No longer a single farming voice

Some interesting reflections by the president of the UK Agricultural Economics Society on recent farmer protests in Europe: 'The response to the grievances has been a mix of grant concessions and delayed policy decisions, reinforcing the argument that the farm lobby has a political importance which vastly outweighs its significance in terms of standard economic indicators.'

'Within the UK, I have found the diversity of reactions to the demonstrations from within the farming community interesting. Increasingly there no longer seems to be a single farming voice. Instead, just as the priorities that the sector is asked to address have widened so too has the range of interest groups with debate intensifying. For example, behind the headlines, positions of the more traditional farm lobby groups have been challenged on social media platforms by farmer-led groups concerned with soil health, food sovereignty, and diversity in the farming community, and through debates on the relative importance of food and environment in agricultural policy and practice.'

'The Oxford Real Farming Conference from 2010 was perhaps an early indication of this trend and the growing success of the Groundswell Agriculture Festival focus on regenerative farming systems. Agricultural economists have long recognised different motivations and styles of farming (see Hill, B. and Bradley, D., Journal of Agricultural Economics, 2024. Goals and values of farmers revisited: Gasson fifty years on). It seems more important than ever that we understand and recognise changes occurring in agriculture’s political economy if we are to fully support the transitions required in the sector to address climate and biodiversity crises.'

The collapse of the green wall

My article is now available on the Political Quarterly website.

The Conservative Party has usually done well in rural areas, but its ‘green wall’ is now under threat from Labour more than the Liberal Democrats. Farmers did not support Brexit any more than the general population, and in income terms they are currently doing well, but fear for the future. In addition, food security issues are more complex than they are portrayed, as are the relations with the devolved governments. In Scotland, the government there is much more popular among Scottish farmers whilst the government in Wales is doing much worse among farming communities.

Why some dairy farms do better than others

Britain has a long-running productivity problem and that includes agriculture.   What is also the case both generally and in agriculture is that there is considerable variability in performance, something confirmed for the dairy sector by farm business consultant Andersons: https://ahdb.org.uk/knowledge-library/characteristics-of-top-performing-farms-2024

The top 25 per cent of dairy farms typically make about £120,000 more a year profit than the bottom 50 per cent.  The top farms obtained an average milk price 1.7p a litre higher than bottom producers.

Top farms were more successful because of factors such as relentless cost control, efficient stocking rates, knowing what the market requires and producing it, and keeping a close eye on detail.

Quarter of farmers say they will not vote

Almost one in four farmers say they will not vote at the next general election according to a Farmers Weekly survey. (N stated as 600+).

42 per cent would vote Conservative, down from 39 per cent last year with 10 per cent voting Liberal Democrat and 7 per cent Labour.  'Others' account for 20 per cent.   This is a disappointing figure for the Liberal Democrats given their hopes of making progress in rural seats.

Support for the Conservatives was strongest in south-east England (49 per cent) and Yorkshire (47 per cent).  Support was stronger among larger farmers with 51 per cent of those farming more than 500 hectares saying they would vote Conservative.

21 per cent in Scotland and 29 per cent in Wales would vote Conservative.   In Scotland Labour was the most popular party with the Scottish Nationalists in third place with nine per cent.

The NFU have just demanded that the farm budget be expanded from £2.4bn to £4bn, something that either leading party is unlikely to be able to afford given the fiscal outlook.

Farm chief slams post-Brexit subsidy regime

The post-Brexit farming subsidy scheme in England has failed to improve on the old EU system and large landowners are still benefiting disproportionately, according to the president of the National Farmers Union. In an interview with the Financial Times, Minette Batters, who is due to step down as president of the NFU in February, slammed post-Brexit agricultural policy, which has been overseen by seven different environment secretaries since the UK voted to leave the EU in 2016. 

One of the biggest criticisms of the EU subsidy scheme run as part of the Common Agricultural Policy was that it unfairly benefited large landowners. Brexit was seen as an opportunity for the payment system to be overhauled. But the replacements in England, the Environmental Land Management schemes (ELMs), have been slow to be implemented and criticised for placing too much emphasis on the environment at the expense of food production. “The focus at the moment is on growing a crop for the environment and not producing food . . . I think that’s going to be really hard with the cost of living crisis,” said Batters, adding that consumers cared more than ever about food security.   [Not sure about the evidence for that claim].

She went on to criticise the government for failing to build a more equitable system. “Large landowners effectively living off the state is not going to wash going forward,” said Batters.  While the new scheme differs from the EU system in that funding is awarded in exchange for environmental actions — “public money for public goods” — the system is still area based. Access to land is a pre-requisite to access the scheme and the more land a farmer has the more funds they will be able to secure. 

The phaseout of the EU Basic Payment Scheme has left many farmers who were reliant on the subsidies with lower payments than they had previously. Meanwhile, take up of the flagship payment under ELMs — the Sustainable Farming Incentive — has been low, with only a fraction of the 82,000 farmers who are eligible having signed up.

UK was a voice for animal welfare in the EU

The UK was one of the strongest advocates of animal welfare measures and its voice is no longer heard in the EU, changing the political calculus.

The EU is considering scrapping plans to impose regulations designed to improve animal welfare in the farming industry over concerns about the impact it could have on food inflation, according to senior officials.

The European Commission had promised to act after public pressure to stop practices such as the use of cages for livestock, the killing of day-old chicks, and the sale and production of fur. But concerns that the proposed changes could add to food costs, which rose sharply after Russia invaded Ukraine last year, have led Brussels to reconsider the plans.

Three EU officials with knowledge of the matter told the Financial Times that the Commission had dropped the proposals completely — along with a sustainable food law designed to boost green food production across the bloc. But another official said it was reviewing the animal welfare plan and would propose a scaled-back version.   This sounds like a trial balloon to judge reactions.

“Some in the commission are worried about the cost,” said Joe Moran, director of European policy for Four Paws, an animal welfare campaign group. The legislation is among the few remaining parts of the EU’s Green Deal climate package, laid out in 2019 to pivot the bloc to a more sustainable economy. But ahead of EU-wide elections in 2024, conservative politicians have pushed back against the environmental regulations.

Typically, the reaction of farm organisations is to call for more subsidies.  Pekka Pesonen, secretary-general of Copa-Cogeca, the EU farmer’s group, told the FT it could support many of the changes as long as they received financial aid to implement them, and if imported meat was subject to the same standards. That would in effect ban many imports from trading partners such as Brazil, Ukraine and Thailand. Such a measure would also be opposed by trade commissioner Valdis Dombrovskis.

Farmers find life without subsidies difficult

Farmers, particularly those in England, are find it difficult to adjust to life with reducing subsidies.  

A Farmers Weekly of 500 farmers survey showed farmers across the UK continue to rely heavily on support scheme money, with almost 90% receiving some funding.

On average, BPS revenue accounted for 29.3% of farm incomes in the 12 months up to spring 2023, only slightly down on the 31.7% recorded for the same period a year earlier.   For more than two in five (41%), BPS money made up one-quarter of incomes.  But for 16%, BPS funding still accounted for three-quarters or more of total revenue, a slight increase on the figure for spring 2022 when it stood at 14%.  

Dwindling support levels continue to cause widespread concern.  A growing number of farmers (49% – up from 45% last year) are now “very concerned” about how they will replace lost revenue from support.

Overall, eight out of 10 farmers registered some level of concern.  Concerns ran so deeply that 87.5% said they were uncertain whether their farms would even survive without BPS support.  More than half (55%) forecast it would be difficult to survive and one-quarter went further, saying survival would only be secured with great difficulty.

More than one-third (37%) are looking to an off-farm revenue to bolster incomes.  Almost two-thirds already have a source of off-farm income, with 22% in outside employment while 19% own another business and 15% hold investments unrelated to agriculture.