After a summer of ferocious weather and diseases many North West rural businesses are struggling to survive. But Lisa Miles finds cause for hope
Ah, the joys of a soggy British summer. Squelching miserably around the Lake District in a downpour.
Blinking furiously into a sandstorm on Crosby beach. Queuing for hours at the airport in the search of some sunshine.
But the torrential rain and subsequent flooding in 2007 was more than just an inconvenience for rural businesses, from farmers to B&B owners. And for many the problems were compounded by the threat of another foot and mouth crisis and now bluetounge disease.
"In the North West, especially in Cumbria, which is heavily a livestock area, over the summer farmers have been consistently hit from all angles, by the weather and then by disease," says Andrew Robinson, partner and head of agriculture at accountancy and business advisory Armstrong Watson.
Livestock farmers who have seen their winter feed crop ruined by wet weather will have to buy in feed that will itself be more expensive due to its scarcity. "The bad weather also damaged yields for crops, but the better weather in August and early September 2007 and a big lift in prices will more than equate for that, so pure arable farmers should be better off," says Robinson.
The bad weather also hit arable farmers who had presold their crops. "Farmers who sold quantities on the back of a good crop are now suffering penalties. And because they had sold on that basis, a lack of wheat means increased prices," says Rupert Jackson, head of the agricultural team at law firm Brabners in Liverpool.
Disease is a constant worry for farmers and for anyone reliant on goods or people moving in and out of rural areas. Some of the movement restrictions on animals put in place after the latest outbreak in August 2007 have now been lifted, but direct financial assistance from government for anyone unable to move livestock is not forthcoming.
The Revenue has agreed to defer collection of taxes and duties and suspend debt collection proceedings for affected individuals and businesses. And the Department for Environment, Food and Rural Affairs (Defra) has been praised for a better understanding of the disease than government displayed in 2001.
But the effects of even this contained outbreak have been far-reaching. "I've been dealing with a client who's trying to get a tenant to sign up for two years and he's saying he can't commit because he can't move his livestock," says Jackson. "He's been a tenant for ten to 15 years, but if he can't get the livestock moved to sire his sheep he won't get any lambs for next year. This will have an impact on cost and there will be a lack of lamb for your Sunday roast."
He expects to see more farms coming up for sale, particularly smaller ones that have had to borrow to survive and are unable to find a successful diversification route. "Bigger farms can weather storms and will end up buying out the small ones, with fewer people owning more land," he says. "That will be beneficial to a certain extent because they will be able to go to the supermarkets with more produce to offer."
Farmland is worth more than it has ever been, mainly because of its asset value. And anyone investing in farmland that continues to be farmed can enjoy certain tax breaks. Many Irish farming families are moving over, attracted by what to them are relatively low prices. Robinson says: "Farmers in Ireland can sell an acre of land for five or six times what it is worth in England or Scotland. There have been quite a few farms in the North West bought by Irish investors in the last few months."
While cash may not be available immediately to deal with the current foot and mouth threat, the Northwest Regional Development Agency (NWDA) did distribute £3100m over the five years following the last outbreak through the Rural Recovery Programme (RRP). The scheme was aimed at agriculture and tourism businesses.
"Things have changed a lot in the last four to five years," says Rob Hindle, founder of economic development and public policy consultancy Rural Innovation in Hothersall, near Ribchester. "Before 2001 there was a well-established rural development scene that was mainly European and government money subsidising farms and rural businesses. Initially it was about crisis management, but it raised rural issues up the political agenda quite quickly and got government attention.
"The funds were mainly spent on improving public sector support structures and on businesses. You can drive around the region and see workspace built in rural areas as a result of that money. You can find new businesses that had access to that money to help them get going."
But farmers are having to draw on all their entrepreneurial skills to deal with the latest threats. Diversification is something of a buzzword in rural business circles, but by branching out into one or two complementary areas, some farmers are able to supplement their farming incomes.
One of the schemes to emerge from the 2001 foot and mouth crisis was the North West Farm Tourism Initiative. Funded with £32.68m over five years, the project helped farmers diversify into any type of tourism-related activity, whether dealing with visitors or selling under a branded product over the internet.
Over the course of the initiative, 91 new farm tourism businesses were developed, 267 jobs created, over 3,000 farm business advised and assisted and 1,400 farms given learning and skills opportunities.
Project manager Katie Read is now natural tourism manager at Natural Economy Northwest, a three-year multi-partnership programme that maximises the economic benefit from investment in the natural environment.
"A lot of these businesses had already done small-scale tourism," she explains. "It had always been seen as secondary, but there was suddenly a complete change of perception and it became the major income source, but allowed people still to farm.
"Farmers are true entrepreneurs and are actually much better at reacting quickly to the market place and developing fantastic packages. They just do it. They've always had to work hard for there market share."
When Insider launched its Save our Rural Economy campaign in October 2006, economic growth in rural areas was being restricted by issues around planning applications for development of both commercial and residential property. Often the problems surrounded questions of access, highways and proximity to workers.
This is still a fraught area, but planning authorities are increasingly open to applications in rural areas. "It's becoming easier to make a case to many of the authorities across the North West to provide new-build workspace and conversions of workspace in rural districts," says Hindle at Rural Innovations, whose business is itself housed in a new-build in the Ribble Valley.
"There's been a more facilitative approach set up from national and regional policy in terms of stimulating economic activity. Ribble Valley were willing to let us build because it's about working close to home, reducing travelling and generating economic activity. They were happy to take a view about how they applied their policy."
One scheme that could help fund renovation projects is the Revenue's recently unveiled Business Premises Renovation Allowance (BPRA), a scheme that will run for the next five years. The allowance could provide an enhanced financial return for rural landowners and farmers.
The scheme encourages people or companies to convert or renovate derelict or unused commercial properties by giving immediate, full tax relief on the capital spending. Until 11 April 2012 anyone wanting to renovate a qualifying property will receive up to 100 per cent of the tax back on their spending, with certain exclusions.
Mike Harrison, partner in the Manchester office of accountancy firm Saffery Champness, says: "As well as straightforward renovations, the allowance gives farmers a significant incentive for diversification. It offers farmers a saving on the practical cost of diversifying their farm business."
Some 80 per cent of the North West is defined as rural, accounting for £321bn of the regional economy, about 23 per cent. With this in mind, the public sector is eager to bring rural businesses out of the cold and into the warm embrace of more mainstream business support.
"We are trying to move away from a position where rural is always seen as a problem area. What we should be focusing on is the contribution it can make to the economy," says Peter White, executive director of development at the NWDA. "It's not just a set of problems. We want to improve productivity, growing the size and capability of the workforce and creating conditions for sustainable growth in the rural economy." Funding is being lined up under the new Rural Development Programme for England, which replaces the RRP and runs until 2013.
But some events will have a disproportionate impact on rural businesses. Farmers, in particular, are fighting the odds to put food on our tables, faced with movement restrictions, increasing costs and battling with supermarket giants over prices.
"We're all running businesses, but farmers are putting in extra hours for less return because of oversupply or supermarkets pushing down costs," says Jackson at Brabners. "Farmers work seven days a week."
In central government three departments - Defra, the Department for Education and Skills and the Department of Health - joined forces in September 2007 to launch the Year of Food and Farming. The initiative was devised to raise awareness of farming and of where food is sourced, a response to findings raised in a report by Dr Aric Sigman called Agricultural Literacy: Giving concrete children food for thought, which found that 20 per cent of children in England never visit the countryside.
North West activities were launched on 26 September at Leylands Farm in Mosley Common, when teachers from across Greater Manchester gathered to learn more about how to reconnect children with the countryside.
Gordon Jones, senior farming and food adviser at Government Office for the North West in Liverpool, says: "If we can start to raise awareness with events and by directing schools and farms to the website it will stimulate long-term interest in issues around food and the countryside. It's not about putting pounds in pockets - it's about creating interest among the customers of the future."
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