Next CAP reform will see big fall in farm numbers

10 October 1997

Next CAP reform will see big fall in farm numbers

By Allan Wright

ARABLE farming in Britain will be in the hands of only about 12,000 key decision makers by 2005, according to Willie Fergusson, Scottish general manager of Dalgety.

"In 1992 there were up to 25,000 key people. That is now down to between 18,000 and 22,000 and we expect a small drop up to the turn of the century. The slow rate of decline is due to arable aid payments coupled with higher market prices than expected in the past couple of years.

"But the next round of trade talks and further reform of the CAP will herald a watershed and a big drop in the number of farm businesses," said Mr Fergusson during Dalgetys annual Scottish harvest review.

"A rapid swing to large, sophisticated, technical units is inevitable. The present economics of grain and cropping will not improve and only the top 30% of growers will remain profitable. These growers will be managing 80% of available land resources.

"Many of the rest will take financial retirement, having made money in times of set-aside, high levels of support and high market prices.

"Some will not want to take the risk of what the next Budget might hold and will take advantage of current tax opportunities and high land prices," he predicted.

The remaining large units would be highly sophisticated, part of the new age of technology. Mr Fergusson was confident that the technology would embrace genetic engineering.

"It offers a real opportunity to reduce costs through disease resistance and improve returns from higher yields.

"On the wider front, GMOs could give the world a real opportunity to eliminate hunger," he said.

But he claimed that even the most efficient growers of the future would need outside help when it came to marketing. He pointed out that currency fluctuations could only be harnessed if there was no delay in noting changes.

"A move of one pfennig against the £ is worth 30p/t on cereal prices and a move of two pfennigs in 10 minutes has not been uncommon this past year," he said.

lKeith Golesworthy, Dalgety senior grain trader, said limited farmer selling was holding up prices. But the lack of exports pointed to a vulnerable market in the new year and he urged farmers to sell forward on minimum price contracts.

His only ray of hope was anticipated exports of feed barley to Saudi Arabia. Everything else pointed to downward price pressure, he said. &#42

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