DAVID RICHARDSON
DAVID RICHARDSON
It would be good to be
able to produce food
without subsidies, but,
with the global
economy as it is, their
abolition is just not
realistic
I wish we could survive without subsidies, I really do. Ridding ourselves of constant, distorted accusations of costing every household £16 a week, or whatever other figure tabloid journalists or DEFRA spin doctors pluck out of the air from time to time, would almost make it worthwhile.
We have heard the accusations again recently in association with the CAP mid-term review. But in a global economy that allows America to increase its aid to farmers by almost 70% and encourages retailers to import cheaply produced food from around the world, the abolition of subsidies is not realistic.
Time was when I believed it might be possible to control those imports, for government agencies to assess how food commodities seeking entry into our market were produced and if they did not comply, or at least compare, with the welfare, environmental and ethical conditions applied to home produced goods, to send them back. Needless to say, I am disillusioned. Britain does not even have the energy or the nous to install an effective system for keeping out illegal imports of meat, some of which are almost certainly carrying infectious diseases, let alone to control so-called legal imports. They may be legal, but they are not moral.
The other thing about subsidies the media has never accepted is that while they may be paid to farmers, they actually help boost retail profits. Fifty years ago there was a general acceptance that farm subsidies were to hold down the price of food for consumers. Then in the late 50s an MP called Stanley Evans accused farmers of being "feather bedded" by subsidies and the jibe, as untrue then as it is today, has stuck.
Now, by employing ruthless buying practices only available to the most powerful organisations, supermarkets have grabbed that benefit for themselves. If consumers say they do not believe it, refer them to the fact that while farm incomes have fallen, despite constant slashing of production costs, by more than 70% over five years, supermarket profits have increased. The imbalance of profitability between one end of the food chain and the other is unsustainable and a correction, involving some control of supermarket methods, is urgently needed.
But although there are few surprises among the EU proposals (we heard most of the ideas from Sir Don Curry) the most worrying aspect was the welcome given them by the British government, which clearly has no practical realisation as to how far UK farmers are behind the rest of Europe. For when you look beyond the detail, Franz Fischlers big idea is to persuade farmers across Europe to produce less food and more environment. But while the diversion of cash from production in Britain is already ahead of other EU member states its re-allocation to the new priorities is miles behind them.
And while grain prices remain at present levels the combination detailed above could lead to dramatic changes in the domestic supply/demand position. Many farmers have told me, for instance, that they intend to put half their land into set-aside this autumn. They see no future in growing grain at a loss and greater security of income in set-aside payments. Furthermore, from its negative attitude to production, they assume the government will applaud their actions. In other words, the concept of being paid not to grow things is not only with us it is expanding.
What if significant areas of the rest of Europe decide to follow the British lead? The present European surplus could disappear. Instead of surpluses Europe could quickly be in shortage with obvious implications for the balance of payments. Critics of this view will say we have no need to worry because the eastern European countries that are queueing up to join the EU have plenty of food. But they are not members yet and their production standards fall far short of what western Europeans say they want. Are the governments of member states of the EU prepared to take such a risk? Some apparently are, including our own. Others, who have a better understanding of reality, are not and we must hope their wisdom prevails over coming months.
An industrialist suggested to me recently it might help our case to suggest to politicians that farming should be treated like utilities? After all, he argued, farm produce is as, if not more, essential to people every day than water and power. Further, the companies that provide utility services are regulated as to the charges they levy and the profits they make. The only real difference between them and farming is that the government-appointed regulatory authorities are instructed to accept unavoidable costs as legitimate reasons for raising prices for services. In addition utilities are allowed to make sufficient profit to enable them to reinvest in infrastructure and stay in business in the interests of security of supply.
Why should the production of food be treated differently? Regulation is a fact of farming life and given that it is inevitable let it at least be applied in intelligent and positive ways that allow us to make profits and secure supplies. So, why not dump DEFRA and have an OFFOOD instead?