Allan Barber looks at the dire state of British farming and concludes, we don't know how lucky we are

Allan Barber looks at the dire state of British farming and concludes, we don't know how lucky we are

By Allan Barber*

Two contrasting publications have each given a pretty damning picture of the state of farming and food production in pre-Brexit UK; and despite the conclusions of the Ferguson Cardo report into the future of British agriculture, it is hard to see how this situation will change for the better without a huge amount of pain on the way.

But equally it is almost impossible to imagine a continuation of the status quo within the EU, where in 2015 70% of UK farm income came from direct and environmental subsidies.

A much shorter piece in the well-known satirical paper Private Eye captures the problems faced by UK dairy farmers very cogently, although these have been well publicised already. The number of dairy herds has fallen like a stone since 1993 – the year the Milk Marketing Board was abolished - when there were 33,000 herds, compared with fewer than 10,000 today. The cost of milk production this year is forecast to rise to 32.5 pence per litre, while the price farmers receive is anchored at 25p or even worse predicted to fall even lower. Not surprisingly more closures are expected.

The price is now lower than when the MMB was dismantled 24 years ago, since when dairy farmers have been forced to negotiate contracts individually with dairy companies. One result of the decline has been the inevitable closure of fresh milk processing plants instead of upgrading old plants. The latest closure announcement on the outskirts of London affects dairy farmers in Suffolk and Essex where there are only 39 dairy farms, a decline of 80% since 2005.

The obvious question is why anybody would want to remain in dairy farming under these circumstances, explained only by a passion for the way of life and the difficulty of changing to another farming type or getting out.

The picture is not quite as bleak for most alternative farming types, although pigs and grazing are just as bad, while incomes in Scotland and Northern Ireland are considerably worse than in England and Wales.

However across the board Britain has a significant food deficit between what it exports and imports. Total exports of GB Pounds 18 billion of which the EU takes 60% are dwarfed by imports of GBP39 Million, 70% from the EU. Therefore, with or without Brexit, the UK has a major problem working out what to do about its agricultural economy, because it cannot continue to throw money at keeping unsustainable farmers afloat. This becomes even more acute after it finally manages to leave the EU.

The message from Ferguson Cardo is to leverage the growing agritech sector and to get different government departments to coordinate efforts and investment to achieve commercial and societal objectives. A question is whether this will be fast or substantial enough to create a profitable future. It sometimes seems as though New Zealand’s challenges are minor in comparison.


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*Allan Barber is a commentator on agribusiness, especially the meat industry, and lives in the Matakana Wine Country. He is chairman of the Warkworth A&P Show Committee. You can contact him by email at allan@barberstrategic.co.nz or read his blog here ». This article was first published in Farmers Weekly. It is here with permission.

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This is always the way they were headed once the production caps were lifted. Supermarkets over in Europe are dictating the price of milk & milk products. Maybe if they had to source their milk from an open market they may pay more and European farmers may get more for their milk.

The UK is in even more dire straights at this time with very low Rainfall, such that there are worries that there will be very poor Germination of Wheat and Barley, and so very low yields. Importation of Wheat may be required. The Barley Crop --is hugely Important for Scottish Whisky Production -- which is a huge and Mainstay Export. Scotch Whisky accounts for One Quarter of all UK Food and drink Exports. Exports of Whisky to France, were 91 Million Bottles in the first Half of 2016. Source: The Guardian 19th Sept 2016.

"it cannot continue to throw money at keeping unsustainable farmers afloat..."

No one can - but thats what we collectively do through deficits and money printing. Debt puts food on the table for now.... underneath it all we are approaching a point where the cost of production exceeds the affordable price across the board.

You can replace "farmers" here with any number of nouns ... Oil companies / housing ponzis / education systems / renewable energy companies / the USA etc

This is an obvious failure of the free market, nothing more regulation and legislation can't fix.

The dinner menu from the Titanic would be appropriate in these circumstances.
I saw a copy recently and from memory there was only one food item that could not be grown in the British Isles. It would keep some of them busy as well.
You may say what about the immigrants but they have local dishes based on those foods
The booze was french I think.

Well the UK has a debt problem, 1.5 trillion of personal debt, add in government debt unfunded liabilities and it's over 4 trillion.

In the great scheme of things the farm problem is minor and it's the same in other countries in the EU, so the restructuring will take time, but first they have to default on the debt.

https://www.ft.com/content/84892c56-1a17-11e7-bcac-6d03d067f81f

https://www.thesun.co.uk/motors/3458353/fears-of-uk-car-financing-indust...

Please put on your Rose coloured glasses kindly supplied by the Worlds Reserve Banks which will enable you to see the real picture through their virtual reality lens. If Derivatives are a truly zero sum situation those who lose their capital will presumably be happy that someone else now has it and go back to watching The Kardashians as a more realistic representation of the more important things in life.

Well,
Like the banks there will be a program of nationalisation, the debt will be restructured.
The countryside is too important to be turned into a wasteland, a view shared by NZ
But it is a long way ahead.

They could always just charge consumers the same price for milk that we pay in NZ.

The days of anticompetitive behaviours are over, there isnt a national price for milk and nor should there be.
Just clean the mess up at the end.

The CAP will need reform whether the UK leaves or not. This will lead too some dramatic outcomes in Europe, except those territories who protect their Farmers, France especially. The UK Agriculture has seen home supply diminish to the cost of Family farms particularly. It does not make sense for the UK too import over 40% of it's food, except the Political dynamic which has created this situation. British farmers have had unreal regulations imposed, which other EU Nation states have either ignored or not subject too because of their fragile economy. Brexit does present challenges it will also give Farmers, in the UK, a Golden opportunity to regain market.