"Farming must make sure that it does not miss out on a time of potential opportunity as we start the new decade," said Nigel Davies, HSBC’s Regional Agriculture Banking Manager for Wales, at a recent Mid-Gwynedd NFU Cymru Annual General Meeting.
During his keynote speech Mr Davies said, "Whilst farming is undoubtedly getting more complex and challenging in many ways, with a relatively stable and favourable prognosis on SFP payments, base rates of interest and exchange rates, then it is a relatively favourable environment in which farmers should consider future investment and not miss out on opportunities that present themselves.
"The favourable public opinion for farming and the potential for future income streams from addressing climate change and renewable energies also make for a time of potential opportunity."
In assessing opportunities, Mr Davies, emphasised that farmers need to look at the whole picture advising them that there is no more straightforward financial management message available than to compare costs and outputs in the same language, that is per tonne, per litre or per kilogramme.
His message to farmers came following HSBC own budget planning, which proved that in all but one agriculture sectors, the output prices was less that than the cost of production and so each sector needed subsidising from the single farm payment receipt of which is, of course, not conditional on production.
"This should really be a message as much for consumers and policy makers as it is for farmers – how long can or should the production of food in Wales be expected to make a loss?" added Mr Davies.
During the meeting, NFU Cymru members raised particular concern for the young farmers attempting to secure a prosperous future in the industry. In his response Mr Davies said, "I am always encouraged by the new entrants in this sector, however I appreciate that the price of land is expensive and tenancy is becoming far more competitive, but if young people have the confidence and necessary business skills to commit to the future I’m sure that the gloom that pervades some should not cloud a brighter farming future. On balance, I am more enthusiastic than concerned about the future of agriculture in Wales.
"Bank borrowings continue to be available to the agricultural industry for the right businesses, but with the squeeze on capital worldwide, the cost of these borrowings above the base rate is likely to continue to be higher than it has been in the past, at least in the short term. Some farmers will also need to look outside the box other than just concentrate on agricultural production. For example production of green energy will continue to increase in importance and some farms are well placed to be able to meet these needs."
During the AGM, which was kindly sponsored by HSBC Bank PLC, hill farmer Edwin Noble, Coed Mawr, Dolwyddelan was elected as County Chairman, dairy farmer William Hughes, Yoke House Pwllheli was elected as Vice Chairman and Merfyn Thomas, Llandudno was elected as County President. The new officers will take Mid-Gwynedd NFU Cymru through until January 2012.
