Stevie Hay is the NFU Regional Board Chair for Orkney, a beef farmer and contractor from Birsay and one of our greatly valued, long-standing clients.
“Birsay is a particularly good place to farm. It has good, fertile soil and relatively dry land. It has a strong, farming community, as does Orkney as a whole. Agriculture has always played a big part in the local economy and wider community,” he says.
He has a common perspective on the agricultural industry having worked the family farm for many years and seeing the regulatory and financial pressures that many businesses are under.
However, Stevie remains highly positive about the industry and has some unique insights and ideas for the future.
For Stevie, farming in Scotland continues to offer plenty of reasons for optimism but the economics of farming have become considerably more challenging.
Stevie says, “since Covid, the cost of almost every major input has risen. Fertiliser, fuel, feed, machinery, etc.
“Scottish farmers have had some protection through direct payments, which remain an important part of farm incomes.
“But those payments haven’t had any meaningful increase over the past decade, so their real-world buying power has fallen significantly as costs have risen.”
What has helped to offset some of that pressure is the strength of livestock prices.
Both cattle and sheep prices have increased substantially, masking some of the impact of higher input costs and creating better margins for producers who have remained in the sector.
Ironically, some of that strength is a consequence of just how difficult livestock farming has been in previous years.
As Stevie says, “when returns were lower, some farmers reduced their sheep or cattle numbers or left the sector altogether. There were also significant labour shortages.
“Environmental pressures were also adding to the challenge. Some of our peers are even struggling with sea eagle attacks on the west coast of the country and have done for some time.
“Separately, geese have been a pest – eating the grass and barley – putting pressure on other areas of the sector.
“So now there’s relatively less livestock farmers and less competition among us, so the prices have increase. It’s a bit of a silver lining.”
In many ways, it leaves Scottish agriculture in an unusual position.
The cost of farming has rarely been higher, but for livestock producers in particular, stronger market prices are finally providing some compensation for those pressures.
As the chairman for Orkney branch and being on the board of directors of the NFU, Stevie travels to Edinburgh for regular meetings with fellow farmers.
However, he says that farmers can often be pessimistic but, in reality, there’s plenty to be positive about.
“We’re always so negative but it’s a fantastic industry to be involved in and the NFU is very respected, helpful and beneficial across Scotland and the wider UK.
“It’s also amazing to see so many young people with a passion and a desire to get into farming.
“They slowly work themselves into places where they have a chance to have a real impact and do amazing things within agriculture,” he says.
Stevie then goes on to explain that there remain a few barriers to entry for younger people, despite that enthusiasm.
“It’s a very expensive industry to break into if you’re young and you don’t have much capital.
“But I’m hopeful that we’ll see some kind of scheme emerge where, perhaps, older farmers rent out their resources to the younger generation and then, one day, they can purchase it for themselves at an effective price.
“As farmers, we often don’t know how great the industry is, but that would be a fantastic way of keeping it going and moving forwards.”
At Scholes, we pride ourselves on the support we provide for farmers whether they’re large businesses or family-owned enterprises.
We work to ease the financial pressures that they’re under, make sure they’re tax efficient and help them develop business plans that suit their specialism.
All of this is done so that they can focus on the important work that they do and continue to provide food for all of us.
We’re proud of our Scottish farmers, like Stevie, and we’d love to hear from you if you need help with tax or accounting.
Please get in touch with Scholes Chartered Accountants for more.
