BEEF and sheep producers have been urged to use the next 18 months to plan how to adapt their businesses for the new single payment system from 2005.

Duncan Sinclair, MLC beef economist, said English producers now knew the new payment would be based on the direct subsidy claims made in 2000, 2001 and 2002. It would be the most fundamental shift in their farming goalposts since the UK joined the EU in 1973.

The precise extent to which decoupling would be adopted in England had yet to be established, along with the detailed rules by which it would work.

"Until then, it is impossible to assess the actual impact of the new system on either the national industry or individual farm enterprises," said Mr Sinclair. "While there are likely to remain major uncertainties on both scores for some considerable time, this should not deter individual businesses from starting to plan ahead."

On the basis of a largely decoupled future, English producers needed to examine how sustainable their farm businesses were likely to be from 2005.

Mr Sinclair said they should seek professional help if necessary to:

* fully cost out their farm businesses without any of the existing direct payments;

* consider the viability of various other potential farming mixes in a similarly decoupled situation;

* assess how different parts of the farm business interrelated and could be adapted to better complement one another;

* closely examine fixed costs and possible ways of reducing them;

* investigate the many different funding opportunities that would become available as part of the increased second pillar rural development programme funding.

"Only by starting to plan now for the future beyond 2004 will beef and sheep producers be able to take positive and timely action as soon as the full details of the reforms are known," said Mr Sinclair.