Wednesday, September 27, 2017

Import threat to sheepmeat sector

Australia and New Zealand are pushing the UK to open its food market after Brexit and allow the same quota of low-tariff imports as they send to the whole of the EU. The UK would mirror the tariff rate quota of the whole EU bloc which would mean that larger imports of sheepmeat would be admitted tariff free. It is also likely that Australia would be interested in increasing their exports of cheese to the UK.

This could be devastating for the sheepmeat sector which has always been the most vulnerable to Brexit through a combination of increased imports and tariffs on exports to the EU. Upland farming is highly reliant on sheep.

The Government has produced some warm words, but Defra secretary Michael Gove has talked about 'an outcome that is net positive for UK agriculture.' In other words, some vulnerable sectors could take a hit.

Applying the whole EU TRQ to the UK would avoid the tricky problem of dividing it up while the EU would want to avoid a situation where its trading partners demanded compensation because the UK's departure would make their access quotas less valuable than before. This would particularly apply where an exported product is popular in the UK which is true of sheepmeat. It would also offer lower prices for consumers. Sheep farmers may have a tough fight on their hands.

Monday, September 18, 2017

Can new technology solve labour shortages in farming?

There is considerable interest in the potential of new technology for making farming more productive and less reliant on difficult to obtain labour. I think that the development and application of these technologies should form a key part of a domestic agricultural policy post Brexit, but no one should pretend that they offer a quick, readily available and affordable fix.

Big farms already use semi-autonomous satellite-guided tractors and combines, which can drive in straight lines without overlapping. However, these big machines also tend to compact the soil, affecting its long-term viability and plant growth.

Harper Adams University, using government funding from Innovate UK, have adopted machinery to drill, spray and harvest crops autonomously using open source software, cameras, lasers and sensors. They used drones and scout vehicles to monitor the field and collect data by bringing back soils and crop samples.

The first crop is slightly wobbly where the tractor failed to keep to its line. The first hands free crop is expected to yield only 4.5 tonnes per hectare, compared with 6.8 tonnes using conventional methods.

In the horticulture sector, where labour problems are particularly acute, machines to pick strawberries and apples are being deployed, but they pick at only one third of the rate of a human and miss 15 per cent of the crop. Moreover, the machines can cost something approaching £200,000. Most farmers reckon that their large scale deployment is at least a decade off.

However, it is clear that one narrative that is being put forward (see Matt Ridley in The Times today is that access to cheap labour has held back the introduction of new technology in British farming.

The deputy president of the NFU has told a meeting at the Liberal Democrat conference that future growth in agriculture will be driven by overseas labour. There was no sign of government action on labour and trade issues: Lack of action

Thursday, September 14, 2017

Worker shortages draw media attention

The problems that Brexit has caused for labour intensive sections of agriculture have received considerable treatment in the media. The latest analysis in the Financial Times looks at Barfoots of Botley whose biggest crop is sweetcorn: Worker shortage

Barfoots operate along a strip of the south coast in West Sussex where there are many big horticultural firms. I have visited a number in the Littlehampton area. The area has a particularly favourable climate due to the shelter provided by the Isle of Wight.

Picking sweetcorn is a hard grind. It is repetitive and physical and must be done quickly if the product is to be on the shelf in optimum condition. Workers do 12-hour shifts on a range of tasks from picking to processing.

This year's headcount at Barfoots has been running about 15 per cent short, representing 50 to 60 workers. I would think that the biggest factor is the post-referendum fall in the value of sterling, combined with better opportunities in countries such as Poland. Seasonal workers also say they no longer feel welcome in the UK.

Another Brexit-related concern is, that like many horticultural concerns, Barfoots only produce in the UK from May to September. Production then shifts briefly to Germany, then to Spain and onwards to Morocco and Senegal. Post-Brexit import duties could play havoc with this arrangement.

What are the answers? Some would say pay more, but most workers earn between £8 to £10 an hour and there have been improvements in accommodation. Some growers offer English language lessons.

In the short run Barfoots are going to cut out labour intensive crops such as broad beans which offer small profit margins (although they are a useful part of a rotation).

Many see the answer in new technology, and I will consider this further in a later post, although it is not easily applicable to many labour intensive crops.

Seasonal workers will still be needed for many years to come and post Brexit there needs to be an arrangement for temporary work permits on the lines of the old SAWS scheme. Opinion poll data suggests that nearly two-thirds of voters would be prepared to support such a scheme.

Sunday, September 10, 2017

Post-Brexit fruit picking apprenticeships

This is a dated satirical piece, but it makes some telling points in an amusing way given the Government's reluctance to accept arguments about the need for seasonal farm labour: Newsthump

Friday, September 08, 2017

Geographical indications become a Brexit issue

The basic idea behind geographical indications (GIs) is to prevent a domestic producer giving a name to their own product that gives the impression to consumers that it comes from the protected region covered by the GI, e.g., Parma ham. It is seen as a means of preventing the public from being misled by producers jumping on the bandwagon of a successful GI and also to prevent unfair competition.

The EU has been favourably disposed to GIs because it sees them as a means of encouraging high quality, value added food production in the EU which will increase returns to farmers. This has led to some conflicts with producers elsewhere in the world, e.g., with the United States over Parmesan cheese.

The EU has over 3,300 protected food and drink products which have a specific geographic origin. Sales of protected labels account for some six per cent of the EU's food and drink sector. The products are sold on average at a price more than two times higher than similar non GI products.

In the Brexit report from the Yorkshire Agricultural Society we did consider GIs, but in terms of continuing protection for British products such as Orkney cheddar cheese and Cornish pasties.

However, in one of its latest position papers the EU is demanding that Britain should legislate to recognise products such as Champagne, Parmesan and Beaufort cheese after Brexit. Such protection should be comparable with that provided by Union law: Position paper

Thursday, September 07, 2017

Migration plans would hit farming hard

The plans for migration control after Brexit set out in the draft government paper leaked yesterday would hit farming hard, particularly the field vegetable and horticulture sectors which are labour intensive and rely on seasonal labour from elsewhere in the EU.

Under the Government's plans low-skilled workers wanting to stay more than three months would have to register with the Home Office. The National Farmers Union claimed that the plans would cause 'massive disruption to the entire food chain'.

The Government seems to have disregarded the arguments put forward by farmers, claiming that the shortage of labour can be dealt with by recruiting from the local labour pool and new technology. In practical terms we are near full employment, particularly in areas where fruit and vegetables are grown, and those workers that are available often lack the aptitude to tackle the work on offer. As for a shortage of labour becoming a spur for new technology, there are limitations here, particularly in terms of easily damaged fruit. I will look at this issue in more detail in a subsequent post.

There is some evidence that even Brexit voters are relatively relaxed about seasonal workers coming in for a time limited period. If voters found that fruit and vegetables were more limited in supply and more expensive to buy, they might start to question the wisdom of the Government's approach. The issue could readily easily by dealt with by a new version of the Seasonal Agricultural Workers Scheme, although the fall in the value of sterling continues to make the UK a less attractive destination for seasonal workers.

Tuesday, September 05, 2017

New aide has remain background

Former deputy chief whip and remain supporter Sir John Randall has been appointed as special adviser on the environment to Theresa May. Sir John was formerly the MP for Uxbridge and South Ruislip. In 2015 he stood down in favour of Boris Johnson.

It is expected that he will play a key role in shaping future government policy for agriculture. He is seen as an antidote to the pro-Brexit instincts of Defra secretary of state Michael Gove.

Farmers have been complaining that Gove's energetic interventions are just intended to raise his political profile, but if farming does better as a result, everyone is a winner. However, some farmers consider that he is paying too much attention to conservation and wildlife interests.

Monday, September 04, 2017

Hard Brexit threat to farm exports

Campaigning organisation Open Britain claims that agriculture could suffer if existing trade agreements with the US are lost as the result of a hard Brexit: How trade could be derailed

19 trade agreements could be lost. Exports including beef, lamb and oilseeds could face new trade barriers. It is argued that these agreements will be lost once Britain leaves the EU unless the UK can negotiate new deals with the US, or negotiate to remain within the EU-US agreements, which in my view is not very likely. As far as a trade agreement with the US, the Americans are likely to want concessions on agriculture.

The agreements include food safety and animal welfare standards covering beef and pork as well as concessions on cereals and oilseeds.