Helping older farmers retire

The Government's scheme to fund early retirement for farmers has had a mixed reception, although some farming organisations have given it a qualified welcome.   This extensive report includes a quote from me: https://www.newsandstar.co.uk/news/19313523.cumbria-reacts-government-scheme-pay-older-farmers-retire/

Cabinet row over Australian trade deal

A battle royal is in progress in Cabinet on whether Britain should agree a tariff free trade deal with Australia.  Brexiteers think that if a trade deal cannot be concluded with Australia no deals will be possible for the new 'Global Britain'.

However, farmers - already reeling from the phasing out of support payments - are concerned that it could hit their markets and be a precedent for future deals, particularly those with the US and New Zealand.

On one side of the argument is international trade secretary Liz Truss.   On the other side is Defra secretary of state George Eustice, backed up by Michael Gove.   Gove is concerned that rural areas in Wales and Scotland would be hard hit, further undermining the union.   Reports are suggesting that Boris Johnson may come down in favour of the deal.

Beef and sheep meat would be the main commodities affected, although Australia is also interested in exporting more cheese.   There is a 20 per cent tariff on beef at present which would be phased out over 15 years.   

Australian farmers benefit from greater economies of scale, allowing them to undercut on price.  The writer well remembers visiting a huge drylot beef farm in New South Wales.

The RSPCA said Australia had lower standards on chlorinated chickens, sow stalls that confine pregnant pigs and growth hormone treatment for beef.

How farmers voted on Brexit

A lot of myths have grown up about how farmers voted in the referendum on leaving the EU.  Based on a self-selected Farmers Weekly survey, or simply on anecdotal evidence about posters on countryside hoardings, a view has developed that farmers voted overwhelmingly for Brexit.

Up to now we have lacked any hard evidence, but that has been rectified by a survey of farmers reported in the Journal of Rural Studies by Daniel May and his colleagues.

The headline finding is that farmer voting was not greatly out of line with the electorate as a whole.  50 per cent reported voting leave, 45 per cent remain and 5 per cent did not vote.  This implies a higher turnout than the population as a whole, although some who did not vote claim that they did in surveys.

There was a slight tendency for women farmers to be more likely to vote remain.  However, the strongest predictor of voting behaviour was level of education.  60 per cent of those with GCSE or equivalent voted to leave compared with 20 per cent of those with postgraduate education (admittedly a small N).

Dairy farmers voted leave by 58 per cent to 38 per cent and pig and poultry farmers had a 53 per cent to  34 per cent leave lead.  Pig and poultry farmers received relatively little from the CAP and dairy farmers may have seen themselves as tightly regulated by it.

There were some regional differences.   Farmers in Scotland deviated from the trend there with 67 per cent voting leave (51 per cent in Wales).  Farmers in the east and south of the country were more likely to vote remain, but in part this reflected national voting trends.

The 'bring back control' theme seems to have resonated with farmers in terms of their personal perceptions.   Farmers who state that they face too many restrictions imposed by the EU including those on agrochemicals were more likely to vote leave.   For some EU regulations were seen as preventing them making higher profits or having more market power.   Voting for Brexit is perceived as delivering more control over their businesses.

A first draft on the effects of Brexit

This article appeared in the latest issue of South-East Farmer:

Many farmers breathed a sigh of relief when a last minute trade deal was agreed between the UK and the EU, avoiding the threat of tariffs and quotas on agricultural exports.   Of course, this would have affected some sectors more than others, notably those farming sheep.  Such enterprises exist within the south-east of England, but they are more characteristic of remote hill farming areas in all the four nations of the United Kingdom.

I must admit to having a personal interest as my brother-in-law and nephew are sheep farmers in a remote part of Wales.   They have merged three farms in order to run as lean and efficient an operation as possible.   However, the whole enterprise is reliant on selling sheep for meat and the price they receive is influenced by the 40 per cent or so of total output that goes to mainland Europe.   The price received for wool scarcely covers the cost of shearing, if that, and rental income from properties and telephone masts is very much secondary.   The suggestion made by one politician that sheep farmers could shift to beef ignores the realities of production.

Farmers are generally enterprising and keen to keep input costs under control.   One farmer I know in Yorkshire produces honey with a distinctive taste from the moors, but still principally relies on his contract with a leading supermarket.   The more general point here is that the basic payment received by farmers under the Common Agricultural Policy is being replaced by a smaller domestic payment that is being phased out more quickly than some had anticipated, particularly for larger scale farms.

Other new forms of payment will be available, principally the Environmental Land Management Scheme, although that is still being developed and tested.  Along with other payments, it will fall well short of compensating farmers for the loss of the basic payment which made the difference between profit and loss for many farm enterprises.    It will also involve form filling to obtain, along with monitoring of outcomes, and is likely to be more suitable for farmers in remoter areas.   This is not necessarily a bad thing from an overall policy point of view, but it may prove challenging for, for example, larger scale arable farmers in south-east England.

In areas like the south-east there are, of course, opportunities for diversification that may not exist in remoter areas, particularly those that are less suited to tourism.   In this area as well, farmers have been very innovative in the range of ideas they have put into practice.   There can, however, come a point where one is no longer running a farm business, but a farm that enhances other projects such as wedding venues, restaurants, shops and petting zoos.

It is, of course, a personal business decision how far to go down this route.   A note of caution is necessary for late adopters.  Much of the low hanging fruit has already been taken.   The capital costs can be considerable and the skills required can be very different from decisions about what to plant, when to spray and when to harvest.   That said, many farmers manage to both farm and run complementary businesses.

Agriculture was the dog that didn’t bark in the night time in the very long legal text arrived at between the UK and the EU.   Indeed, listening to the discussions during the negotiations, one was left with the impression that fisheries were the really vital sector despite the fact that it accounts for a smaller share of the economy than agriculture.   Fish did enjoy considerable symbolic value in terms of ‘taking back control’.

There was an annex on trade in wine.   This is not really my area of expertise, apart from enjoying it and investing in one well-known business in the South-East.  As with most such agreements, the devil is in detail, but I would have thought that at first glance it was broadly acceptable to those growing grapes and producing wine in England.  [A subsequent article in the Financial Times refers to certification costs which could add £1.50 to a £12 bottle of imported wine.  This, of course, could make domestically produced wine more price competitive, although factors other than price can play a big part in purchase decisions].

In simple terms what the annex says is that EU and the UK should import and consume each other’s wine, although the flow is clearly from the EU direction.   The documentation required is limited to a certificate which can be produced electronically.   The self-certification is limited to eleven relatively straightforward questions.  The agreement will be reviewed after three years, a shorter period than for fisheries.

What will the Biden presidency mean for a trade deal with the UK?

This is a slightly updated version of an article published in South East Farmer:

What will the Biden presidency mean for the trade deal with the United States, particularly in relation to agriculture?   One thing that is clear is that it will not proceed as quickly as it would have done in the absence of a change of administration.  

There are a number of reasons why this is the case.  First, Joe Biden has made it clear that the emphasis in the early phase of his presidency will be on domestic issues, specifically the Covid-19 pandemic.  One key international priority will be climate change.  International trade be less of a priority. 

Second, a new administration means a change of personnel.   A new US Trade Representative will need to be appointed to run what is in effect the US’s Department of International Trade and that will take at least two months after the inauguration.   Once that person has been approved by the Senate, they will need to work out their strategy.   Trade relations with China will be an early focus.

It is the case that there have been quite detailed technical negotiations between the UK and the US and it is understood that draft chapters of a potential agreement have been mapped out.   However, the issues have always been political rather than technical.  If there is political agreement, the legal language to fulfil it can be provided.

The biggest obstacle here was the effect of Brexit on the Good Friday agreement, about which Joe Biden has expressed concern.  Not all issues in relation to Northern Ireland have been resolved by an means, to put it mildly.  Biden identifies strongly with his Irish heritage.   Asked a question by a BBC reporter, he replied: ‘BBC?  I’m Irish.’   Ireland is also a concern for the House of Representatives which would have to approve any agreement and which still has a Democrat majority.

It is unlikely that a UK–US deal will be reached before the president’s 'fast track' authority to sign trade deals (formally Trade Promotion Authority, TPA) expires on 1 July 2021. Its absence makes the congressional approval procedure much longer and more troublesome. Biden may find that he has more important things on which to use his limited capital with Congress than trying to renew TPA.

Even if an agreement was reached, there is no reason to suppose that it would be any more favourable to UK agriculture than one reached under President Trump.    Nick Clegg claims that Joe Biden said to him ‘very unsentimentally – in that folksy way he does – “‘We are not going to sign anything that the chicken farmers of Delaware don’t like!”’   Delaware is one of the largest chicken producing states in the US and the product is washed with chlorine.

Joe Biden’s personal links with chicken farmers aside, there are more fundamental reasons why any agreement is likely to favour US agricultural interests.    Unlike the UK, where Defra has a multitude of tasks and does not necessarily treat farming as a priority, the US Department of Agriculture is a powerful department with a focus on farming that has the lead on the agricultural dimension of trade negotiations.

Tom Vilsack has proved a controversial choice as nominee for Agriculture Secretary, being seen as too corporate and unacceptable to key Biden support bases: https://www.theguardian.com/commentisfree/2020/dec/21/joe-biden-tom-vilsack-agriculture-secretary   

Whoever gets the job will be backed up by the agriculture committees in each house of the Congress that usually have a preponderance of members from areas that have significant agricultural businesses, while the agribusiness lobby remains strong.   In summary, any agreement that is reached will reflect US agricultural interests, particularly given the willingness of the UK to make sacrifices on agriculture to make gains elsewhere.

As far as Brexit more generally is considered, Biden has made it clear that he thinks it was an historic mistake and he would have voted against it if he could have done.   There is wider disappointment in the US because the UK could be relied upon to bring a perspective to EU discussions that took account of American viewpoints.   However, that is largely water under the bridge for now.

Here come the robots

I am always a little sceptical of technological fixes.   They are always accompanied (understandably) by a certain amount of boosterism, not just from the innovator or the operating company, but also from politicians.   Technological adoption is in practice socially mediated.

There is no doubt that the fruit and vegetable sector has been hit hard by Brexit in terms of his ability to secure labour need for picking, sorting and packaging.  Far fewer workers than in the past will be let in under the seasonal workers scheme and many regulars have been put off by the fall of the euro against the pound.

The usual response from British politicians is to recommend the use of more local labour.  However, relatively few of those who express an interest sign up and many of those that do don't last.   Even when they do, their picking rates are poor.   It is monotonous, backbreaking work.

The second type of argument used by politicians is that the answer lies in the use of new technology and that indeed a scarcity of labour could help to force its adoption.   I am all for new technology if it is appropriate and affordable.

Devising robots to pick and service, for example, soft fruit is no easy task and it has to be recognised we are some way off effective availability at an affordable price.  We would also need people with the right skills to programme and maintain the robots, although usually that service is provided by the manufacturer.   

The capital cost issue can be dealt with by growers not buying the robots but paying a fee based on the crops harvested.

The estimable Judith Evans had a long article on the topic in the Financial Times yesterday.   Without breaching the Pink Un's pay wall or copyright, I think that I can quote a few key points:

1. For now we are really at an 'advanced research and development stage'.   Claims about commercial availability vary, but we are at best a few years off in terms of any substantial impact. Norway's Sage Roberts hopes to have 10 to 15 robots in the field next year to fight mildew on strawberry plants, followed by a harvesting function in 2022.
2. Eventually, robots should be able to reduce the number of workers required for harvesting by 50 to 70 per cent.
3. Robots do not necessarily pick faster than humans, but they can operate around the clock.

The Government is funding several robot projects, e.g., a demonstration farm in Kent.

Read more from a leading company here: https://xihelm.com/

Agriculture and food move further apart

The Covid-19 pandemic has seen a massive increase in supermarket power in the food chain with much of the hospitality sector closed down, says Tim Lang of City University.  I would add, how far will people revert to their former habits of eating and drinking out when we eventually return to a version of normality, a date that is advancing into the future.

Lang also says: 'UK food policy has fragmented despite talk of "levelling up". English farm policy now says next to nothing about food. It’s focused on ecosystems. Northern Ireland’s border is becoming the Irish Sea, not 310 land miles. The Agriculture Act anticipates dramatic cuts in farm subsidies. At last, say some. Me too, as they kept farmers in serfdom, producing too cheap commodities from which others took the value – but no-one wants more expensive food.'

Some real dilemmas there.   I have started work on a commissioned book on a radical analysis of agriculture and food policy.  One of the challenges is to see how far we can integrate the two, as happened during and after the Second World War.  Given the tendency of government to operate in 'silos', I am not too hopeful.