Food, Farming and Countryside Commission

Rethinking stocking levels

By Chris Clark

Nethergill Farm, Yorkshire Dales

Nethergill is a hill farm in the Yorkshire Dales. The land rises from 350m (1150ft) to 550m (1800ft) and is 160 ha of often sodden ‘soil’ consisting largely of peat, and on the wetter land, blanket bog. Chris & Fi Clark manage livestock according to their own stocking principles and carry out a range of activities – eco-holiday letting, producing sustainable ready meals – that make use of their best asset: the landscape.

My wife, Fi, & I bought Nethergill in 2005. We met at Seale-Hayne Agricultural College in 1976, decided to marry in 1979 and in the same year set ourselves the target of buying our own farm before we were 50. It took us 26 years to raise enough capital and find the finance, but we took over in 2005.

We continually wrestle with the disadvantages of elevation, precipitation, latitude and geology, and for the first few years we tried to counteract these disadvantages by adding cost: purchasing concentrates, fertiliser and veterinary medicines. We struggled with both profitably managing the livestock and successfully controlling the cash flow.

Eventually we started reducing stocking rates and found that, not only did margins improve, but there was a corresponding improvement in biodiversity. Not immediately, but gradually. Flora, fauna and mosses all increased in number and species.

Moreover, we started to sweat our assets, realising that our biggest business asset is the landscape in which we live and farm: developing eco-holiday lets, a nature barn, bird hides, bird feeding stations, and a partnership with a local chef creating ready meals from mutton and

Whitebred Shorthorn beef. This approach has revolutionised our cash flow and our accounts.

In 2016 I was asked by Nidderdale AONB (funded by The Prince’s Countryside Fund) to analyse 14 hill farm accounts. The results were extraordinary, and the findings and characteristics found have been replicated on all subsequent farms. By the end of 2019 over 40 hill farms will have been evaluated. Some of the findings include:

1. Whilst much has been done to make farmland more productive over the centuries (through capital investment to ‘improve’ the land – through, for example, de-forestation or drainage), it has had little impact on the fundamental viability of hill farming. 2. Since 1945, one-off capital investment has largely been replaced by annual programmes of investment to try to correct the fundamental natural deficiencies of the uplands, such as poor soils, latitude and elevation. This includes the use of artificial fertilisers or purchase of concentrates. This has enabled hill farmers to increase the number of livestock to levels well above the natural carrying capacity of the land, generating significant additional income, but not additional profit. 3. Our direct experience of farming at Nethergill Farm, and the experience of other hill farms, has prompted this thesis for hill farming: If there isn’t enough natural grass, no amount of corrective economic action can make the farming any more profitable. 4. This has significant implications for current stocking rates, and is characterised by ‘nonlinear’ variable costs rather than the economies of scale normally assumed to exist. That means that: the more stock that a farm attempts to produce, the more the actual profit decreases – this is true to a point that many hill farmers have now reached without realising it.

Contrary to the received wisdom, and counter-intuitively, the economic reality is that reducing stocking rates (to the ‘sweet-spot’ – the naturally sustainable level) produces the maximum profit. It also naturally starts to generate significant environmental improvements; improvements that, with the current Defra thinking, would appear to be eligible for the highest level of any future ‘payment for public benefits’ policy currently being promoted by government.

What, if anything, would I do now if I was starting again? Three things:

  1. Test the business theory and models advocated by those that are supposed to know.
  2. Actively and regularly manage and monitor my business profit and loss in conjunction with a cash flow budget.
  3. Not necessarily listen to the advice of my accountant, whose role, first and foremost, is to mitigate my tax liabilities.