Thursday, March 29, 2018

Back to 1947?

Today I attended a Defra consultation meeting on the agriculture and food green paper in Harrogate. There was a good attendance of over eighty people,including a large contingent of farmers.

Defra personnel insisted that 'nothing was set in stone', but they also said that the secretary of state had set a very clear direction of travel.

The clear view of farmers in the direct payments breakout session was that they wanted an across the board reduction in support, i.e., no capping.

There did seem to be a hankering for the world of the 1947 Agriculture Act. In particular, deficiency payments were mentioned. However, the Treasury would never endorse them as the spend is so variable.

I am not convinced that all the money saved by capping will be transferred to new farm schemes. Many of these schemes may not be accessible to all farmers, so the idea that any money lost in direct payments will be compensated elsewhere is optimistic.

It was argued that the figures that showed a high level of dependency in support payments were too optimistic, i.e., the level of reliance was even greater.

It was evident in a discussion on knowledge transfer that many farmers were benefiting from small self-help groups where they could see new methods tried out in practice. However, it was probably the more efficient farmers that were making use of these arrangements.

Above all, a great deal of uncertainty prevailed given that we do not know the shape of any trade deal with the EU and third countries.

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Sunday, March 25, 2018

Fruit and vegetable production should get post Brexit boost

The Landworkers' Alliance has issued a report arguing that fruit and vegetable production should be boosted after Brexit: New deal for horticulture

It argues that directing more of the budget towards fruit and vegetables will deliver much of what Mr Gove wants in terms of health and sustainability.

However, it is already difficult to secure labour to pick such crops. Google searches by Romanian, Bulgarian and Polish citizens looking for agricultural jobs in the UK dropped by 34 per cent in the past year, according to a study by GK Strategy and OneFourZero.

The fall in interest from overseas has not been matched by an increase in searches from UK workers for UK farm jobs. Bulgaria saw the largest drop, with 2,000 fewer searches for UK jobs in January 2017 compared with the same time the year before.

The two companies said Google search data was a good early indicator of changing behaviour patterns because people increasingly looked online for job vacancies.

The UK agricultural sector already has a 29 per cent shortfall in seasonal workers. The Government has so far failed to introduce any kind of special scheme.

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RPSCA calls for two tier animal welfare support after Brexit

The RSPCA has published a report Into the Fold discussing how animal welfare could be supported as a public good justifying taxpayer support. It suggests a two tier system that limits support to those who go 'above and beyond' the minimum in animal welfare: RSPCA proposals

The RSPCA argues that producers should not be rewarded for 'business as usual' or for being legally compliant. Tier one would be a transitional payment awarded to producers for things such as improving buildings, better stocksmanship or to compensate for higher running costs.

Tier two payments would be awarded to members of a higher welfare assurance scheme, such as RSPCA Assured, covering the whole life of the animal.

The report gives some examples of payments that could be made to farmers and how much they would cost. For example, allowing all pigs access to straw might cost £70 a weaner and would amount to £20m if 25 per cent of the national herd not currently weaned on straw were to take up the support.

Implementing a veterinary plan to cut lameness in sheep might cost £10 a ewe, giving a total bill of £89m annually based on a 25 per cent uptake of flocks not currently covered by RSPCA standards.

These are quite substantial sums given the amount that would be released by 'capping' payments to larger farms and the fact that there will be other claims on that money.

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Wednesday, March 14, 2018

Defra to get big staff boost

Defra gets the second largest additional sum of any department (after the Home Office) to prepare for Brexit, an additional £310m. About 80 per cent of its work is affected by Brexit, given that its main task in the past was to seek to influence EU policy and implement directives It needs to develop new systems for agricultural policy, fisheries management and environmental protection. In particular it needs to develop the Government's rather vague green paper on food and farming into a set of viable policy instruments.

Staff will be boosted by 65 per cent. Of course, in the interim, many experienced staff have been lost. Under New Labour I had a period of secondment with the animal welfare team, and I was impressed by the way they integrated veterinary expertise with more generalist skills. But, like the rest of Defra, they were subsequently hollowed out.

Stakeholders such as the NFU will be giving evidence to the House of Commons Defra committee about the department this morning. It will be interesting to hear what they have to say. The initial discussion seems to be about farm policy rather than Defra's capabilities, but I will watch some more later.

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Monday, March 12, 2018

The grass isn't always greener in New Zealand

As Brexiteers point to the sunlit uplands, they draw attention to the way in which New Zealand agriculture has flourished since the withdrawal of subsidies. A number of caveats are necessary. The original measures were accompanied by a devaluation of the New Zealand dollar and an end to restrictive practices in ports. Even so, some farmers did take a big hit and went out of business.

What strikes me today about the New Zealand economy today is how dependant it is on exports of dairy products and in turn how important the Chinese market is. Admittedly, the share of dairy products in exports peaked a couple of years ago at 35 per cent and has dropped to just under 30 per cent, but that is still a heavy reliance on one set of products. New Zealand does, of course, have an ideal climate for dairying, although there are environmental concerns about levels of water abstraction for irrigation and the pollution resulting from intensive dairy farming: Green image threatened .

The co-operative Fonterra is New Zealand's largest company and the world's biggest dairy exporter. It supplies almost a quarter of New Zealand's exports. China is its biggest customer, consuming a quarter of the milk produced by Fonterra farms.

It will be recalled that in 2008 Sanlu, in which Fonterra held a 45 per cent stake, was involved in a scandal involving infant feeding power which led to the deaths of six babies and left tens of thousands and others in hospital. The Chinese authorities did not hold back and executed two of those involved and jailed others. The scandal helped overseas companies dominate China's powdered milk market. Foreign brands account for about three quarters of powdered milk sales in China - worth $19.7bn a year.

Now Fonterra has lost out in a different way through its minority stake in Chinese infant formula manufacturer Beingmate. It has lost 70 per cent of its market value in three years and has made losses in the last two years, $152.5m in the year ending December 2017. There have been problems with pricing after a clamp down on price fixing, the distribution network and the discovery of counterfeit powder by the Shanghai police which hit revenues.

Farmer members of Fonterra are getting increasingly concerned and urging the co-operative to drop the investment.

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Saturday, March 10, 2018

A shortage of experts

The Sunday Express once named me as one of the five hundred most influential people in Britain because I was the only person who understood the Common Agricultural Policy. This was wrong on two counts. First, I have never fully understood the CAP: I am always making new discoveries about its complexities.

Second, there are a dozen or so academics in Britain who understand the CAP better than I do from the disciplines of economics (Alan Swinbank, Alan Matthews), law (Michael Cardwell) and political science (Alan Greer). Conspiracy theorists may wish to note that three of them are called Alan: is this a derivation of 'alien'?

Sometimes the media contact me on the assumption that as I know something about the CAP, I must understand the Common Fisheries Policy as well. It is a mystery to me. I know that we have had enough of experts, but the one academic expert on the CFP that I knew has long since retired. I am aware that there are some conflicts about fishing stocks between marine biologists and fisher folk. The best short account I can find of the CFP is here: Senior European Exp**ts

What is clear is that fishermen (they are mostly male) do follow a very dangerous and demanding occupation and live in tight knit communities. They have been vociferous in their criticisms of the CFP and bringing it to an end is one of the core demands of Brexiteers who see it as an affront to British sovereignty and an area where we need to take back control.

The fact that the EU now appears to be using the CFP as a bargaining chip in the negotiation is potentially politically explosive. Continued access for EU fishing vessels to UK territorial waters in accordance with existing fishing rights is being advanced as a trade off against tariffs on agricultural products and, more importantly processed food and drink products to the EU.

But we should remember that this is a negotiation. Each side is going to push its own interests and perspectives, but ultimately there is a mutual interest in finding common ground. Hopefully.

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Tuesday, March 06, 2018

'Flexitarians' are the real challenge

In the latest Farmers Weekly a 'Cotswold farmer' argues that the vegan movement can be defeated by a lack of publicity. 'I would suggest that we as farmers stop trying to justify our industry and ignore the vegan militia. The press will become disinterested with no televised arguments or public squabbles, and the issue will fade from the public eye.'

I think that the issue is more fundamental as it involves moral or lifestyle choices, changing conceptions of personal identity and what constitutes a well lived life. That moral choice is in my view undermined if people are pressured to eat only particular types of food, rather than making a choice based on an assessment of the issues.

The number of vegans (people who consume no animal products, including dairy or eggs, has trebled in the last decade according to the Vegan Society but still only make up about one per cent of the population). About five per cent of people are vegetarian, but 55 per cent of meal alternatives are eaten by non-vegetarians. I prepare vegetarian food for vegetarian friends or a vegan picnic for a vegan friend.

The AHDB states that 'flexitarianism' is a bigger issue than vegans or vegetarians. 'There are more people looking to limit the amount of meat they eat.' They are concerned about health issues and the contribution of livestock farming to climate change. There is an effort to go without meat on at least one day a week (which, of course, used to be Catholic practice). Concern about animal welfare is also on the rise, particularly among younger people.

The decline in per capita meat consumption has been masked by population growth. But there should be more marketing opportunities for fruit, vegetables and pulses - if farmers can get the staff to harvest them.

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