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The long term cost of flooded farms

| Mark Chatterton | 13 December 2019

With vast acres of fields across Lincolnshire and North Nottinghamshire having been flooded, and with many still inundated, the situation is very serious.

As head of Agriculture at Duncan & Toplis, I work with over a hundred farms across the area and I've seen the scale of the flooding and the damage it's caused firsthand. We've had wet autumns before over the last twenty years, but we've not had a situation as bad as this for a very long time.

While the immediate problem has been severe, the consequences will be deeply felt by many arable farms for years to come, leading to a poor harvest in 2020 and poor cash flow in 2021 as a direct result of the recent flooding.

Unfortunately, the floods came at a peak time for winter crops to be planted, particularly for the drilling of winter wheat. Sadly, because of the flooding, many farmers in our area have only been able to drill around 10-20% of their winter wheat while others haven't managed to plant any at all.

This means large areas of land which will be going unused. Some of this could be used for Spring crops, but the yields on these aren't as high. There is also potential for sowing other varieties of winter wheat which could be drilled in January, but this won't be an option for the most badly flooded fields which won't be accessible by large, heavy machinery until April.

Overall, I expect winter wheat crops across the county to have been reduced by more than 50%, with 20-30% of fields going completely uncropped over the next year.

We can expect this to lead to a large reduction in income with farmers being increasingly reliant on subsidies. Meanwhile, unavoidable fixed costs for labour, machinery and depreciation will severely reduce profits.

My advice to farmers is to create a cash flow forecast and understand the impact that this situation will have on your farm for the next two years because 2021 will be when the cost of this will be most keenly felt.

Farmers will now need to look at ways they can reduce their costs over this period, putting off investments in property, capital projects and repairs and looking at drawing on their private capital. Tax planning will also be important as many farms will have large bills to pay on last years more successful harvests.

Given the serious challenges ahead, I'd urge farmers to seek out professional advice and support immediately. The specialist agriculture team I lead at Duncan & Toplis, which has offices across the area, will be able to help many farms that have been – or will be – affected.

While the worst of the flooding might be behind us, the long-lasting consequences for farms in our area are very serious indeed.

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