Wednesday, February 24, 2016

Farmer debt pile grows

Farmers are building up record debts as they struggle to cope with a sharp drop in the price of wheat, milk and other commodities. Farmers borrowed £17.8bn in 2015, driven by cash flow problems, the NFU revealed at its annual conference in Birmingham.

NFU economist Anand Dosa said that agricultural borrowings had doubled in less than a decade. There had been a double digit rise in borrowings since 2012.

However, Allan Wilkinson, head of food and agriculture at HSBC, said that indebtedness remained 'very small' compared with the value of assets. Land values had remained relatively resilient.

Monday, February 22, 2016

Is the CAP less green?

Environmental NGOs argue that the increased flexibility given to member states by the last round of CAP reform has led many of them to reduce environmental spending, making the CAP less 'green' than it was: Greenwash?

Monday, February 15, 2016

New Brexit report

The latest report on Brexit has been prepared by Professor Allan Buckwell for the Worshipful Company of Farmers: Brexit report

Presenting the report, he highlighted the deep uncertainties that exit from the EU would be likely to create, especially for agriculture which currently relies so heavily on EU support and regulation. He pointed out that the only certainty at present is that a referendum will occur, we can’t even be sure when. And, whilst the outcome of this referendum is currently impossible to predict, the possibility of a vote to leave has now to be given serious consideration.

He also made it clear that even if the earliest possible date for a referendum (sometime in June 2016) were to be adopted, a vote to leave would, in all probability, mean exit would not occur for at least another four years, making exit the end of 2020. Creating an extended period of enormous, and potentially highly damaging, uncertainty for our industry.

The interim period would involve a whole raft of intensely complex, international negotiations, not just between Britain and the EU but with all our trading partners globally, as the UK Government tries to secure trade deals to replace those negotiated within the EU. At the same time there would need to be a national debate to establish the basis for agricultural policies to replace EU regulations and the CAP.

Whilst it is clear that even if the British people were for BREXIT, payments due to UK farmers under the CAP will continue right up to the actual exit date, the nightmare scenario for farmers following exit would be a combination of the rapid removal of CAP direct payments, with much, if not all existing regulation remaining, and with continuing free access to our market for the still-supported EU farmers. At the same time, outside of the EU, UK farming would also be exposed to increased competition from the world’s lowest cost exporters. This outcome is likely to be regarded as equally undesirable by environmental interests.

Once the immediate effects of a vote to leave have worked through the system, the future of the industry would depend critically on the intelligence and constructiveness of the agricultural policy debate that follows. Some might argue that in the long run it could result in British agriculture being in a stronger position with a more resilient industry developing, but this would depend very much on the legislative and policy environment that replaced the CAP and the competitiveness of the industry it encouraged to develop.

Thursday, February 04, 2016

Brexit report out

The report from a working party set up by the Farmer-Scientist Network of the Yorkshire Agriculture Society on Brexit and agriculture is now out: Brexit

The working party was made up of academic specialists from the fields of law, agricultural economics and political science, as well as farmer members.

The report highlights the complexities and uncertainties associated with Brexit, particularly given the absence of any Plan B for agriculture produced by the UK Government.

Among the topics covered are the future of farm subsidies, international trade, the devolved administrations, plant protection, animal health and welfare, GM crops, geographical indications and migrant labour.

Wednesday, February 03, 2016

CAP reform fatigue

EU agriculture commissioner Phil Hogan is open to a mid-term review of CAP reforms next year, but says that there is 'reform fatigue' among decision-makers and stakeholders: Mid-term review