Leaving the EU should prompt Welsh farmers to evaluate their businesses and prepare them for the future, according rural financial experts.
Farming businesses have been urged to look change in the eye ahead of the impending Brexit outcome.
Jeremy Moody, secretary and adviser to the CAAV, has stressed the importance of assessing all options for the farm and looking at external pressures and internal issues.
Welsh farmers can expect to see BPS phased out between 2022 and 2025.
There is an outline proposal for a single Sustainable Farming Scheme, which will combine land management and public goods, improved economic resilience and productivity.
Though the details of the future policy are not yet set in stone, there’s plenty farmers can do now to plan ahead, Mr Moody said.
Farmers wanting to improve their profits should watch margin: “Watch the net margin, not the gross cash flow,” he advised.
“Take stock of where the business is now, and where the family is. Ask where you want to be in 10 years and how you could get there?
“What strengths and weaknesses there are and what outside pressures are prevalent? This will help to highlight what steps can be taken to make improvements.”
Adopting new machinery and technological innovation is also a large part of the process towards profitable farming.
“Farmers might want to assess if they actually have too much machinery, and whether there’s ways to cut back or machinery share to cut costs,” he added.
However, restructuring a business had tax consequences: “Essentially, tax reliefs are more benign that they were or are perhaps likely to be in future.
“Farmers can claim up to 100% Agricultural Property Relief, full Business Property Relief, have no tax on lifetime gifts and claim Entrepreneurs’ Relief. Delays might see this change.”
Opening up land occupation to the proficient can get the very best out of it and so enable profitable farming enterprises, Mr Moody said.
“It’s not about challenging ownership, but about finding the best occupation and use the land is suited to.
“Letting land may offer a better and more secure income than continuing to farm if your heart is not in it.
“Existing landlords and tenants need to work together to maximise prospects between them,” he said.