Archive Article: 1997/12/13

13 December 1997




Farming recently came under discussion on BBC Radio 4. When the topic moved to falling farm incomes and subsidies, one participant remarked that farmers should be treated like miners. No one disagreed with that comment. The message was clear, agriculture should be treated like any other industry, it should not be given special treatment. If businesses are not viable, let them fail.

I was shocked to hear that food production, peoples lives and the survival of rural communities could be dismissed so easily. But, the unthinkable happened to mining. A once great industry was left to decline and virtually disappear, regardless of the livelihoods and communities totally dependent upon it for their survival.

So, what will happen to farming? Its a fact of life that the profitability of large sections of our industry are dependent upon subsidies. Yet, despite these subsidies, many within agriculture still face difficult times. Our industry has grown into its subsidies and built them into its cost structure. They are reflected in the price of land, rents, wages, machinery and input costs.

But, how secure are these subsidies? We now have a government that will consider cutting benefits to the disabled – a section of the population that enjoys considerably more public sympathy than cereal barons.

Happily, our fortunes are cushioned by Europe. We can relax and settle back, in the knowledge that our futures will sink or swim with those of the more highly valued French or German farmers.

The European link will provide us with a buffer for many years to come. But it will not give total protection. Whenever UK farmers can be denied money for political reasons, they will be. For instance, the £980m compensation which the UK agricultural industry is entitled to under the CAP will not be paid in full, although we are part of a common European agricultural policy.

Ireland claimed compensation under the same scheme. The money then enabled Irish beef producers to receive a higher level of support than their UK competitors – and then dump their beef into UK markets.

Over the past few years, many growers made decisions that are fuelling current financial worries. Encouraged by subsidies and high cereal prices, share farming and rental agreements were entered into with rental equivalents of £375 to £450/ha for moderate quality land, and land was purchased at £8,000 to £10,000/ha. Using forward projections, the decisions looked sound at the time. Now, the reality of lower returns makes them look foolhardy.

A sign of changing farming fortunes is shown by Sentry Farming, an all arable farming company listed on the stock market. It has seen its shares fall from a high earlier in the year of £1.67 to an end of year price of 91p. If the outlook remains bleak, many who have invested their money into farming, but are not committed to the land, will get out, taking their money with them.

Those who have already invested their hearts, souls and a large amount of their lives into farming will keep farming as long as they can make a living. If necessary, accepting a lower standard than the one they have become accustomed to.

If keeping subsidies is a priority then agriculture must play to its strengths. One factor making it substantially different to other industries and in need of protection is its responsibility for the countryside.

The most sustainable way of justifying continued support is by linking payments to specific environmental benefits. It will not be as convenient as receiving area payments but it would be much better than receiving none at all.

Norfolk arable grower Marie Skinner anguishes over the farming industrys future .


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