Smallholders should not fear recession

PUBLISHED: 15:11 05 January 2009 | UPDATED: 08:29 28 March 2014

There are 10 reasons why a full-time smallholder has nothing to fear from the recession, says Country Smallholding writer Dot Tyne.

• Falling property prices: Although house prices have fallen, the value of agricultural land has remained high. This safeguards the smallholder’s net worth and equity, meaning that the bank shouldn’t get too jumpy about any debts secured on the property.
• Interest rate cuts: Great news for anyone who took out a flexible small business loan in order to get their smallholding venture up and running! Repayments on a typical £30,000 loan (borrowed over 20 years) have fallen by around £50/month.
• VAT reduction: If you’re VAT registered, the cut in the standard rate will ease quarterly cash flow, but have no overall net effect on your financial situation. However, if you aren’t registered for VAT (and a surprising number of smallholders aren’t), then now may be the time to replace worn out bits of equipment, buy in fencing materials, or up-grade your livestock accommodation.
• Increase in higher rate of income tax: Not applicable, as you’re unlikely to earn enough to have to pay any tax at all, let alone the higher rate!
• Increase in NI contributions: Full-time smallholders may qualify for a low earnings exemption certificate.
• Increase in fuel duty: Hopefully this will encourage shoppers to buy locally, which is good news for small scale food producers. Smallholdings tend not to be heavily mechanised, so this increase shouldn’t add too much to running costs. Also, the full-time smallholder doesn’t need to commute to work!.
• Currency exchange rate: All EU farm support payments are calculated in euros. The recent weakness of the pound means that UK based claimants of Single Farm Payment (including smallholders) will receive a higher payment than last year (an extra £1 for each €10).
• Everyone needs to eat, so there’ll always be a market for smallholding produce.
• Financial constraints may re-focus the mind, and encourage the general population to appreciate the simpler things in life. Then, perhaps everyone will realise that we smallholders were right all along!
• Job losses: If you aren’t already a full-time smallholder, perhaps you soon will be. Don’t worry – at least you won’t starve!

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