DAVID RICHARDSON
Anyone who works for
DEFRAout there? If so,
please take the time
and trouble to read the
following words
A FEW dry days have enabled us to start catching up with autumn drilling. The land is still turning over like leather and slugs are having field days among the clods. But both winter wheat and winter barley are growing nicely and I am pleased to report that following months of dark frustration my sunny disposition has returned – at least temporarily.
So much so that I want to help our friends at DEFRA understand farming better. Oh, I know they are sometimes impatient with our industry and would be happier if we were not part of their portfolio. But it is only fair to try to explain to them what kind of people farmers are, what makes us tick and why some of the policies they are following will not produce sustainable outcomes, either for food supplies or the environment.
I doubt from DEFRAs public pronouncements that they read farmers weekly. They would surely be better informed if they did. So if anyone knows an official who works for the organisation, perhaps they will be kind enough to tear out this page and pass it on. I will keep it simple so that even they can understand.
The agreed policy of all government ministers is clearly, from recent pronouncements, including those of Lord Haskins, to continue to drive down ex-farm prices until small and inefficient farmers are forced out of business. Large, efficient farmers, the theory goes, will then take over the land vacated by the outgoers. These expansionists will benefit from economies of scale and will be able to produce livestock and crops profitably in open competition with farmers around the world and, crucially, without subsidies. The logic is persuasive. The economics come straight from the textbook. The only snag is it wont work.
If DEFRA readers are still with me and would like to follow further I will examine those theories. First, big farmers can thrive at current world prices without subsidies, which account for about 30% of gross income on most farms. It does not stack up. Export sales, while being vital to some countries, are essentially the market of last resort after domestic needs are satisfied. Prices have little to do with costs of production in the country of origin. They have nothing to do with the costs of production in importing countries. So those countries that exploit land and labour and ignore animal welfare can undercut our costs and survive.
As accountant Deloitte & Touche recently pointed out, its 500-acre clients averaged only £2500 profit last year, including all subsidy payments. Without those subsidies they would have made huge losses. The bigger the farm the bigger the loss and the current year seems set to get worse.
Further, the concept that, having displaced small farmers, big acreage operators will willingly farm at a loss is nonsense. It may be true that some small farmers are more interested in a country lifestyle than they are in making big profits. But the expansionists got where they are by being sharp businessmen. If farming profits fail to recover they wont hang around producing food at a loss. Theyll sell up and move into another industry where profits can be made.
Britain would quickly find itself in a position where farming became an even more marginal industry and land would become difficult to sell or let. Eventually, and given the scale of the current crisis it could happen sooner rather than later, land would be abandoned and revert to scrub. The countryside would change radically. Hedgerows would remain untrimmed and grow across country lanes. As set-aside has shown, nature abhors a vacuum and many more arable fields than at present would grow thistles instead of wheat. Grass would not be grazed nor cut for hay or silage and great chunks of the British landscape would be unmanaged and unattractive.
At the same time food production would decline, from the 60% of all that consumed by 60m people at present to perhaps 50%, perhaps 30%, perhaps less. The difference would have to be imported and while there are some who would be happy to rely on even more imported food, in spite of the health risks and inferior methods by which it may have been produced, the effects on the UK trade balance would be severe. For as the population of the world increases, imported food will not stay cheap and Britain already faces a serious balance of payments crisis not least because of increases in food imports. That in turn could threaten government expenditure previously intended for health and education and/or mean increases in taxation.
I realise, of course, that such matters are the Treasurys business, not DEFRAs. I also accept that neither farming nor agriculture is named in the title of the department. But environment is mentioned and so is food. And as I hope I may have begun to persuade any of its employees who might read this, both depend on a managed and viable farming industry. Furthermore, without that the many and varied rural affairs referred to, which seem to take up most of DEFRAs time and attention, will founder.
DAVID RICHARDSON