Wednesday, August 08, 2018

Are the NFU crying wolf?

Britain would run out of food on this day next year if it had to be self-sufficient after a no deal Brexit claims the National Farmers Union: Run out of food

This is a bit misleading as, although a no deal Brexit would disrupt food supplies, it would not mean a complete absence of imports. Ireland, for example, would be keen to continue to sell its produce to us.

It is true that self-sufficiency has declined, but I find the idea of a self-sufficiency target a bit Stalinist. If we were reliant on just one or two countries for our food, there would be cause for concern, but there are many countries keen to sell to us.

I think that a no deal Brexit would be damaging for all sorts of reason, but we need to be careful about the arguments we use against it.

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Tuesday, July 24, 2018

Farm expansion may no longer work after Brexit

Leaving the EU will bring a more challenging and more commercial environment in which farmers will have to watch net margin rather than gross cash flow, according to Jeremy Moody, secretary and adviser to the Central Association of Agricultural Valuers.

The commercial realities of farming will focus rental values more on the productive capacity of land. Decisions about land occupation will include a consideration of fulfilling new requirements under a domestic farm policy including environmental public good.

In the past businesses have tended to become larger as they seek economies of scale, but this may not be the pattern in the future. Some will find under the new regime that land they have taken on to expand will no longer perform financially.

Scale will probably still be a goal for commodity producers but with a sharper business focus.

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Farmers want to remain

It is a deeply embedded myth that farmers voted in favour of Brexit. In fact there is no evidence base in favour of that view other than a Farmers Weekly poll in which respondents were self-selected rather than based on a sample.

However, for what it is worth, Farmers Weekly has done a new poll on how farmers would vote in a three way referendum. 64 per cent selected remain, 28 per cent backed the Chequers deal and just six per cent wanted to leave without a trade deal.

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Food security after Brexit

The Food Research Collaboration has published a report authored by Professor Tim Lang and three other leading analysts on food security after Brexit: Feeding Britain

Three main issues are considered:

  • The question of whether the Government is paying enough attention to agri-food in the negotiating process, given its central role in both public well-being and the national economy.
  • The threat a careless Brexit poses to the UK’s short-term food security – and any long-term attempt to develop a genuinely sustainable food strategy for the whole of the UK.
  • The risk generated to the UK’s status as a potential trading partner of the EU by the Food Standards Agency’s decision to press ahead with major reform of UK food safety regulation, at a time when regulatory stability and clarity have never been more important.

The report notes, 'Like all systems operating to finely tuned specifications, the UK food system is fragile and vulnerable to disruption. Contracts for food supplies are typically set 12 months ahead. UK food comes via a complex logistics system run on a just-in-time basis, i.e. three to five days’ supply. There are only tiny food stocks, commercial or public, held in the UK’s food distribution chain.'

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Wednesday, July 18, 2018

Agriculture in Wales after Brexit

The Commons Select Committee on Welsh Affairs has produced a report on Welsh agriculture after Brexit: Report

The report emphasises the contribution of agriculture to community life in Wales and the health of the Welsh language.

The report notes, 'UK-wide common frameworks could be established in a number of different ways, but it is still not clear where they will apply, what they will look like, how they will work, or how any disputes would be resolved. It is imperative that these frameworks are agreed mutually between the UK and devolved governments and ensure the unique issues that face each of the administrations are given due consideration. We believe that these frameworks will need to be supported by robust and transparent intergovernmental mechanisms.'

The Welsh Government's own proposals for phasing out the basic payment had not been well received by farmers. There is a case for retaining some form of basic payment in less favoured areas to support remote hill farms.

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Monday, July 16, 2018

How changing food cultures challenge agriculture

One of our leading rural studies experts, Professor Michael Winter looks at the challenges and opportunities agriculture faces from changing food cultures: Food cultures

His report considers how changing food cultures and the need for a healthier human diet might impact on agriculture in the UK. He says, 'I look at what people are eating, where and how, and I consider some of the key trends in food consumption behaviour, that clearly feed back into what UK farmers produce and where and how their products are marketed.'

The chapter on agriculture looks at the ‘fitness’ of the industry to adapt to change and examines some of the market and science-derived opportunities for farmers to diversify the food commodities and products they produce including the breeding of improved varieties of cereals and reviving ancient varieties, and increasing the production of fruit and vegetables. Key to the approach required is for Sustainable Intensification, as the way ahead for agriculture in a resource-constrained world, to bring human nutrition more fully into its orbit.

He concludes (and I agree), 'There is a need to develop a food and farming strategy for the delivery of safe, nutritious and affordable food in the UK, which will allow UK farmers to respond with confidence to the concerns and opportunities presented by civil and consumer society. There is a clear policy imperative to support farmers through the transition to post-Brexit agriculture and policy needs to be designed to ensure that a strong, competitive and food health oriented industry emerges. Agricultural policy should be more focused on health and nutrition. Nutritional security should be seen as a "public good".'

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Friday, July 13, 2018

EU needs to offer leadership on global trade

Alan Swinbank looks at Brexit, Trump and the unintended consequences of incomplete agricultural tariff reform: Incomplete CAP reform

He points out, 'Export subsidies are no more. Taxpayer support for Europe’s farmers is largely decoupled, and unthreatened by WTO disciplines. Despite successive reforms of the CAP, bringing down domestic support prices, these excessively high tariffs remain in place, rather like a whale’s carcass left stranded on a beach.'

'If the global trading system is to be saved, the EU needs to lead. Why not counter Trump’s threats and offer to unilaterally reduce farm tariffs?'

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Thursday, July 12, 2018

Will it be all right on the night?

The Future Farmers of Yorkshire event at the Great Yorkshire Show

What follows is the text of my talk to the Future Farmers on Yorkshire on Wednesday 11th July.

For a long time farmers have had to deal with uncertainty about what Brexit will mean for their businesses. The Government has set out a direction of travel for domestic agricultural policy after Brexit in their admittedly somewhat vague Green Paper and this will be made firmer in the forthcoming Agriculture Bill. There hasn’t been much time to digest the 44,000 responses that were made to the consultation, including the detailed response made by the Farmer-Scientist Network of the YAS.

What is clear is that the Government intends to direct future funding towards the provision of public goods and that direct payments will be phased out. Whatever one thinks of Michael Gove, he does have a clear strategic vision, albeit one designed to appeal to urban electorates. If he had replaced David Davies as Brexit secretary, we would have had a further period of instability at Defra.

Unfortunately, Defra lost a lot of its experienced staff and although it has recently made new hirings, they are generally relatively junior and inexperienced in agricultural matters.

What we do not know is the shape of the final settlement between the UK and the EU which could have profound implications for farms. The Chequers compromise seemed to provide a basis for moving forward, but now looks shaky as arguments continue within the Conservative Party, although I think it would command a Parliamentary majority.

Broadly speaking, one may suggest three scenarios:

  • 1. A failure to reach any agreement which would lead to trade being conducted on WTO terms. This would be highly disruptive. Last week, the British Retail Consortium warned, ‘'[The] supply chain is fragile. Failure to reach a Brexit deal – the cliff edge scenario – will mean new border controls and multiple "non-tariff barriers" through regulatory checks, creating delays, waste and failed deliveries. This could lead to dramatic consequences, with food rotting at ports, reducing choice and quality for UK consumers.’
  • 2. ‘It will be all right on the night’. Both the UK and the EU have an incentive to reach an agreement, although the incentive is stronger for the UK with its 64 million population than the EU with 500 million. There would be some kind of initial compromise and then the real negotiations would take place during the transition or implementation period which could be extended.
  • 3. A comprehensive agreement. Whatever happens Britain is not going to have access to the single market on the same terms as at present. One cannot leave a club and continue to receive its benefits. The EU is resistant to the UK to having its cake and eating it. Apart from anything else, it does not want to encourage other member states to think that they might secure the benefits of the EU without staying as members.

It seems to me that a comprehensive agreement will not be achievable given the political constraints in the UK and the EU. Even getting some sort of interim arrangement is not going to be easy. Time is running out and the UK Government has spent a lot of time negotiating with itself. Too often the result of these negotiations is a position that is not acceptable in Brussels. For its part the EU has been distracted by a number of other problems, most notably the migration crisis.

No one has really come up with a feasible solution to the problem of Ireland which has a successful integrated agri-food economy. The technological means of tracking the movement of goods do not exist and would take a long time to put in place and made to work properly. However, some sort of temporary arrangement might be possible. The declared intention to have a common rule book with the EU for agri-foods is a step in the right direction. It may be possible to buy time on this issue through a fudge, but Ireland will not be easily satisfied.

Some of the biggest challenges for farmers arise from future trading relationships, both with the EU and the rest of the world. Under the worst case scenario, sheepmeat producers would face substantial tariffs at the EU border. These would effectively deny them competitive access to the EU market which accounts for around 40 per cent of UK production. This would be devastating for sheep farmers. However, I remain reasonably confident that we can avoid this worst case scenario and that sheepmeat exports will continue much as they do at the moment.

What is perhaps of greater concern is the trade treaties that the UK intends to subsequently negotiate with third countries such as the United States. It should be noted that the intention to align with EU rules on agriculture and food after Brexit will make securing a trade deal with the US much more difficult, given the US interest in having access for chlorine rinsed chicken and hormone treated beef which are banned under EU rules. Nevertheless, my concern would be that agriculture would not be high up the list of government priorities and would be used as a bargaining chip to obtain concessions on manufactured goods or services. For example, Australia would like greater access for sheepmeat to UK markets.

However, I do think that these treaties will take some time to secure and probably will not be possible until after the implementation period. This will at least give farmers a breathing space. The risk in the longer run is that cheap food imports will arrive in the UK market, having not been produced in accordance with the exacting animal welfare standards required in the UK. Price is a big driver for consumers.

It should also be noted that farmers in France, Germany and elsewhere in Europe will continue to receive direct payments, albeit at a somewhat reduced rate because of the loss of UK funds. British farmers will not be competing on a level playing field. The total sum made available to farmers in support payments will surely be reduced. Public goods payments may be more complicated to access and will certainly be distributed in a different way.

Hopefully, post Brexit, there will be more opportunities for a decentralised agricultural policy for England, not just for the devolved administrations. Yorkshire needs more opportunities to develop its distinctive agri-food offer of which we can see many splendid examples round the showground today.

How can farm businesses succeed post Brexit? Each farm business is different and faces its own challenges and potential. What is certainly worth doing at the very least is a SWOT analysis in terms of strengths, weaknesses, opportunities and threats. Some types of activity may no longer be viable and new opportunities may open up. For some farms, the efficient production of commodities securing economies of scale may be the best way forward. For others, there may be opportunities for niche forms of production which add value and involve direct relationships with consumers.

These different approaches require different management skills. Above all, there has to be an openness to new ways of doing business which is an area in which Future Farmers have much to contribute.

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Wednesday, July 11, 2018

Robots ahoy!

Harrogate: We don't value the soil to the extent that we should argued Clive Blacker of Precision Decisons Ltd. at a seminar om Precision Farming and the Hands Free Hectare at the Great Yorkshire Show, The trend towards even bigger machines was driven by a number of factors and they caused soil compaction.

He envisaged a future with swarms of small robots and their tractor outside looked dinky and not a threat to anyone. Fortunatey, the tractor is now driving in straighter lines than last year.

How soon commercialisation could occur was uncertain with cost a key factor. However, there could be contracted weed removal services.

Shortage of skilled labour was a constraint, but Brexit would get rid of people who weren't interested in learning or training, The project was intended to appeal to the younger generation.

Insurance was an issue. Who was to blame if the owner changed the programme and the machine crashed? Or supposing it was hacked into and went walkabout?

It needs to be remembered that new technology has to be socially acceptable. Someone was telling me about a robot that would trundle round the countryside zapping weeds with a laser and no doubt announcing 'This vehicle is exterminating'. Would you like to meet that walking your dog?

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'Policy is coming home'

Harrogate: That was the message from NFU Deputy President Guy Smith at the Future Farmers of Yorkshire meeting on how to succeed post-Brexit at the Great Yorkshire Show today. Policy was going to be made back in the UK for the first time in 40 years.

Government had to help farmers to harness new technology and boost productivity. Farming was essentially a risky business. One was never sure of the value added going forward. That was why governments helped farmers across the world.

In discussion it was noted that people's relationship with food was changing. Nutrition had to be embedded as a value in food.

It was possible to under estimate the resilience or extent of innovation in the sector.

I will post the text of my talk later in the week.

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