Cutting CAP will send production plummeting, and then what?

To nobody’s surprise David Carter, the agriculture minister of New Zealand, told the International Farm Management Congress in Canterbury, New Zealand, that farming with subsidies was “fiscally unsustainable”. We gave them up in 1985, he said, and it’s time the rest of the world followed our example.

So why did the New Zealand government of the day take such action? The country had run out of money and David Lange, the politician who took the decision, uttered the famous words “Three and a half million people can’t continue to subsidise 74 million sheep”. There were, in fact, 74m ewes in the country at the time and the cuts didn’t stop at sheep. All sectors of agriculture had their subsidies abolished and some farmers didn’t survive.

But many did, not least because the government cancelled debts to give them a chance to make a new start. And to their credit, with the benefit of a favourable climate, a relative absence of expensive regulations and an expanding market in Asia, they’ve done well.

However, the New Zealand sheep flock today numbers only 30m ewes, a reduction that might be good for prices and profits but is not, I suggest, consistent with the need to increase production to deal with world hunger.

Across the Tasman Sea the Australian government also cut aid to farmers. Not as much as in New Zealand but enough to cause problems in a country where droughts last for years and where, as we have seen recently, there are occasional floods. Sheep farmers also suffered badly after the Chinese stopped buying their wool. Before the cuts and other events there were 200m ewes in Australia. Today there are 70m. Ditto on the need to produce more.

Here in the UK, 12 years ago we had 21m ewes. Today, after reductions in support, there are fewer than 15m.

But let’s not restrict our attention to sheep. The UK pig herd in the mid 1990’s contained around 700,000 sows. High feed costs, unilateral welfare regulations and no government aid, has shrunk it to less than 400,000. These days UK pig farmers struggle to supply more than half the pig meat consumed in this country.

Even dairy cow numbers, supported by quotas that could have been expected to stabilise the size of the national herd, have declined from 2.5m 12 years ago to 1.8m today.

Meanwhile, average cereal yields that had steadily increased for years stopped rising before the turn of the century and have dropped a little recently to below 8t/ha for wheat and 6t/ha for barley – despite claims by seeds houses that the genetic potential of new varieties is greater than those that preceded them.

So why all these depressing statistics, which show production trends in the opposite direction to what is needed?

It is irrefutable in my view that lack of profitable prices, reduction in government and/or EU aid and loss of confidence, together with a lack of official incentives, have combined in all of the above cases to depress effort and performance. And the Foresight Report, which called for urgent action to deal with food security here and around the world, has yet to be recognised in UK policies.

We should be grateful, therefore, that the Council of Agriculture Ministers rejected proposals by Caroline Spelman and a handful of others to substantially cut the CAP budget. For the brutal truth is that without aid the majority of EU farms would be out of business. What price food security then?

David Richardson farms about 400ha (1000 acres) of arable land near Norwich in Norfolk in partnership with his wife, Lorna. His son, Rob, is farm manager.

Read more from David and our other Farmers Weekly columnists