The coming 12 months will pose some of the biggest challenges for farmers in the South West but there will be “opportunities to be grasped” as changes take place in the agricultural industry.

Thomas Rattray, of constultants Savills is confident the challenges will be met.

He told South West Farmers that changes to the Single Farm Payment and budget cuts within government departments would be one of the most major issues playing an important role.

“This year the Single Payment will be based on a ratio of 90 per cent flat rate and ten per cent historic element, against a 75:25 split in 2010. From next year it will increase to 100% area payment. For many farmers this will mean a cut in direct support, which must be budgeted for.”

Reform of the Common Agricultural Policy would also lead to greater modulation of money away from direct aid to fund environmental schemes and rural development.

“But Defra has been tasked with cutting costs by 29% between 2010 and 2011, which could pose difficulties for farmers seeking to access such funding,” he added.

Environmental schemes had already been affected, with new applications delayed until at least April. “Some options, like payments for open access, have been removed, although funding for capital works seems, for the time being, to be largely unaffected.”

There were lots of opportunities for farmers to mitigate these changes, and indeed capitalise on new or ongoing grant schemes, said Mr Rattray.

“With everyone seeking to save time and cost, on-line submissions for the Single Farm Payment are likely to increase. Make sure you register early, as the earlier the forms are submitted the lower the margin for error.”

Keeping up to date with Cross Compliance, Soil Protection Reviews and on-farm inspections would reduce the risk of Single Payment penalties. Claiments under both the Single Payment and Environmental Stewardship Schemes should be ready for payments to move onto an annual cycle from June 1.

In the South West, funding for many valuable grant schemes is set to continue. Farmers can still access the South West Agricultural Resource Management Initiative (SWARM), which encourages efficient resource management to reduce costs of production.

“Farmers can benefit from free professional advice and grants for items such as soil aerators, rainwater harvesting, precision farming equipment and slurry injectors,” said Mr Rattray.

The South West Healthy Livestock Initiative (SWHLI), recently rolled out across the region, would help improve disease prevention on farms. Funding was already available for training days and had helped to set up the TB Advisory Service, which offered free advice and grants to farmers operating under TB movement restrictions. “Some larger grant funding opportunities will be available through 2011, particularly in Cornwall, to assist with setting up added value and agricultural diversification projects and enterprises,” said Mr Rattray. “There are still many opportunities for all streams of agricultural business, but under the current economic climate standards need to be high and applications timely. Farmers should therefore take professional advice to make the most of the options available.”