If you had to go to the bank and ask for the money to buy a farm and pay for machinery, inputs etc and actually make any money from scratch without subsidy would it be sustainable? and if not what does the future hold?as i see it, in the long term there is no place for un-sustainabilty? and without having a farm handed to you or some other form of income would it be a viable and stand alone business??

would it be sustainable?                No

if not what does the future hold?    Uncertainty!

Yes, because food shortages would soon push the prices of our produce to levels which would more than compensate us for the loss of subsidies, always provided the silly leaders of our country did not allow our marketplace to be supplied by subsidized foreign farm produce.

 I don't think it would be politically possible for any democratically elected Political Party to survive in a really free market, they would be kicked out of office by disgruntled voter at the first opportunity who would be appalled at the real price of food.

Dick

 I don't think we will ever be allowed to get to a position where we can farm wiothout subsidy in this country. Subsidies are the heel of the political boot under which we are trampled. Our is the onlt industry in which those purchasing our products knows our entire cost structure. They know what our SFP is, ELS, Diesel, Fert and now they even demand costings from the dairy boys, and they give them to them! The super markets know exactly how much to pay to keep us under the governments thumb!

Not "allowed" to farm without subsidy? Hmn must have missed that bit of legislation, some of us have a lot of practise at it. New entrants in Scotland like me eagerly await SFP reform. Sometimes you lot don't know how fortunate you are.

Dick:

always provided the silly leaders of our country did not allow our marketplace to be supplied by subsidized foreign farm produce.

 

There in lies the problem for anyone that calls for subs to be got rid off

H H S I thought that the scotish historic way of doing it was the way to go

In this area which has mainly upland beef and sheep farms, the only businesses I can see surviving without subsidy are those larger farms with no debt, that can scale back production and therefore vastly reduce inputs and paid labour. They will produce a fraction of what they produce now, but being large farms will be big enough to produce enough for the owners to live on.

Those of us with debts will find it very hard to survive the first few years until such time that food shortages vastly increase the value of our produce.

Land values will fall ( good news for Glasshouse) but this will leave some in negative equity.

Doesn't sound good, does it ?

 Start up, mortgaging a farm, no subsidy and 'standard practice' farming - in the current climate, not a chance.

We farm with no subsidy here, have a substantial mortgage, and are expanding, but we are a vertically integrated business, bottling the milk.  Neither would survive without each other, as milk can be produced cheaper than we can buy required amounts for, allowing the dairy to make a profit.  The dairy can pay the farm more than the cost of production, but less than the cost of replacement milk, so the farm makes a profit.  So, in a way, both businesses subsidise one another.

Farmer Dan 6465:

  Start up, mortgaging a farm, no subsidy and 'standard practice' farming - in the current climate, not a chance.

I'm sure Farmer Dan has it right especially if by 'standard practice' he means extensive farming with moderate diversification.

All this goes to show subsidies can distort markets. It also shows how the widely disparate needs of French farmers, Greek farmers, Scottish tenant farmers, Welsh hill farmers, East Anglian barley barons, et al, cannot be sensibly catered for in a continental type arrangement such as CAP.

I have always thought that, once food supplies for the population of Europe were assured as they are now 'assumed' to be, then subsidies should be slowly phased out. But, as someone else has said, other continents can influence our markets through 'dumping' excess production and so arrangements such as GATT rules, tariffs etc will still be needed.

We do live in a quickly changing world now, and so the politicians should be prepared to write 'rules' which only apply for a short time and not expect those rules to last for ever. The same goes for the subsidies.

 

for all you ten guys that say it cant be done, one person will go and do it, right under your nose.

there is always a new angle, that is the fun of farming.

going out contracting like jamiev6 may not make a lot of money, but it opens doors.

glasshouse:

for all you ten guys that say it cant be done, one person will go and do it, right under your nose.

I don't recall saying it couldn't be done. In fact, I explained how it could be done on our type of farm. You're right to say that someone, somewhere will do it, but they're a rare breed.

As I've said before, farming may well come out of the CAP reform or total removal of support in better shape (eventually), but there will be many falling by the wayside in the process.

You say there's always a new angle. I won't disagree with you but I'll say this much, on an upland hill farm there will be far less 'new angles' than there would be on a lowland farm which possibly grow anything from veg to arable to livestock. They don't call it LFA (less favoured area) for nothing.

I would dearly like to farm profitably without subsidy, but to do so I would need freedom from interference from the army of jobs-worths who constantly check up on me and dictate how I should manage my own farm.

He his-self:

Not "allowed" to farm without subsidy? Hmn must have missed that bit of legislation

 

That's because it's not what I said, but if you wish to be pedantic, my point was that if a government wants to maintain power over agriculture, a good way of doing it is to have an industry dependant on hand outs that the government controls. Who ever pays the piper chooses the song! It's not in their interests to scrap subsidies and allow farmers to play on a level playing field because they would have "less" power over them.

I would be the first to rejoice at the scrapping of all subsidies...everywhere!

Plus, who does this money actually subsidise? As I've said before, it goes to the machinery manufacturer who charges more in subsidised countries than they do in countries that aren't, it goes to the HMRC with ever increasing fuel duty, and most importantly, it allows the general public to purchase food at below the cost of production via our friends the super markets. Case in point, cauliflowers in west Cornwall are worth 9p each at the moment, yet they are on "Special Offer" in Tesco in Penzance, with cling film on them, for £1. So how much of that 91p is a farmers subsidy and whos getting it?

~So yes, scrap subsidies and end this bull-sh1t!

as cornish says, it can be done without sub, as without sub there would be a higher turnover of farms, and therefore new opportunities for others to come in.

taxation has a bigger influence than subsidy. old farmers dont sell up because of capital gains, so the young generation are kept out.

without sub, rents and land values would fall, so it would be easier to get a start.

 Spikeymikey, Not many answers to your questions.

1) Borrowing and farming without subsidies is possible. As Hhs points out, not everyone currently farming in the UK receives subsidies. I did not receive any when on the Black Isle. I was not producing conventional farm livestock or crops though. Free range eggs, mushrooms, honey, and rabbits for a little while, but had to deliver rabbits live to Edinburgh every 3 weeks. Drummochter pass in winter can be a little unnerving. By sustainable I assume you mean "able to carry on for a few years" in which case I would say it all depends on how much you have borrowed, and it is not possible to answer the question for that reason.

2)  It depends on what you mean by viable. There was a thread on here fairly recently about what you would do with £1m and there was an enormous difference between the amount Hhs decided he needed by way of income and my own view. My wife and I live extremely well on what many people would consider is below the poverty line so far as income is concerned, but she has the ability to provide good food from what we produce and minimal purchases. Admittedly meat is much cheaper than the UK, and wine is almost giveaway.  She does not drive (an enormous saving) and makes her own clothes so far as possible, eg for our son's wedding last year she only needed to buy shoes, a handbag and a hat base. What we do would not be classified as viable by any lender, but we enjoy life.

the cornish ba#t*rd:

~So yes, scrap subsidies and end this bull-sh1t!

Yes I have always said that they can scrap farm subsidies as long as that means everywhere

Anyway I have a little bit of land and i get sent a bit of money each year to keep it looking good I paid for that land with my own money I dont farm it just run round with the topper a bit and trim up the hedge now and then to keep it looking good a few hours work a year and I get a good return on investment.

Farm it and make nothing that would be a bit silly wouldnt it?

 If you really want to scrap all subsidies then you must be honest about what farming actually receives.  Apart from the Single Farm Payment, we do not pay the full cost of fuel, we do not pay business rates, we can put plenty of items down in the accounts that can be fudged into farm activities, we have tax concessions and allowances on new machinery and I am not sure about the rolling over of money from land sales anymore, but there is tax relief on inheritance and many other benefits.  If you replace SFP with tariffs and trade agreements, intervention prices etc, this all costs the taxpayer indirectly or directly by limiting peoples ability to trade with nations outside the agreements.

 

If you take away all of this and other countries still are allowed to export their subsidised goods to us then farming will be bankrupt

If you take away all of this, have import duties, and put it on the retail price of food it might make the August riots seem a bit tame!

ploughshare:

we do not pay the full cost of fuel, we do not pay business rates, we can put plenty of items down in the accounts that can be fudged into farm activities, we have tax concessions and allowances on new machinery and I am not sure about the rolling over of money from land sales anymore, but there is tax relief on inheritance and many other benefits

None of those are subsidies, they are all taxes. Very different things in my mind.

A lot of the countries we compete with have nothing like these taxes to contend with in the first place. At what point does a tax you don't have become a subsidy?

ploughshare, you are starting to believe govt bull *** if you think we dont pay the full cost of fuel.

red deisel is for farming, and is taxed at 13p /litre

DERV (deisel engine ROAD vehicle) is for cars and lorries and is taxed at 80p/litre.

we do NOT use rebated fuel.

in new zealand, there is no tax on deisel fuel, no wonder they are ahead of us.

In reply to the opening question.

 Farming is possibly sustainable without subsidies, it is not sustainable without subsidies on a completely open market.

 We are not a country that can be self sufficient at producing food -we import our major inputs, Nitrogen and Oil.

 Thanks for all the replys! the question has often occured to me so its always interesting to hear others views. I may have the oppurtunity one day to have a go at the family farm myself (but am certainly not counting my chickens!) and dont want to rely on this in anyway until it happens! as to rule out a family dispute would be a tad optimistic! So when looking at the future and at farming in general its difficult to know whether or not to be optimistic? I think that farming (unless on a very large scale) is very much a lifetstyle as well as a business but ive done the figures many times and to look at it as a stand alone business model I wouldnt want to take it into Dragons Den!! On the other hand theres a lot to be said for having the oppurtunity to take on the family business and I hope we can all keep farming!

glasshouse:

for all you ten guys that say it cant be done, one person will go and do it, right under your nose.

 

I also didn't say it can't be done, but in much the same way as OldMacdonald says, you may need to think outside of the box a bit, direct marketing and engaging with end customers, adding value to what is produced.  In my opinion, a subsidy is anything which is outside of an unviable business which keeps that business going - to me B+B subsidises a lot of farms around here, I don't think a subsidy has to come from government.

What I said was that it couldn't be done with 'standard practice' farming.  Buying a dairy farm, producing however much milk and sending it off on the tanker, once proper costs have been taken into account is not profitable in the slightest, and therefore is not sustainable - you may get the borrowings to buy the farm, but if the income won't match the repayments, you won't have it for long - buy with savings, wherever you got those savings from has subsidised the farm - rent, if this is lower than the repayments on buying, the landlord is subsidising the farm.  Your own labour should be valued at the the cost of getting someone else to do the job, otherwise you are subsidising the farm.

These scenarios from the dairy sector can be transferred to any other sector.  So is farming sustainable without subsidy - if the business cannot stand on it's own two feet and repeatedly make a profit, then no.

If you want to test your theory go along to your friendly bank manager and ask for a loan to go arable farming, he will come up with some sort of cost of borrowing for any sum that he would lend you.

Then ask to borrow the same amount to set up in pigs and watch the cost of borrowing shoot upwards. The cost of borrowing is his way of measuring risk and farming without subsidy (i.e. pigs) is possible but much more risky.

personaly i cant wait to see the end of subsidies, just think how many parasites farming has to support, civil servents in defra, rpa etc, etc etc, just imagine a level playing field n actualy being allowed to farm

how do u think the kiwis do it? when they got 9pence a liter for milk it cost 4.5p to prouduce

 Bovril and Glasshouse you will have to convince me further that  having any help from the government, whether British or European, is not some form of subsidised farming.  The only difference with the SFP cheque is that it has been made transparent in a clever political move to control us.  Red diesel is not a subsidy?  VAT paid back?  No rates.  This is all money which could be paid in another country and therefore  farmers in that country will be at a disadvantage to us.

Multi power however much we would like there to be a level playing field in true British playing cricket fashion there never will be one.  Simple things like the poor old Scots at the moment having to keep themselves warm at a high cost in a long winter is very different to farming in the South of France.  Huge differences in the way different countries support (or interpret support e.g. France) their farming.  New Zealand has a lower cost of living, but I admit that they are very hard working and resourceful.

We were not competitive before the Second World War and a lot of our food was imported from abroad, farming went downhill.  When the Germans nailed all the shipping we were in a lot of trouble.  Hence the push after the war to try and ensure that we were never dependent on supplies from abroad again.  (I was born on food rations!!)  Which goes back to my earlier suggestion that we are not just another business but are vital to the nation's security and should be treated and "re-invented" as such.  The cost of subsidising farming is peanuts compared to the cost of subsidising the armed forces or indeed the NHS.  Because of the politics we are now made to feel guitly about the SFP cheque but I suspect that Armed forces personel and doctors and nurses do not feel the same way and do not forget that they receive the whole of their money from the government and not just part of it.