The future is bright, the future is farming
When the Common Agricultural Policy was developed back in the 1960s, it was introduced to increase domestic food supply to ensure both food security and reduce the reliance on imports to ensure post war shortages would be a thing of the past.
The CAP was very successful but over the past 5 decades there has been a significant shift in direction. The Agenda 2000 reforms (and introduction of the Single Farm Payment) focussed far more on environmental protection and rural development than food production.
With widespread recent press articles on food security and the ‘60 day supply’ discussed at the NFU Centenary Conference debate, are we going full circle to at least part of the demands of the Treaty of Rome?
Grants and support payments are a key issue in modern agricultural systems- the annual Farm Profits Survey for the farming year 2006-2007 by the Institute of Chartered Accountants’ Farming & Rural Business Group has revealed that subsidy incomes represent 97% of farming profit. An average of £45,000 is paid into the farm account creating a profit of £46,300.
It should be noted that since the information for that survey was compiled, grain prices have surged, affecting both arable and livestock farming in equal measures good and bad. Whereas the industry has generally suffered from a period of ever lower prices and seems to have entered into a period of increased prices for the end product, with the parallel surge in costs such as fuel, fertilisers and seed, the actual difference in margin may be called into question.
So what for the future? Surely a well judged decision is needed between the rose tinted outlook for the arable sector, bio fuel demand, and demand from the increasing population (up from 6.2 billion today to 9.5 billion in 2050) against the stark reality that removing the subsidy may well leave a hole in the farm accounts that the increase in grain price may not be able to cover. Looking from a livestock farmer’s point of view, this farming year will have almost certainly seen a loss, especially in the sheep and pig sectors, including the subsidy payments, and therefore removal of the subsidy would certainly call into question the future of the farming operation.
Hilary Benn, speaking at the Farming for the Future conference back in November talked of the wettest summer on record, the catastrophic flooding and the serious animal disease outbreaks, so perhaps it may not be the right year to assess agricultural performance. He reminded us of the £3.9 billion pledged to the next Rural Development Programme in England; the major part which will be devoted to agri-environment schemes under Environmental Stewardship. Perhaps this is how he wants the industry to ‘embrace its environmental responsibilities’ and be ‘valued and rewarded by society’. Quite how he wants the industry to ‘earn its way… in other words be profitable and competitive domestically and internationally’ might suggest that the days of support under Axis 1 of the Single Farm Payment are numbered.
Government Chief Scientist John Beddington conceded that since 2005, world agricultural production had started to lag behind population growth, and Professor Robert Thompson of the University of Illinois (speaking at the Sentry Conference 2008) talked of the need for GM technology to triple world agricultural output by 2050. But despite this, has the Government noticed, or are they too pre-occupied with rural diversification and opening up the countryside for public access to environmentalists? Certainly a question that many struggling livestock farmers, losing money on every beast that is sold may be fairly keen on voicing. Sir Don Curry spoke of how a single support package is needed post 2013 to ensure that farmers don’t suffer from the freeing up of global trade, to ensure that management of the countryside is not a park-keeping argument and that it should be done in parallel with food and energy production. Quite where the line will be drawn will certainly be fundamental in the future of the UK agriculture sector.
Surely it would be every farmer’s desire to be a profitable entity without the reliance on subsidies and the headaches that surround them. I mentioned earlier how Mr Benn told us his vision of getting the industry to “earn its way, and be competitive domestically and internationally”- I’m sure livestock farmers, at least, hope that day is not far away.
Author, Richard Broome
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