Rising prices are major talking point

One of the biggest talking points over the past six months has been the rocketing prices of fertiliser and other input costs, closely followed by the dramatic rise in the price of wheat.

The shortage of potash and phosphate and lack of sufficient manufacturing capacity means that fertiliser prices are likely to remain high.

Food prices are substantially less stable. Although the price of milling wheat rose to over £200 a tonne, it should be remembered that a very large proportion of last year's harvest was sold forward at under £100 a tonne, lowering the average to millers.

The increased prices were a result of numerous global factors, including devastating droughts in Australia, massive increased demand in India and China, export restrictions in Kazakhstan and the expansion of energy-crop production.

It is reported that milling wheat on contract for the next harvest has already dropped to £150 tonne and a good harvest globally could knock market prices back further.

However, as wheat prices decline, the price of bread continues to rise. After breaking through the £1 barrier last year, a loaf of bread is now an average price of £1.16 on the supermarket shelves.

But, as consumers, it is important to remember that every £10 increase in the price of milling wheat only equates to 1.5p price rise on a loaf of bread.

For farmers it can be too tempting to plough up former set-aside and dismiss agri-environment schemes. But during a time of global market instability environmental stewardship can provide a much needed guaranteed income.

Most farms have areas of less productive land such as odd field corners, margins and areas that are annually too wet or dry. Often this land is commercially fairly marginal and the application of inputs may be considered as wasteful.

Some stewardship options can also help farmers to comply with environmental legislation such as Local Environment Risk Assessment for Pesticides, Cross-Compliance and Nitrate Vulnerable Zones.

Stewardship options such as arable margins have great value to wildlife by providing vital living and feeding habitat for numerous insects, birds, and mammals. They can also play a valuable role in protecting watercourses from diffuse pollution and soil erosion.

Most ELS and HLS options require some form of management and should be looked upon as another crop, but without the susceptibility to market forces and a guaranteed income of up to £400 per hectare.

If you would like to find out more about Environmental Stewardship, and how agri-environment schemes can fit in with your farming system while enhancing your business income, or require any conservation or environmental legislation advice please contact Julia Bastone at the Staffordshire and Shropshire Farming and Wildlife Advisory Group office on 01785 710564 or email Julia.bastone@fwag.org.uk