While commodity markets continue to excite the arable sector input costs for livestock are rising at a rate which will be disproportionate to margin. Climate change continues to make the headlines but for producers the next challenge will be to understand their carbon footprint and ways in which they will be able to meet the standards required of their customers. Do talk to our agribusiness advisers about the challenges your business might face in the future.

• EU Farm Ministers are likely to agree to the Fruit and Vegetable reform this week - most areas of change are now clear although agreement will have to be reached on how the crisis funding will work and also how some partial coupling of direct aid will be allowed for a short transition period
• The school fruit and vegetable scheme sought by Commissioner Fischer Boel within the sector reforms should have a budget of €100m from EU funds with national co-funding of at least the same amount. The Commission has said that the scheme would be optional for Member States
• The Commissioner plans to publish a Communication on the 'Health Check' in October to launch the debate. She has hinted that compulsory modulation would be increased to reach 10% by 2013 as a modest proposal. She is adamant that 0.3 ha is too low a threshold for eligibility to the Single Payment Scheme and that it should rise to 1.0 ha as a more appropriate measure to call something a farm. As far as 'capping' is concerned she is now hesitant at the efficiency of such a measure given lawyers' ability to split holdings - however she hinted that the Commission was looking at other ways of dealing with the larger beneficiaries
• According to a Commission Green Paper due to be published this week adaptation to climate change should be an explicit objective of all agricultural and rural development policies and should be fully integrated into both pillars of the CAP. It suggests promoting minimum or zero tillage and makes the case for significant increases in R & D expenditure to look other mitigation measures
• Finally, on the 'home' front applications for HLS seem destined to be challenging with high points targets remaining in place in most regions. As feared earlier in the year a number of farmers who have been committed to CSS for the last 10 years will not be able to upgrade to HLS and will be faced with the dilemma of continuing to maintain those environmental measures without compensation or withdrawing. For most neither will be a decision they will relish taking.