Tuesday, May 23, 2017

More time for farmers before subsidy phase out

The Conservative manifesto promises to keep farm support at current levels for the lifetime of the next Parliament. This means that farmers will have until 2022 to adjust to a reduction in subsidies, although the downside risk is that the longer time span may lead them to postpone necessary changes, especially when future policy remains uncertain.

According to farm manager George Eustice the intention is to focus on supporting small enterprises and those new to the industry. The introduction of government backed loans could see a revival of a version of the Agricultural Mortgage Corporation set up by Stanley Baldwin's government (it was sold to Lloyds in 1993).

The Government is also considering schemes to help older farmers retire and changes to tenancy legislation to create slightly longer tenancies.

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Wednesday, May 10, 2017

A farmer writes

In an interesting article a Northamptonshire farmer who has a mixed farm writes about how Brexit will affect him and other farmers: The impact of Brexit

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Friday, May 05, 2017

Labour crisis in agriculture

The House of Commons Environment, Food and Rural Affairs Committee was not able to complete its inquiry into labour constraints in agriculture because of the dissolution of Parliament, but has produced a report that highlights some of the key issues: Feeding the nation

The committee does not share the Government's view that the sector does not have a supply problem. It took the view that government statistics are inadequate for measuring agriculture's labour needs, particularly where migrant labour is concerned.

The report says there about 75,000 temporary migrant workers employed in UK agriculture. The NFU says that the sector will need 95,000 seasonal workers by 2021.

Improved living standards in Eastern Europe, the fall of the pound and uncertainty following Brexit have contributed to a labour shortfall in the sector.

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Wednesday, May 03, 2017

Government giving mixed messages to agriculture

With Parliament now dissolved, the House of Lords Energy and Environment Sub-Committee has produced its report on Brexit and agriculture: Brexit report

The report implies that Government has not sorted out its priorities in relation to the sector: 'The Government is currently giving mixed messages to the agricultural sector. Its vision for the UK as a leading free-trade nation with low tariff barriers to the outside world does not sit easily with its declared commitment to high quality and welfare standards in the UK farming sector. Combining and delivering these two objectives will be a considerable challenge.'

The report notes the reliance of the UK agri-food sector on both permanent and seasonal labour from other EU countries. 'This is an immediate challenge which the Government must address urgently.'

The report warns, 'Farmers risk high tariffs and non-tariff barriers on exports, which could render their business uncompetitive, while simultaneously having to adjust to a new UK policy for funding.'

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Tuesday, May 02, 2017

Growing soya becomes more popular

Soya is a subtropical crop largely grown in Brazil, Argentina and the US. The UK imports £1bn worth of soya each year, 95 per cent of which goes to animal feed for chickens, sheep, pigs, cattle and farmed fish. It's also an essential ingredient in a wide range of things from bread to ice cream.

New varieties of soya can cope with the cooler, less sunny climate in England. In the past year there has been a fivefold increase in the area planted in the southern half of England, with about 4,500 acres this year.

The world price for soya has soared as growing demand for meat in China has pushed up the cost of livestock feed. Soya now sells for about £400 a tonne, compared with about £140 for wheat and £330 for oil seed rape.

It also cheaper to grow than traditional crops because it does not suffer much from pests and diseases, a key consideration when plant protection products are becoming less readily available. It fixes nitrogen from the atmosphere in its roots and can help to break up blackgrass, a growing weed problem in cereal fields. This makes soya a valuable break crop in spring rotations to help to kill off diseases, pests and weeds in the ground.


Friday, April 28, 2017

How farmer attitudes affect farm profitability

A fascinating study explores the association between farmers' attributes and profitability.

PhD candidate Niall O'Leary at the University of Reading has found that a large proportion of the variation in farm profitability can be predicted by the attributes of a farm's manager. Two studies of dairy farmers in Great Britain were carried out and almost 40% of the variation in farm profitability could be explained by five variables in one study and by three variables in the other.

The major predictors of farm profitability identified fall under the following five categories.

  • Detail Conscious behaviour - farmers are generally not Detail Conscious but high scorers are much more profitable. A high scorer 'focuses on detail, likes being methodical, organised and systematic'. A low scorer is 'unlikely to become preoccupied with detail, less organised and systematic, dislikes tasks involving detail'.
  • Leadership behaviour described as 'Inspiring and guiding individuals and group. Leading by example and arousing enthusiasm for a shared vision' is strongly associated with profitability.
  • Those who 'lose their cool' when things go wrong and also those who are generally relaxed or laid back are less profitable. A motivated and proactive person who can handle problems is likely to be much more profitable than either a laid back, relaxed person or an overly anxious person prone to frustration.
  • Attitudes and beliefs, in particular how entrepreneurial / profit orientated farmers view themselves are associated positively with profitability.
  • 'Growth Mindset', those who have a fixed view of their own and staffs abilities are much less profitable. Education and training provision are tangible indicators of a Growth Mindset.

The effect of Detail Conscious is significant with 24% of variation in profitability covarying with it. A high scorer 'focuses on detail, likes being methodical, organised and systematic'. A low scorer is 'unlikely to become preoccupied with detail, less organised and systematic, dislikes tasks involving detail'. A one point difference in Detail Conscious on the 1 - 10 scale is associated with 1p per litre or £72 per cow greater profit per year.

Leadership is described as 'Inspiring and guiding individuals and group. Leading by example and arousing enthusiasm for a shared vision.'Relaxed is negatively associated with profitability. A high scorer on the Relaxed measures 'finds it easy to relax, rarely feels tense, generally calm and untroubled' and a low scorer 'tends to feel tense, finds it difficult to relax, can find it hard to unwind after work'.

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Thursday, April 27, 2017

The need for resilience

Participants in the panel on Brexit and agriculture

The Agricultural Economics Society conference in Dublin in the earlier part of this week attracted a number of interesting presentations and a speech by EU agriculture commissioner Phil Hogan.

One point that he made was that any free trade agreement with the UK would have to cover food standards, food quality, food safety, animal welfare and environmental issue. The aquis wold have to be imported into a FTA. The UK could not be used as a backdoor mechanism for inferior goods.

One theme that emerged from the conference was the need for farmers to show 'resilience' in the face of changing conditions and uncertain circumstances. However, that may not be a quality they all have.

One poster presentation by Niall O'Leary investigated the personality traits of farmers. It showed that 'independence' was the most common trait, in the sense of 'I'll do it my way.'

Agricultural economist Alan Swinbank said that high tariffs were a relic of a 1980s CAP when there was a fear that imports would undermine the intervention price. If one lowered tariffs to ten per cent that would still give more protection than enjoyed by other sectors.

There was considerable discussion of ecosystem services, although I was still left uncertain about how this concept could be operationalised. In policy terms it was seen as a means of challenging the 'agriculture first' element in policy. The objective would be to promote the total social value of rural land resources.

It was uncertain whether we had identified all ecosystem services. How could a balance be achieved between marketed and non-marketed services? There was the question of trade offs between different ecosystem services. Local environmental governance organisations (LEGOs) could be a mechanism for coordination at a local level.

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How will Brexit affect British farming?

Share Radio talks to myself and NFU Vice-President Guy Smith: Brexit and farming