BATTLE OF LIFETIME NOW
THIS time last year, we said there was no quick fix to farmings ills, with farm incomes likely to remain under considerable pressure through the millennium. However, we did hope the worst might be over.
It wasnt. Agriculture remains entrenched in the deepest recession since the 1930s.
Latest MAFF figures confirm that. The average UK farmers income now struggles to reach five figures, and those in the hills are scarcely making £2000 apiece.
Oilseed rape and potatoes, the two bright spots in the market, have dimmed considerably. Rape is down £50/t on the year, maincrop potatoes by twice that amount. Feed wheat values have slipped back sharply, to around £67/t, since the late-season rally.
Many dairy farmers are receiving 2p/litre less for their milk. And the pig price, after a false dawn earlier this summer, slipped back 10p on the years "high". Only beef and sheep have held their own.
Since the launch of the k in January, the £ has recovered all last years losses, and more. Once again it rides high on the foreign exchange markets. Once again, it threatens to wipe hundreds of millions of £ off UK farming incomes.
It is not just sterling which weighs heavily on UK agriculture. The slump in world commodity prices, triggered by economic troubles in the Far East and Russia, is also to blame. The US is sitting on vast stocks of grain, and pigmeat and dairy products are in plentiful supply. It will be some time before prices recover.
Farmers can expect little help from government. They must adapt their own businesses to Brussels policies and the international marketplace.
There is always room for improvement. Over the next few pages, we look at a range of topics that provide food for thought. Some simply aim to sharpen business practice – buying machinery more effectively, tracking down the best source of finance, sorting out tax affairs. And gaining the confidence of the bank manager.
Others involve bigger changes to the business structure which could save money and avoid unseen problems later on.
And, for those who see no way forward, we examine how a carefully planned exit can go a long way to easing the pain, and perhaps even throw a lifeline to an ailing business.
Of course, there is no simple answer, no magic formula. But UK farmers are a tough breed. Most will battle on through this crisis, and emerge with leaner and fitter businesses with which to tackle the challenges of the new millennium.