12 December 1997


The bone-in-beef ban

was the final bombshell

to hit an agriculture

already hit by a host

of other afflictions

Suddenly farming is in crisis. Its not that we didnt recognise problems simmering below the surface. They have been obvious for months.

Its more that they, plus a few unexpected ones, all boiled over in the space of a few days.

And an industry still basking in the final euphoria of the devaluation of sterling five years ago has been jolted into the reality of its revaluation since the beginning of this year. I will not detract from widely held sympathy for beef producers whose plight is appalling. But a phone call from a grain merchant bidding me £70/t for feed barley and £75/t for the wheat left in our barn reinforced the gravity of the situation for arable farmers.

We had held off the market in the hope of a price recovery. But as we now know movement has been in the opposite direction since harvest and I am having to adjust my expectations of the value of our remaining stock.

And just as we were coming to terms with the officially predicted drop of 37% in total income from farming for 1997 (which the NFU says is nearer to a fall of 47% when family labour is discounted) the latest BSE bombshell dropped. Whether the removal of bone from beef can be justified by a one-in-50 million chance of infection with new variant CJD I am not qualified to judge. Furthermore I will keep my trenchant but unqualified opinions to myself.

Meanwhile the end of the export ban drifts into the future rather than getting closer. I can understand why tempers flared and Irish burgers ended in the dock at Holyhead. In short the entire industry is in trouble, which is as unusual as it is disconcerting. Either horn or corn can normally be relied on even if the other is in the doldrums.

This time we have been hit by a double whammy and even those farms where there is a balance between crop and stock will be lucky to see either doing well. And as the NFU has said there is almost certainly worse to come. There is no sign of recovery in any commodity and unlike last year next year wont even start reasonably.

Appeals to government to try to limit imports sucked in by the strong pound have so far fallen on deaf ears. Ministers are clearly not worried about farmers. They say the beef sector has had £3.5bn compensation for BSE, and the rest of the industry has received excessive area aid. They believe we can live on our fat and see no need to help – even by applying for EU cash to which we are entitled and which other countries farmers have already received.

Farm minister Jack Cunninghams new advisory group provides a clue to his priorities. It numbers 10 in all and contains four economists plus one other minister, also from an economic background; two conservationists; one head of a consumer group; one special political adviser and one farmer.

The farmer, John Cousins, also has environmental leanings among which is the chairmanship of the Suffolk Wildlife Trust. No problem there; I claim to be a bit of an environmentalist myself. But it is impossible to escape the conclusion that the practicality of farming and the reality of the problems discussed above may be swamped by other interests. But I wish John Cousins well and hope he has a loud voice.

But while most farmers are sinking deeper into the mire the price of land stays buoyant. I was treated to lunch the other day by one of Britains biggest land agencies. When I raised the question of land prices I was told it was expected they would stay at or close to current levels for at least two years. How can that be, I asked, with profits disappearing from all types of farming enterprise?

"There is no shortage of money" came the reply "and we have several potential buyers for every decent farm that comes available. You have to remember," my informant continued, "that some farmers did very well a year or two ago. They invested wisely, the stock exchange has grown enormously, and some of that profit is now being used to buy land.

"Substantial amounts of roll-over money are still looking for a home, especially since the Chancellors Green Budget left a capital tax loophole which may be closed next spring. And then theres the City which is awash with money."

He went on to tell me of the six-figure sums earned by large numbers of individual money managers from commissions and takeovers over the last couple of years. Many of those individuals want to invest in farms and their main priorities are often the house and the shoot. Hence the high price of land which is even less relevant than usual to its profitability.

We live in a free country and I would not want it any other way. But, as Ian McNicol, the new president of the CLA, said at the same land agents lunch "it sends out the wrong signals". For anybody reading the property pages of newspapers would naturally assume that all was very well indeed.

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