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2009: Key industry figures look ahead

What are the big issues facing farmers in 2009? Key industry figures do a bit of crystal-ball gazing to predict the future

Joanne Denney-FinchJOANNE DENNEY-FINCH

Chief executive, IGD

The critical factor for farmers in 2009 will be the reaction of shoppers and retailers to the recession. With the downturn deepening, it is difficult to feel optimistic about the year ahead. However, the food and drink sector is more recession-resistant than most others.

Over the past 20 years shoppers have developed many new tastes, habits and values, such as for organic and high welfare. This year people will be seeking value for their values rather than abandoning their ideals. There will still be opportunities for farmers to diversify.

The weak pound will help us to compete in overseas markets, although it will make imported inputs more expensive. Food waste will be strongly discouraged and with the help of the relaxation of EU rules about perfectly shaped produce, growers will be able to sell more of their crop.

John UffoldJOHN UFFOLD

Auctioneer at McCartney’s Ludlow market, Shropshire

There are four key issues facing the sector in 2009 – the strength of sterling, the general economic downturn, TB restrictions and the supply of cattle coming forward.

All the time the euro is strong against the pound, it will help exports. There’s more influence on lamb prices than anything else.

But agriculture is not immune to the economic downturn and as consumer spending tightens, so the demand for cheaper cuts of meat will increase, while premium cuts and steaks become less popular.

An ongoing issue, particularly for store cattle, will be TB policies. The Welsh Assembly seems to have a more positive plan than Westminster, and it’s a debate that’s going to continue.

Finally, beef cattle supply could struggle, due to the popularity of dairy-orientated Holstein crosses.

Peter KendallPETER KENDALL

NFU president

The global financial meltdown will continue to have an impact on the UK economy.

It remains to be seen how hard British farming will be hit and in particular whether people who have built a high-quality, high-value market will be able to survive the tough economic conditions.

There is some encouragement in falling input prices. Our aim as a union will be to continue to push for greater transparency in input pricing and in the prices that we are paid for our produce. The government said it would give us parity with farmers in the wider EU after the recent CAP health check talks. We shall be making every effort to ensure that they keep to that promise.




2009: Key industry figures look ahead

What are the big issues facing farmers in 2009? Key industry figures do a bit of crystal-ball gazing to predict the future

Gareth VaughanGARETH VAUGHAN

President, Farmers Union of Wales

Animal diseases and who pays to control them when they occur are a concern. It would be unfair to burden hard-pressed farmers with extra costs, especially when border controls are inadequate. However, we will be pressing members to help themselves by using bluetongue vaccine in the spring.

I also want to sit down with other relevant industry stakeholders early in 2009 to discuss the medium and long-term implications of the CAP health check for Welsh farmers.

It is very important that the Welsh assembly uses what freedom of action it has to ensure that future policy helps all sectors of Welsh farming.

With 80% of Welsh farmland designated as LFA I am keen to ensure that those who farm there continue to get the support they need, without penalising lowland producers.

Stakeholders also have to model what would happen if Wales eventually moved away from historical to flat-rate single farm payments.

Alistair-MackintoshALISTAIR MACKINTOSH

NFU Livestock chairman

If we are to maintain supply and maintain our own food security we have to have better returns from the marketplace to appreciate that.

Whatever regulations come in regarding EID, farmers will have to work with it, but regulations have to be fit for purpose. I’d like the marketplace to deliver a reward for extra traceability. EID has come in as a disease control measure which is not fit for purpose as it would not prevent such diseases.

I’d like to see movement towards a final resolution on the TB issue in respect to the disease reservoir in wildlife. We need recognition that the disease in badgers needs to be controlled. The government needs to face up to its responsibilities and allow us to tackle the wildlife reservoir.

Jim MaclarenJIM MCLAREN

President, NFU Scotland

The haemorrhaging of livestock from Scotland’s hills and uplands is the most pressing concern of NFU Scotland and is nothing short of a crisis. We are currently in discussion with the Scottish government about finding ways of giving farmers in these areas the economic support they require to stay and produce feeder livestock for the rest of the country. A whole range of government targets – social, environmental and food policy – rely on agriculture being viable in the hills and uplands, and that is not currently the case. We have to find solutions in 2009.

Coming up tomorrow… Peter Kendall, Joanne Denny-Finch and John Uffold

2009: Key industry figures look ahead

What are the big issues facing farmers in 2009? Key industry figures do a bit of crystal-ball gazing to predict the future

Lyndon EdwardsLYNDON EDWARDS

Chairman, RABDF

Milk prices are likely to come under further pressure as processors witness the fact that producers’ input costs are falling – fuel, and more than likely, feed. However, don’t lose sight of the fact we’re under-quota, a trend that is very unlikely to reverse. Furthermore, importing one million litres a day is a far from cost-effective solution for the industry and never before have we seen so many processors actually advertising for supply. Therefore I believe that dairy farmers’ long-term future continues to remain secure, however for those who commit, investment will be essential, together with a willingness to adopt a raft of proactive measures to reduce costs, increase efficiency and moreover, remain competitive.

TB, bluetongue and costs and responsibility sharing will continue to remain high on the agenda. we have to ensure that government agrees policy decisions based on common sense and that add no further burden, cost or otherwise, to dairy farmers.

Patrick HoldenPATRICK HOLDEN

Director, Soil Association

The coming year is quite possibly the most important organic farming will ever face. I believe 2009 marks a whole new chapter of change for the food industry which is facing a crisis because of its dependency on fossil fuels and centralised distribution.

Organic farming has the solution to that crisis.

We have a loyal customer base and the links we have forged with the consumer will ensure organic farming continues to prosper.

But the organic movement is not immune from the economic downturn and 2009 will not be a time for the faint-hearted.

We must respond positively. We will be driving the message harder than ever that organic farming delivers what the public and the government want – a viable, environmentally responsible agricultural industry.

adrian-ivoryADRIAN IVORY

Farmers Weekly Farmer of the Year

For both beef and cereals, keeping costs down will be essential. It looks like 2009 will not be as buoyant a year and paring down non-essential costs will be vital in keeping businesses profitable. We have to work out costs of production and plan carefully.

In the light of the dioxin scare, maintaining consumer confidence in beef will be key. We will need to promote the high-quality British product to encourage shoppers switch from buying high quality beef to low quality meat cuts. We will also have to keep our wits about us with bluetongue and other diseases.

Coming up tomorrow… Gareth Vaughan, Jim McLaren and Alistair Mackintosh

2009: Key industry figures look ahead

What are the big issues facing farmers in 2009? Key industry figures do a bit of crystal-ball gazing to predict the future

George DunnGEORGE DUNN

Chief executive, Tenant Farmers Association

We have come through a year where landlords have had an inflated hope of getting rent increases on the back of good commodity prices in 2007. We are now seeing landlords focusing on the value of residential elements of the farm and are seeking to try to over-inflate rent that a tenant can’t pay. We are going to counter the landlords who will make things difficult for tenants.

Chris SmithCHRIS SMITH

Chairman, Environment Agency

The interaction between water and agriculture is one of the main work areas for the Environment Agency in 2009.

As the climate changes, farmers face the prospect of more flooding, less water to irrigate crops, more pests surviving the winter and more heat stress in stock.

A six-month public consultation has just begun to develop a draft River Basin Management Plan for each of the 11 major river catchments in England and Wales.

But farmers can make the biggest difference. By being smart about nutrient inputs, farmers can reduce run-off into rivers and streams and save up to 30% of their annual variable costs by retaining topsoils, seeds, fertiliser and pesticides.

Mick SloyanMICK SLOYAN

Chief executive, British Pig Executive

While things are looking better in the pig industry than they were a year ago, we still need to work to get an adequate price for pig meat, one which reflects higher costs of production. If we don’t succeed, we will see more people going out of businesses.

We will also continue to try to build demand for pork and pork products and key to that will be getting clearer labelling. The situation in Ireland has shown the importance of traceability, but it has also bolstered demand because people want to know they are eating British produce.

Coming up tomorrow… Patrick Holden, Lyndon Edwards and Adrian Ivory

2009: Key industry figures look ahead

What are the big issues facing farmers in 2009? Key industry figures do a bit of crystal-ball gazing to predict the future

Nick OakhillNICK OAKHILL

Senior trader, Glencore Grain

One of the biggest challenges for arable farmers will be how to make a silk purse out of a sow’s ear and get a decent wheat or oilseed rape crop out of this autumn’s difficult conditions. Rape looks dreadful and wheat’s not much better.

On the pricing side, I’d like to see more stability. I think it will come, but we’ve got to get back to looking at the fundamentals, rather than the outside factors we’ve seen this year.

We’re all going to have to face up to the challenges of tightening food safety, which was highlighted only too well by the dioxin issue in Ireland. For arable farmers, mycotoxins in particular can only get worse, especially if we have more harvests like this year.

Bring on the Ensus bioethanol plant on Teesside! We’re expecting it to open in Q2 2009 and take 1.2-1.3t of grain. Even if it doesn’t affect farmers directly, indirectly it will, by creating extra demand for home-grown wheat and supporting prices.

Peter MorrisPETER MORRIS

Chief executive, National Sheep Association

The biggest regulatory challenge is electronic identification of sheep (EID). We will continue to object to it, but if that battle is lost we will talk to government about how the regulation will be implemented to cause the least amount of pain for the industry.

The biggest animal disease is, and will continue to be, bluetongue, and the biggest market and supply chain challenge is to ensure that we maintain consumption and develop our export market in the face of a recession.

The other long-term challenge is to start to recognise as an industry the benefits we can take from improving our understanding of genetics and breeding and the benefits this could bring to the national flock.

Richard LochheadRICHARD LOCHHEAD

Scotland rural affairs minister

The coming year will be a pivotal one for agriculture. Many big decisions need to be taken that will set policy for the years ahead, including the future of the Less Favoured Area Support Scheme, a review of the Scottish Rural Development Policy to ensure it is delivering the solutions rural Scotland needs and how best to implement CAP reforms But our position is a positive one. Scots are known for their entrepreneurial and inventive spirit and we will do all we can to ensure that continues to thrive in rural Scotland in the year ahead.

Coming up tomorrow… Chris Smith, George Dunn and Mick Sloyan

2009: Key industry figures look ahead

What are the big issues facing farmers in 2009? Key industry figures do a bit of crystal-ball gazing to predict the future

Dai DaviesDAI DAVIES

President, NFU Cymru

I am determined to do all I can to support efforts by Wales’ rural affairs minister Elin Jones to eradicate bovine TB. I know members fully back the minister’s £27m programme, especially her courageous decision to authorise a limited badger cull.

Another priority will be to persuade Welsh farmers to vaccinate against bluetongue and to press for a watertight ban on livestock importations from countries where the disease is rife.

I also want to ensure that Less Favoured Area (LFA) boundaries are protected and that lowland farmers do not lose out through the redistribution of money under Axis 2.

Farming is all about confidence, and producers need to know that they will get the support they need to stay in business.

Andrew Shirley

ANDREW SHIRLEY

Head of rural research, Knight Frank

The biggest issues facing the farmland market this year are uncertainty over future values and access to credit.

After exceptionally strong growth in the first half of 2008, prices in England peaked at £5100/acre, but are now weakening. Potential buyers are waiting for values to fall and the market has virtually ground to a halt.

Any upturn in grain prices should increase farmer optimism and we could start to see an upturn in activity this spring.

But despite remaining broadly supportive of farming, bank lending criteria has undoubtedly become tighter and this is making it harder to wrap up deals.

Coming up tomorrow… Richard Lochhead, Peter Morris and Nick Oakhill

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