Thursday, March 16, 2017

New agri-business Brexit coalition formed

Eight trade associations or organisations concerned with agri-business have formed a new coalition to advise the Government on the implications of Brexit for farming: Voice of agribusiness

It will be interesting to see how this new grouping relates to the NFU.


Successful diversification

Farmers have diversified in all sorts of ways to provide new streams of income for their farms. For dairy farmers, one option has been to process their milk on the farm to provide high value added products such as yoghurt, speciality cheeses or ice cream.

Troy Town Farm on St. Agnes in the Isles of Scilly is the most westerly farm in Britain. I think they have just nine cows, but they produce high quality ice cream. I can vouch for that as I have walked across St. Agnes to taste it.

This short video gives a brief account of their story: Troy Town Farm

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Monday, March 13, 2017

Four new papers on Brexit and agriculture

The Brexit working party of the Farmer-Scientist Network of the Yorkshire Agriculture Society, which I chair, has produced four new papers on Brexit and agriculture. They can be found here: Brexit papers

I have written papers on the future of Pillar 1 subsidies and migrant labour; Michael Cardwell and Fiona Smith have written on agri-food trade; and Alan Greer has covered devolution aspects.

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Friday, March 10, 2017

More threats than opportunities

The agricultural trade dimension of Brexit posed more threats than opportunities according to NFU Director of Strategy Martin Haworth. He was speaking at a EurActiv seminar on 'After the CAP: what future for British agri-trade?' in London yesterday.

He thought that there was a lot of optimism about how easy it would be to negotiate a free trade area with the EU. How far could one replace EU markets with third country markets? With no frictionless access to the single market, we were looking at second best outcomes, the question was how second best?

Even with tariff free trade, there would be barriers with customs procedures. There was a great potential for disruption with perishable goods. He had a number of campaign medals from the past, but none of these problems had arisen since we had been part of the single market.

He noted that the horticulture sector was very integrated through importing and exporting. (Later, this led to discussion of how it was not in Spain's interests to have salad exports to the UK disrupted).

Our food exports to Belgium were three times those of China, India, Russia and Brazil combined.

Peter Hardwick of the ADHB noted that the advantages of proximity and speed of delivery in EU markets. Logistical issues around rules of origin were far more difficult than tariffs.

Molly Scott Cato MEP noted that it was difficult to justify paying people for owning land. There needed to be a discussion in government about what the future farming model should look like. A Defra staff member confirmed that no green paper was in prospect.

Phil Stocker, chief executive of the National Sheep Association, said we were not having a discussion about how we wanted agriculture to look like in the future. Upland farmers could respond by intensifying.

Lord Teverson said that the future relationship with the CAP was critical. The sequencing of agri-trade deals was important. Supply chains were now important even for SMEs.

Martin Haworth emphasised that a defined transition period was needed for everything.

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Monday, February 27, 2017

Fall in farm land prices

After many years of above inflation increases, the price of agricultural land fell by 7 per cent last year with the average price per acre dropping to £10,223. The Royal Institute of Chartered Surveyors blamed a sense of uncertainty linked to the prospective loss of EU subsidies.

A survey by Knight Frank found that farmland prices had fallen last year at the fastest rate since 1999. Its survey of bare agricultural land (not including homes or farm buildings) found that prices fell by 9 per cent to £7,470 an acre. Nevertheless, a pound invested in agricultural land in 2009 would still be worth twice as much as a pound invested in a house or the FTSE 100 share index.

It is thought that the price of farmland could continue to fall this year because of higher input prices resulting from the fall in the value of the pound. Prices are, however, being propped up by lifestyle farmers who are estimated to account for a quarter of purchases.

A fall in land prices might be seen as a benefit of Brexit, making it easier for new entrants to come into the industry, reducing the average age of farmers and boosting innovation. However, the real consideration here is whether rents for tenants fall significantly as this is the usual entry route other than in cases of succession.

Even then, new entrants face the cost of machinery and, other than or arable farms, livestock. What may be needed is new means of building up a herd such as share farming which is being experimented with, following the Nee Zealand example.

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Friday, February 24, 2017

NFU goes for three pronged approach

The National Farmers Union has gone for a 'three pronged' approach to British agricultural policy after Brexit. If it seems a little short on detail, this is no surprise as different sectors of the industry want different things and even farmers within the same sector.

The first area would be designed to enhance productivity and competitiveness. This could include capital grants to farmers, knowledge transfer, training and advice an tax breaks to encourage investment.

The second area would be directed at environmental measures. As well as traditional agri-environmental schemes this could encompass payments for ecosystem services such as water companies paying farmers to look after watercourses.

The third area would be concerned with volatility. This would be the top priority if the settlement was an unfavourable one for the sector, e.g., on trade. This could include crop insurance (I remain to be convinced), future contracts (surely only for bigger farmers), and income guarantees, as well as direct payments to farmers. Income guarantees might look like deficiency payments as happened pre-1973, but they may not be WTO compatible.

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Tuesday, February 21, 2017

Migrant labour and agriculture

The UK in a Changing Europe programme has published a blog post from me on migrant labour and agriculture in which I call for a new version of the SAWS programme after Brexit: Migrant labour

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Friday, February 10, 2017

No priority at all?

According to a leaked report in The Times today, the Government has divided sectors of the economy into high, medium and low priority for the Brexit negotiations.

As one might expect, pharmaceuticals, motor vehicles, aerospace and air transport get high priority, along with (rather more surprising) textiles and clothing. Fisheries gets into the medium priority list. But in this leaked list, agriculture and food processing don't get mentioned at all.

That is a concern when agriculture could be the sector economically damaged by Brexit through a combination of the loss of subsidies and the removal of tariff protection.