open doors for young farmers

Subsidy reform will create a three-tier farming structure with huge opportunities for new entrants to get a foothold in the industry, predicts the chairman of a group lobbying on behalf of young people in agriculture.

Pembrokeshire dairy producer William Prichard envisages a system made up of the land owner, the holder of that land's subsidy entitlements and the farmer.

"Owners of the entitlements may not want to continue farming the land in the way that they always have because they will be paid a subsidy for not doing it,'' said William, chairman of Future Farmers of Wales. "This would open up an opportunity for someone new to come in to use the productive value of the land at a reduced rental rate. It will become more market orientated as opposed to production orientated. It will become clearer for people to make business decisions because the productive value of the land will be back to where it should always have been.''

William farms a 222 ha dairy unit near Letterston, Pembrokeshire, in partnership with his parents, Alan and Mary. He is the third generation of his family to farm at Esgalwen Farm.

Decoupling will assist young entrants because less capital will be required to get started. At 29, William expects it to open doors that the current system is shutting.

Milk quota holders may decide that it will be more financially viable to claim the subsidy than to produce. "If they pull out it will bring the price of milk quota down, therefore opening up opportunities because less capital will be needed,'' he said.

"There are all sorts of diverse schemes we can think of to get young people more involved in farming through equity partnerships, share farming agreements, whatever. To get the level of scale that will be needed to produce milk efficiently at future prices something will have to change.''

Decoupling will divide farm businesses into two enterprises - subsidy entitlement and production.

"There will be people who will wake up very quickly to the fact that their beef, sheep, milk enterprises aren't making them any money and they will decide to do the bare minimum with the land,'' said William Prichard. "This is where opportunities will arise, particularly for people with a bit of drive, to get out there to find a market for a product.''

A perception that a farmer needs to own land can also be a barrier for young entrants.

But this will change as people from non-farming backgrounds, in particular those with roll-over capital to invest, buy land.

"Current land values mean that it is not a financially viable option to buy a block of land simply to make money from farming it,'' said William.

"As time goes by we may see land going out of agricultural ownership but we will still work the land and possibly have better returns for what we do irrespective of the capital that we have got tied up.''