19 October 2017
Plough, No Scatter
Farming and Brexit
by J.R. Thomas
As the bells ring out over the empty countryside for Harvest Festival it is time to spare a thought for Britain’s farmers. There was a time when country life centred around that backbone of British rural living, the family farm. Every parish had a handful, possibly more, of farms of all types and sizes, probably mostly tenanted from the local landed estate owner; farming families and those who worked for and supported them were the backbone of many a remote community.
Not any more; the squire may still own the estate but he probably farms most or all of it himself; the tenant farmer is rapidly becoming as rare as the black rhino, and his family have long gone to work in offices in London, or at least on the retail park on the arterial road. If the village is near a major town, most of the houses will be occupied by commuters; if more remote, by weekenders or the retired, most of them complaining about the noise of machinery at weekends, or the smell from the piggery, or ringing the farm wondering what is in the tank of the crop sprayer. The farmer who rolls past on his tractor is probably not even the farmer; he is in reality a salaried contract manager employed by a great farming contractor, Velacourt or the Cooperative.
The number of farms has shrunk from around 500,000 after the Second World War to about 212,000 now; that figure conceals a far greater decline as a significant number of those 212,000 are part-time smallholdings which are not the farmer’s principal or even a significant source of income. They are essentially hobby farms, devoted to a particular collection of livestock or growing vegetables, or, increasingly vines for viticulture (maybe there are benefits from global warming). It is probable that the average size of commercial farm has grown from around 150 acres to over 800 acres, about half tenanted and half owner occupied; that implies that the number of standalone commercial units is perhaps a fifth of what it was in 1950. Farms of over 2,000 acres are far from uncommon now, and often not farmed by the owner but by a contract company. There certainly are traditional tenanted farms still – the National Trust has many and so does the Duchy of Cornwall, Prince Charles’s fiefdom – they are one of the many causes which he champions, and so does the lesser known Duchy of Lancaster (proprietor HM Queen), together with some traditional estates, who just like the rural traditions or don’t need the money. Or who find that farming on a large scale is not such a wonderful money making machine as the accountants assured them it would be and prefer collecting rents to borrowing to spend on massive machines.
Certainly, farming has been feeling the financial pinch for many a year, from the heady days of the 1950’s and 1960’s, when produce prices were high and input costs were low (including rents, effectively fixed by the Attlee government in the late 1940’s) and farmers really could buy large luxury cars. Incomes have diminished to what would be an extraordinary degree for any industrial sector, and the numbers employed on the land have fallen equally dramatically, from, in arable farming, perhaps one employee for every 75 acres to one every 400 acres. The effect of that is that most family farms are exactly that; the only employees are family. The other effect is that farm machinery has grown enormous – as any reader unlucky enough to meet a modern tractor in a narrow lane can attest. And the direction of incomes and profits continues to be down.
Some of this is of course natural weather driven variation and often occurs inversely to the weather – bad harvests will drive the price of some products such as oats and potatoes steeply upwards, even if yields are much lower. Good growing weather caused incomes to fall 26% from 2013 to 2014 due to oversupply issues in arable, for instance – with some recovery the following year. But much decline is longterm – milk farmers have seen incomes decline for over twenty years so that all small dairy farms are now thought to be loss making unless they have a linked direct retail outlet – such as ice-cream making. One of the few beneficial side effects of bad times in milking cows is wonderful times in eating quality artisan ice-cream.
The collapse in farming incomes is what has driven farm sizes relentlessly upward, spreading costs over more and more acres, and accelerated the growth of factory farms, where animals are intensively farmed in sheds, the sight of which, and the smell of which, is increasingly joining wind turbines as a prominent modern countryside feature.
But just when farmers thought things could only get worse, here comes the Agriculture and Horticulture Development Board to reassure them that in fact, things are about to get much worse. The what? The AHDB, as for reasons of economy we will henceforth call it, is a Levy Board, a quango, funded by a compulsory levy on production, which researches matters of concern to farmers and growers. It has been looking at the potential effects of Brexit on farming. Its conclusions are not hugely cheerful, saying that farm incomes are likely to halve on the present predicted outcome of EU exit negotiations (the AHDB seems to have a crystal ball to hand, if a very gloomy one). That is because it expects the post Brexit EU to erect trade barriers to protect continental farming industries, raising the cost of food imports in the UK and increasing barriers to selling British food and food products to EU members. It also expects farm subsidies, some of them disguised as environment grants and the like, to diminish significantly (the British government has made no promises beyond maintaining levels of subsidy into 2020). No matter that that will increase the cost of food within the European Union; it will have the far more important effect in many member countries of protecting the viability of their many small family farms, which represent a much greater proportion of voters than in the UK.
What would be best for British farmers is a free trade agreement with the EU (as the government is hoping to get, but readers will have observed the lack of progress on this front so far). A free trade agreement would actually increase agricultural incomes, the AHBD predicts, perhaps by 10% in 2021. But hang on. This is to be a free trade agreement within the EU, keeping external tariff walls to agricultural dealings with the rest of the world – that 93% of the world’s population that lives outside the European Union. Opening up the UK market to foreign food would not be good. Not be good for farmers, anyway, as food prices in some sectors could drop by a third or more. Mrs May, on her mission to help the squeezed-middles and just-survivors, might think that that actually is an easy win. There are probably not many farmers in her Maidenhead constituency.
But despair not, farmer readers. The AHBD has the answer. After a great deal of modelling of performance and prospects for every major sector within food production, based, as it has to be, on a range of possible outturns from negotiations which have not reached any meaningful point of reference, it has an answer. It suggests that farmers should boost their productivity. There you are then, farmers of Britain. Straight from the computer model. Get on with it. Grow more, faster and bigger and better. Nothing to it. Fatter pigs. Fleecier sheep. Milkier cows. Bigger potatoes. Huskier barley. Why did you not think of that before?
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