David Richardson: It’s a country of problems – and opportunities
How would you like to farm in a country where only about 100 pesticides are permitted to be used on crops compared with the 300 or so available in this country?
Where the crop protection products that are allowed are taxed to bring their cost to the farmer up to about double the manufacturer’s retail price?
Where farmland is taxed?
Where VAT is 25% and applies to food and farming as well as other goods?
Where general taxation is significantly higher than here?
And where sons and daughters are not permitted to inherit their parents’ land but must buy it at commercial rates?
It’s not surprising, therefore, that farm debt, three-quarters of which is related to mortgages for land purchase, is high at an average of almost 60% of net worth compared with a little over 12% in the UK. Nor that the number of full-time farmers fell by two-thirds over the past 20 years and the total number, including part-timers, is down by nearly half.
On the face of it, I might be describing an industry on its knees, barely able to survive. And there is no doubt the credit crunch and global financial crisis have caused problems. For banks are reluctant to lend to clients with heavy liabilities and when the value of land declines, as it has where I was last week, there must be many farmers in negative equity.
“But they’ll be OK unless they have to sell,” said one official.
In case you haven’t worked it out, I was in Denmark. And the farming industry did not appear to be failing, despite the problems listed above. On the contrary, agriculture still employs 150,000 people (out of a population of 5.5m), agricultural production accounts for 3% of the country’s gross national product, 12% of overall Danish exports and 20% when the agro-industry sector is included. It’s claimed that Denmark can feed three times its own population.
I was in Denmark to start planning a study tour I hope to take there next May. I used to visit the country regularly, but it’s several years now since I was there and, of course, there have been plenty of changes. But some things remain the same – the warmth of welcome by Danish nationals; their willingness to share information; the efficiency with which they run both their farms and their marketing; and their refusal to be intimidated by the restrictive regulations under which they have to operate.
Take pigs, for instance. The country produces 27m a year. But, because regulations dictate the maximum number of mature animals that can be kept on a hectare is 42 – or, more to the point, the slurry or FYM they produce must not be spread any thicker than that, producers have established a market for weaners in Germany. Eight million a year are now sent to their neighbours where labour is cheaper and the environmental restrictions less severe.
Moreover, 90% of the pigs produced in Denmark are exported to a total of 140 countries. They are even selling products to China these days, a country that produces more than half the pigs in the world. Chief among these products, apparently, are pigs’ ears, cheeks, tails, hocks and offal. And you can’t fault the enterprise of a nation that finds profitable markets for parts of a pig that we in the west are more likely to throw in the bin.
There’s a lot to learn in Denmark and I can’t wait to go back next spring.