change – Gill

6 July 2001

At last, a platform for real

change – Gill

By Alistair Driver

PROMISES that farmers will change if the government helps them through another crisis are nothing new. NFU president Ben Gill was at it again this week during his annual state of the industry address in London.

"We know that at the end of the day the only way we will ever recover is to focus even more on the marketplace," he told journalists on Monday (July 2). Only then, he added, will the stricken industry return to profitability.

Critics say Mr Gill has been dishing out the same tired rhetoric ever since he became NFU president in 1998 – with no discernible impact on the way farmers go about their business. This time, however, Mr Gill says the situation is different. A unique set of conditions surrounding foot-and-mouth and the financial plight facing many farmers have at last created a platform for real change, he claims.

For some this may mean quitting the industry. For those that remain, it means thinking exactly about where the food they produce will end up and where it will earn the most money. For too long farmers have been all too happy to produce food and then let someone else worry about selling it.

Mr Gill believes the time is right to encourage more co-operation between farmers, processors and retailers. There is, of course, another side to his vision for industry recovery. He wants a recovery package from the government and he has made it crystal clear how much farmers need and deserve help.

Biggest exodus

In the two years to June 2000, 51,300 farmers left agriculture – the biggest exodus in living memory. Then foot-and-mouth struck. In Mr Gills words, it took the industry "out of the frying pan and into the blast furnace". He estimates that F&M is now costing the food supply industry £250m a month and predicts thousands more farmers will leave an industry already at rock bottom.

Five years ago, the total income from farming was more than £5bn, last year it was £1.88bn. In the 12 months before F&M, the average UK farmer earned just £5200 – plainly inadequate to live on and sustain a business, says Mr Gill. Agricultural borrowing is now at an all time high of over £10bn and farming investment is at its lowest since the 1970s.

Just £7500

Dairy farmers earned just £7500 in the year to February 2001, a fall of 17% on the year before. Of the 65p per litre consumers pay for their milk, farmers get 20p. The situation was even worse for beef and sheep farmers. Hill farmers earned just £3500 while lowland sheep and cattle farmers were in the red. F&M means sheep farmers have lost of an export market once accounting for one-third of output.

Arable farmers are suffering just as much as livestock farmers. Mr Gill wants £34m in agrimoney compensation. Cereal producers earned just £4400 in the 12 months to February 2001 as grain prices fell to £60/tonne last autumn, half their value of five years ago. The situation in many parts of the country has deteriorated further after autumn floods made it impossible to sow crops. Poor growing conditions have followed and this summers harvest is expected to 4m tonnes down on last year.

Mr Gill also wants government funding to help sheep farmers introduce electronic identification to all their sheep. The hard-pressed sheep sector needs emergency measures, possibly private storage aids, to rebalance the loss of exports, he says. F&M movement controls should be relaxed so lambs can be moved to pasture and serious welfare problems are averted.

OTMS scheme

Cattle farmers need to see the re-opening of the over-thirty month scheme, which remains closed because disposal of F&M carcasses is taking priority. Pig farmers need urgent government help in the form of a buy-up scheme for cull sows, 90% of which were exported before F&M.

Mr Gill wants action to prevent F&M entering the UK. He has attacked the government for failing to tighten import controls on commercial and personal meat imports after illegally imported meat was blamed on triggering the epidemic.

Such a scheme will pay dividends in preventing future disease outbreaks, he believes.

As Mr Gill works with the Department for Environment, Food and Rural Affairs on a much-needed recovery programme, his message is that farmers need and deserve help. They care about the environment, and have already entered nearly 1m hectares of farmland into agri-environment schemes.

In return, Mr Gill points out that farming contributes £6.65b to the national economy and forms the basis of the food industry, which accounts for 14% of Gross Domestic Product. The F&M crisis has also shown that farming is the lynchpin of the UKs £12bn rural tourism industry.

Some sectors are already on the road to reform. The pig industry, which receives no direct production subsidies, is perhaps further down the road than most. In a recent draft report, the National Pig Association has already proposed a radical restructuring of the way pigmeat is produced and marketed.

It believes producers must identify new opportunities to add value to their product. The report Challenges and Opportunities, says grants for supply chain initiatives targeting local and niche markets should replace the Meat and Livestock Commissions national marketing campaign which merely encourages consumers to buy more British pigmeat.

NPA vice-chairman Hugh Crabtree, who co-wrote the report, says producer apathy must not be an obstacle to change. "For too long producers have waited to be told what to do. But now they have got to do it themselves by whatever means available to them." &#42

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