The answer no longer lies in the soil

The Covid-19 pandemic has given a big boost to advocates of vertical farming because of the simplicity of its supply chain.  Vertical farming is the practice of growing crops in stacked layers without solar light.   It can be housed in buildings, shipping containers, underground tunnels and even abandoned mine shafts.  Vertical farms use soil-free growing techniques and stack crops in specially designed beds and trays.

The technology

It makes use of LED lighting to provide different wavelengths of light, according to crop and growth stage need.  The sector received a boost from advances in LED lighting.  The lights can be used to change the way plants grow, when they flower, and how they taste.

The LED lights can be positioned between plants and produce hardly any heat radiation.

The benefits

Advocates say that vertical farming offers a means of guaranteeing yields and reducing the industry's environmental impact while improving the supply of safe, healthy and nutritious food.   There is lower water and nutrient use.

Crops can be grown year round with minimal human intervention.   It can be run entirely on robotics.  This is an important consideration when reliable labour is scarce and its cost is rising.

There is a reduced need for transport and a reduction in food waste because crops are of a more uniform quality.  Reduced fertiliser use means reduced greenhouse gas emissions.

Downsides

In a field, the sun comes free.  Vertical farms are energy intensive and have high electricity bills,   However, there are improvements under way in LED lighting.

It also requires a high initial capital investment and the sector has been littered with bankruptcies.

It is only suitable for a limited range of crops.   It makes sense to grow high margin crops.  Examples are leafy greens, baby leaves like pak choi and herbs such as basil.  It is of no use for staple commodities like bulk grains or cereals.

The sector

Worldwide it was worth £1.72bn in 2018 but is predicted to rise to £9.84bn by 2026.   Japan and the United States have been leading the way.

Intelligent Growth Solutions have a demonstration farm near Dundee.  The company raised £7m from three venture capital firms and the Scottish Investment Bank.   They sold their first vertical farm in July to an Aberdeenshire venture backed by a founder of craft brew business BeerDog

Ocado has invested £17m in the sector.  It has a joint venture with US firm 32ha and Priva Holdings in the Netherlands known as Infinite Acres.  It has also taken a 58 per cent stake in Lincolnshire's Jones Food Company.

In London Growing Underground provides microgreens and salad greens beneath the streets of Clapham.

Advocates argue that vertical farming is disruptive in the true sense of the word as it is changing conceptions of what the food system should be like.

Potato growers have had their chips

Once it would have been down to government to help out a sector in trouble.  However, with the UK's €1bn potato growing sector hit hard by extreme weather and Covid-19 it is their largest customer, McCain, that has stepped up to the plate.

It is worth noting that potato production (other than for starch) was always outside the CAP and therefore much more influenced by supply and demand.

The closure of restaurants and fast food outlets left a potato surplus of almost 200,000 tonnes in March, putting a downward pressure on prices.  Prior to lockdown prices of £200 to £300 a tonne could be achieved, but they then slipped back to £100 to £150 a tonne.

The hardest hit growers have been those who sell on the spot market, such as those selling for 'fresh chipping' at food outlets.

McCain buys 15 per cent of the UK potato crop, normally on one year contracts.  It is now going to offer three to five year contracts.  It also offering grants for investment in harvesting capacity, including technology such as irrigation and harvesters that can handle very wet weather.  85 growers have applied for these grants.

Recent poor harvests have been among the worst in four decades after drought in 2018 and floods in 2019,   McCain thinks this is down to climate change.  They consider they have to act to build a sustainable supply chain.

Hard cheese on trade deal

Britain's trade deal with Japan has been thwarted for the time being by a disagreement over the tariff on stilton cheese, exports of which to Japan are worth just £102,000 a year.   A milder form of the cheese is made for Asian markets.

Under the existing EU deal with Japan, Japanese tariffs of 29 per cent on hard cheeses such as cheddar will be phased out by 2033.  For other cheeses such as stilton only a quota of exports would be tariff free.

International trade secretary Liz Truss wanted to demonstrate that the UK could get a better trade deal under Brexit than that agreed with the EU, even if the gain was a small one in economic terms.

In 2014 she made a speech to the Conservative Party conference claiming that the fact that Britain imported two-thirds of its cheese was a 'disgrace'.

Lobbying victory for NFU

The NFU is pleased with the composition of the new Agriculture and Trade Commission.  It includes representatives of the English and Welsh branches of the NFU and the farmers' unions in Wales, Scotland and Northern Ireland.   There is also someone rather oddly described as a 'lamb farmer' and representatives of the food and drink sector: https://www.gov.uk/government/news/trade-and-agriculture-commission-membership-announced

In principle, this is a considerable lobbying victory for the NFU, but much will depend on how much influence it has on trade deals, not least that with the United States.

Its key role is to advise on 'Trade policies the Government should adopt to secure opportunities for UK farmers, while ensuring the sector remains competitive and that animal welfare and environmental standards in food production are not undermined.'   

So far, so good, but is role is advisory and the international trade department is likely to become part of a larger Foreign Office before long.    It also does not specifically mention food standards which have been one of the main areas of contention.

A correspondent has drawn my attention to the presence of Sir Lockwood Smith on the Commission.  He was formerly the High Commissioner for New Zealand in London.  Perhaps he is there to argue for the merits of zero subsidies and free trade, albeit his country is currently not admitting anyone who is not a national.

There is also a row brewing with the Scottish Government about common standards in the UK 'internal market' which may end up in court.

 

The challenge to arable farmers

I would just like to draw the attention of readers to an important new article just published online by Euro Choices on 'Post‐Brexit Policies for a Resilient Arable Farming Sector in England'.

This has been a competitive sector but, as the article points out, it faces challenges on a number of fronts ranging from the phasing out of subsidies to climate change.

One of the interesting aspects of the article is the specification of the range of sources from which farmers draw information.

Eustice wins trench warfare

Defra secretary George Eustice has won his battle with international trade secretary Liz Truss over protecting farmers from imports produced to lower standards than in the UK.  As so often the case, the devil is in the detail. 

An agriculture and trade commission will be set up to consider policies the Government should adopt in free trade deals to ensure UK farmers do not face unfair competition which would undermine high animal welfare and production standards.

Although the commission will be only advisory, it will report to Parliament.  Going against its recommendations would be awkward for the Government.   However, there remains a strong imperative to get a trade deal with the US and this will not be possible without concessions on agricultural trade.   President Trump is particularly reliant on votes from farm states.

It will be interesting to see who the chair.  I would expect the membership to include a working farmer with NFU connections and one of the few academics with expertise in international agricultural trade.

Don't resurrect the milk marketing board

Some dairy farmers have been hit hard by the slump in the liquid milk market after restaurants and cafes entered lockdown.  Some more milk was consumed at home, but not enough to make up for losses in the catering sector.  Some emergency help has been given to dairy farmers by the Government, but it has been criticised for not hitting the spot:https://www.nfuonline.com/sectors/dairy/dairy-news/dairy-response-fund-opens-for-applications/

Some farmers have been agitating for the return of the Milk Marketing Board.   The story of its demise is a bit more complicated than has been made out, e.g., in Private Eye..  It wasn't just down to the wicked EU - who rightly saw it as a state sponsored cartel.    Mrs Thatcher didn't like it, but Peter Walker defended it in England so the Scottish boards went first.

However, its demise was also favoured by the bigger dairy farmers who felt they could extract a better price if they weren't compelled to sell to a monopoly.   Remoter, smaller farmers tended to favour it because it ensured that they did have a market for their milk.

I wrote more about milk marketing than was good for my sanity, but here are a few key points:

• The price for manufacturing milk varied according to its final use, e.g., chocolate crumb v. yogurt. The milk supplied wasn't any different, but the price for manufacturing milk was lower than for the liquid market (roughly half of total output).  It's as if you charged more for steel if it was used in a Jaguar rather than a mini!
• Prices were determined by the Joint Committee in which each side - farmers and processors - had one vote.
• The franchise for the elections to the board rested with the cows, ten cows got one vote - the idea was to give bigger farmers more of a say.   Concerns about 'bovinisation' led to them being counted through occasionally.
• A big bureaucracy was necessary to operate the system.  Nice people, but as soon as they saw you expressing an interest, they tried to coopt you to their way of thinking.  They had the most to lose from dissolution.