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.

Pressure for green farm subsidies is mounting

Pressure for a greening of domestic farm subsidies after Brexit is mounting. Indeed, one might say that it is becoming the new conventional wisdom.

Such pillars of the agricultural establishment as former Defra ministers Caroline Spellman and Richard Benyon, along with agriculture select committee chair and former MEP Neil Parish, are among 36 MPs who have written to Theresa May urging her to shift farm subsidies towards protecting the environment. It may be that they think that this is the best way of maximising continuing payments for farmers.

The influential RSPB is expected to launch its 2016 State of Nature report this week, claiming that intensive farming methods are putting more than 120 species of wildlife at risk.

The NFU is seeking to put food security, which it sees as its strongest subsidy card, back at the heart of the debate. They claim that the food and farming industry is worth £108bn a year, but that includes second stage food processing which is not reliant on domestic ingredients and necessarily has to import ones like cocoa.

Tim Lang from City University admits that farmers are being squeezed by a vicious cycle of increasing costs and lower returns. He says that what we need is less farming and more horticulture.

However, the sector is being hit by a double whammy of the National Living Wage and difficulties in recruiting labour after Brexit. Wages are a particular problem in Scotland where the National Living Wage is not age banded so that you cannot pay less to under 25s. Foreign workers are concerned about Brexit and a large UK supplier of foreign workers to UK agriculture has seen applicants to its Bulgarian office drop by 70 per cent compared with a usual 25 per cent at this time of year.

National Trust pitches into farm subsidies

Britain's largest membership organisation, the National Trust, has demanded a complete reform of farm subsidies after Brexit. The idea is that the basic payment would be scrapped and farmers would just be paid for ecosystem services or public goods: Reform call

I heard Dame Helen Ghosh, the director of the National Trust and one time permanent secretary at Defra, interviewed on Radio 5 this morning and she did say that subsidies would have to be phased out over a five or six year period. I would favour seven years and the use of a bond scheme I outlined in an earlier post.

She argued that farmers deserved a better return from the market. No doubt they do, but would the market respond, given retailer power and the limitations of the supermarket ombudsman? Governments in practice welcome oligopolistic price competition between retailers because it holds down food prices for families who are already struggling with tight budgets.

Her views are certainly not without merit and will receive wide support from those who want to see an agricultural policy that places greater emphasis on sustainability. Farmers who voted for Brexit may now start to realise what they have unleashed.

The NFU has responded saying that farmers take their role as custodians of the countryside seriously, but we need to recognise how vital food production is: NFU response

NFU looks to the future

The National Farmers Union has sought assurances that existing EU schemes for British farmers can remain open until 2020: Reassurance sought

However, they also think there will be an opportunity to build a new domestic agricultural policy that is more adapted to national needs. Plant protection regulations are clearly one area of concern.

Along with NFU president Meurig Raymond, I will be addressing a breakfast meeting on the consequences of Brexit organised by the Future Farmers of Yorkshire at the Great Yorkshire Show on 13 July.

Crop diversification measures have limited impact on farm income

The controversial crop diversification measures introduced in the last CAP reform have had a limited impact on farm income according to a new study: Crop diversification

However, individual farms may have been more substantially affected with some experiencing an income loss of as much as 10 per cent. However, it should be noted that only 38 per cent are farms are affected by the measure.

The NFU has complained about it a great deal in the UK and these figures question whether the measures are having much impact on their members. However, it may be that what was resented was what seen as an unnecessary intervention in farm level decision-making rather than any financial impacts.

Campaigning for farming and food in the general election

The general election is an opportunity for farming and food issues to be debated and the National Farmers' Union is fully entitled to brief its members with questions to be asked of candidates. Indeed, the NFU has posed very interesting questions about any referendum on membership of the EU and what the implications of 'Brexit' might be for British agriculture, an issue that requires more systematic attention and exploration.

What I think is less helpful is any suggestion that we need self-sufficiency targets which can all too easily smack of Soviet central planning. The NFU has warned that by 2080 less than half the nation's food needs will be met by UK farming. This date is a long way away and it is not clear whether this is a figure for temperate foodstuffs or whether it includes tropical products like the ever popular banana.

The NFU's report entitled Backing British Farming in a Volatile World said that 85 per cent of consumers wanted to see supermarkets selling food from British farms. This is a bit like asking people whether they are in favour of motherhood and apple pie.

There are food security issues to be discussed, but as Tim Benton of Leeds University, the UK's global food security champion, commented: 'It remains an "open question" as to what the optimal level of self-sufficiency should be.' I would argue that there is no methodology that can tell us, given all the uncertainties. That may, of course, represent a case for being cautious, but I don't think that target figures are the right way forward.

The NFU claims that more than half the income of an 'average' farm comes from single farm payments (soon to be the basic payment). This suggests an over dependence on subsidy, but the NFU says they are needed to protect against price volatility. What would perhaps help more is a supermarkets ombudsman with more powers and a staff of more than three to ensure more of a level playing field. But then governments like low food prices.

You can read the NFU report here: Backing British Farming

Green peas lead to row

New CAP rules require that large arable farmers ensure that five per cent of their land is set aside as an ecological focus area (EFA). The Government has caused controversy by deciding that one of the five options available to farmers to meet the crops will be planting nitrogen fixing crops such as field beans and peas.

Environmental groups argued that this would bring no wildlife benefits, while the RSPB branded the policy 'a wasted opportunity for the environment'. However, Defra minister Owen Paterson defended it in terms of the imperative of food security. For the NFU Meurig Raymond said that it represented 'a pragmatic solution to a very difficult situation.' In other words, smart lobbying by the NFU.

Farmers go for pre-nups as land prices soar

The rise in the price of farmland is leading increasing numbers of farmers to sign pre- and post-nuptial agreements to protect their wealth from enlarged divorce payments to their spouses. A roll in the hay can clearly have consequences not envisaged in the past.

Farmers who have not completed such an agreement face the unwelcome prospect of selling farmland or borrowing money to finance a divorce settlement. Farming divorces are complicated by the fact that the farm is usually the marital home, meaning its value is taken into account when deciding financial settlements for ex-wives.

Selling off part of the farm is not really a solution. 25 years ago a farm might have been viable between 500 and 700 acres, but today something like 1,200 acres is needed to sustain a profitable business, even with CAP subsidies (which are related to the farmable area anyway). If the farm is reduced in size, it may no longer be able to support heirs, particularly if more than one wants to be involved in the farm business.

According to the National Farmers Union it has had more calls from members on this topic since the 2010 ruling involving German heiress Katrin Radmacher which stated that courts can take pre-nups into account when deciding settlements. It has handled 40 referrals from members seeking advice on divorce and pre-nups over the last three years.

This gives a new meaning to the term selective benefit in the pressure group literature. Anyone can get advice on a divorce from a family lawyer, but they may not encounter that many cases involving farms and be relatively unfamiliar with the special considerations involved. That is where an organisation like the NFU can help, showing the relevance of Olson's by-product theory of selective incentives which seeks to explain how lobbying activity can be sustained in the face of the free rider problem