In light of the government guidelines, all our offices are now closed and our teams are all working remotely, but are on hand to help you through these challenging times.

For assistance please get in touch with your main contact directly or email our covid19help@armstrongwatson.co.uk. Alternatively if you wish to talk to us, please call 0808 144 5575.

COVID-19 The impact on Agriculture

What is the impact on Farming and Agriculture?

As the COVID 19 pandemic takes a hold globally no one remains immune to the devastating impact it is having on ourselves, our families, the economy and let’s face it, our farms too.

There is some comfort that help and support is starting to be made available, not just via your trusted adviser but also financially at least for anyone that is impacted, and although the news of the recent support for the self-employed has been announced, we are sure that the transition time for this financial support to land is going to be very challenging.

It is critical that food producers and processors can continue to operate effectively and efficiently keeping supply lines open at all times, but with the high risk of human safety being such a high factor, we know that there has never been such an important time to plan effectively.

Preparing for Staff Shortages

There are a number of precautionary steps farmers can take now to reduce the potential impact of COVID-19, particularly if you or those you rely on to work upon your farm fall ill or have to self isolate:

  • Identify who you can ask to help and know what skills or knowledge they need to work on your farm.
  • Write down the daily work plan to include what is happening on the farm, which stock are where, what feed you are receiving, animal health treatments, grazing rotation, etc.
  • Provide operating instructions for all machinery and equipment, for example, the milking parlour routine, the automatic systems in the hen broiler, pig house and don’t forget the things often taken for granted like checking the meal hasn’t bridged in the bin.
  • Assess feed, fertiliser, oil, medicines, disinfectants and other critical inputs. Where stocks are low, replenish but don’t stockpile.
  • Provide everyone with a list of emergency contacts, i.e. the private veterinary practitioner, technical advisers, local contractors.
  • Ensure everyone is multi-skilled where possible, i.e. everyone could milk the cows if necessary.

A shortage of staff may already be an issue – particularly if you rely on EU workers who have had to leave. However, organisations are working hard to supply emergency support and there are opportunities where those who have been furloughed from other sectors/businesses can opt to work in other roles during this time.

The Landworkers’ Alliance are seeking emergency measures and working hard to match potential workers with farmers who need them. The Soil Association, Organic Farmers & Growers and other certification bodies are taking inspections online where needed to avoid risk of spreading the virus and are providing support and advice for producers.

In Cumbria and Northumberland for example, the Farmer Network are currently working on a Farm Labour Emergency Support Scheme to provide a skilled emergency work force to lamb sheep and milk cows should keyworkers on farms become absent. Further details can be found here.

The Association of Labour Providers (ALP) is also running a ‘SWAP’ online portal for GLAA-licenced businesses to share existing farm workers. This may be particularly appropriate for workers in the ornamentals sector who may be able to move onto fruit and vegetable farms. Read more here.

Diversification

The day-to-day work on farms has to continue regardless of what is happening in the outside world. In particular spring means lambing and planting crops as normal. However, for those businesses that have diversified – Holiday Letting, Camp sites, etc. –these areas have been seriously affected, cash flow significantly impacted and you may be well placed to apply for government grants and funding available but please check with your adviser, particularly with regard to any planned lending. Our corporate finance team are on hand to help you with any decisions you may need to make regarding funding options, click here for further information.

Grants are also available from local authorities and most are contacting businesses who may be eligible to claim the Small Business Grant of £10,000 or the Retail, Hospitality and Leisure Grant of £25,000. To find out how your local authority is operating this scheme please click through on the links listed here.

Supply Chains

Supply chains have been impacted as usual routes to market are no longer there, whether that’s restaurants, coffee shops, factories, schools – the list is endless. Whilst there are opportunities to divert produce to other outlets, such as the supermarkets this can all take time. The National Farmers Union's Food Chain team is linking up foodservice businesses with retail supply chains to help provide additional volumes into shops, to make up for the drop in demand from food service.

Government Support for Agricultural Businesses

  • Business rates – traditional farming businesses do not pay business rates and the grants mentioned in the section above on diversified activities are only available if you have at least one business assessable to business rates.
  • The Job Retention Scheme (JRS) – this only applies to workers who have stopped working so won’t apply to many farm workers, however it can apply to staff working on camp sites and other enterprises that are closed. Advice needs to be taken on the employment law issues around “furloughing” staff.
  • The Self-employed Income Support Scheme – this was announced on 26th March and detailed guidance not issued yet. However, details we do have are as follows:
    • Support will be 80% of monthly profits, capped at £2500 per month.
    • It will be based on an average of the three years profits to 5th April 2019. (If this figure is greater than £50,000 then no claim is possible.)
    • The first payment is unlikely to be received before June 2020.
    • Tax returns for the year to 5th April 2019, which should have been filed by 31st January 2020, need to be filed in order to make a claim.
    • A person needs to receive the majority of their income from self-employed sources.
    • Businesses operating via a limited company cannot claim under this scheme.
    • Unlike the scheme for employees, it is not necessary for the business to have ceased trading.
    • It is necessary for a business to have been adversely affected by COVID-19.
    • HMRC has said they will contact those they think are eligible to claim.

In summary, only time will tell how farming businesses will be fully impacted. Hopefully consumers will appreciate locally sourced produce as opposed to food that has travelled half way round the world, but we have to realise that the global economy is on the edge, the environmental issues are still a huge priority but sadly we are not sure at the moment whether this priority is number 1.

Contact Us

For help and advice on how Armstrong Watson can help support your agricultural business through this time of crisis, please contact Andrew Robinson or Keith Johnston.

Andrew Robinson, Accounting Partner

Andrew Robinson

Accounting Partner

Keith Johnston, Tax Director

Keith Johnston

Tax Director