Press Release (19 October 2007)

Bank of Scotland - Changing Times For Farmers

As we approach Agriscot, Scotland's largest farm business event on the winter programme, it is at the end of an eventful year. The livestock sector has been traumatised by Foot and Mouth and now Blue Tongue has reared its head. Although we have not had either disease in Scotland it has ravaged the marketplace with a particular detrimental effect on the sheep trade.

Meanwhile, cereal farmers are enjoying a huge turnaround with grain achieving prices they could not have dreamt of 12 months ago, while the dairy sector continues to make good progress in terms of milk price, instilling some optimism back into the industry.

As well as coping with the aftermath of Foot and Mouth, the livestock sector is facing a large increase in feeding costs on the back of the cereal boom and faces a huge challenge to recoup these costs through increased returns from the market.

Over the next two to three years as modulation starts to bite on the SFP, it is even more important that farmers look to become even more efficient and constantly challenge the way they do things in an effort to improve financial performance.

It is becoming ever more apparent that the efficient farmers with sound management systems will be the key players going forward and it is essential that people try and benchmark themselves against the excellent in their particular sector and look to push their performance towards these levels.

We have seen the launch this summer of Scotland Food and Drink. Food and drink is the biggest manufacturing sector in Scotland and the new organisation, which has the support of all the key stakeholders, aims to build on Scotland's international reputation. It also wants Scotland to be known as the land of food and drink and to be renowned as a leader in collaborative supply chains.

Towards the end of November, we expect to see the publication of the discussion document for the mid term review of CAP which is likely to flag up one or two key changes probably around set aside, milk quotas, capping, and a move away from market support to environmental issues.

The Scottish Executive published its Scotland Rural Development Programme (SRDP) on 24th July and set out the programme to deliver support measures under the various elements. This will mainly be delivered through Rural Development Contracts and once approved by Brussels, it is hoped that applications will get under way early in the New Year with the first payments being received in the Spring of 2008.

All in all, it is a rapidly changing marketplace but there is a degree of optimism out there and there are indications that farmers are now looking at the various options open to them.

Bank of Scotland Corporate is delighted once again to be main sponsor of AgriScot.
I am sure it will be a great event even without livestock…so have a great day out!

John Taylor
Director of Agriculture (Scotland)
Bank of Scotland Corporate