I had quite a sense of nostalgia when I returned to my old stomping ground at Harper Adams University to attend the recent Andersons Seminar on the ‘prospects for UK agriculture’. Not only was the room and seating arrangement identical to when I sat my exams some years previous, I left the QMH with very similar feelings. Excitement, combined with some trepidation as to the final outcome. Will the result be good or bad?
One thing I know for certain is that things are going to be different. We are on the cusp of the most significant change for UK farming in a generation and for me - someone who both directly farms and works in the ag service sector as an agri-specialist PR consultant – it’s on balance, an exciting prospect.
Before delving into the intricacies of the new ag policy and outlook by sector, the presentation looked at how farming has fared to date; particularly through the turmoil of Brexit followed by a global pandemic. The good news it, we’ve done pretty well. And overall, farming is in a good position, with high prices for most commodities.
Impact of COVID - what virus?
Unlike most sectors, agriculture has come through COVID relatively unscathed, with economic output maintained. After all, even in a global pandemic the world has to eat! There have even been some positive trends in buying behaviour that have favoured the domestic market. For example, an increase in home cooking, prompting many consumers to seek products displaying the Union Jack. Whether this a permanent shift, remains to be seen.
Brexit and trade issues
Similarly, Brexit has had relatively little impact so far. The Trade and Cooperation Agreement (TCA) has preserved the status quo on UK/EU trade meaning we’ve seen little market effect to date. That said, new trade deals could be something of a gamechanger.
One slide in the presentation showed the Gross Value Added (GVA) by sector – an economic output metric. Right at the top sits the property sector bringing in a GVA of approximately £65 billion per quarter. Agriculture, including fishing and forestry, is a tiny minnow by comparison - sitting right at the bottom of the graph. This could well be a factor in future trade deals. In this context, the government are sadly unlikely to prioritise food and farming.
The free trade deal with Australia and New Zealand was a key talking point, as it is likely to exert pressure on UK grazing livestock. The volumes of beef and lamb these countries can export to us will gradually increase over the next 15 years after which it will it be uncapped. To put this into perspective, in 15 years’ time there could potentially be as much Australian beef on our supermarket shelves as there currently is Irish. Its widely thought that the full quota probably won’t be used. However, the real concern lies in the precedent that this trade deal has set, with other countries now likely to want similar arrangements.
Future support for UK farmers
While the detail is still severely lacking, we were given the latest intel around future farming policy. Ultimately, no longer bound by the CAP, we can do what we want when it comes to farm support, but it would be extremely naive to think it’s going to be a bonanza. Not least because the treasury needs to balance the books post-COVID. It's assumed the UK will drift lower down the ladder in terms of global farm support and sit somewhere below current EU payment levels.
As BPS is gradually phased out over the next four years, it is quite clear that the support landscape to replace this is going to be pretty complex with a raft of schemes set to be introduced alongside ELM. There’s very little detail on these policy developments at the moment, with more information due in the autumn. The consensus is however, to get anywhere near the same sort of money back, a major shift in farming protocol will be required for most farmers. Ultimately, with policy centred around the environment and public money for public goods (which doesn’t include food by the way) even if you configure ELM to replace BPS money, you will sacrifice profitable margin elsewhere. There appears to be few incentives that build environmental management into the commodities that we produce.
Concerns for smaller family farms
The real concerns lie in those sectors which are largely unprofitable without financial support and clearly, it’s the family farms grazing livestock that appear to most at risk. Without BPS, agri-environmental money and diversification income, average farm business income for beef and sheep businesses sits in the red. If these farms, along with the poorer performing farms in other sectors, are unable to navigate the complex new support landscape and transition to more sustainable farming models, then they will disappear. Sadly, this is what is predicted to happen with Andersons data suggesting that by 2030 there will be 11,700 fewer full-time farms.
This is a sobering thought and I whole-heartedly agree with latest comments from Prince Charles in saying that the smaller scale family farms should be at the heart of a sustainable farming future. To allow this, the government must recognise their contribution when refining the detail of future policy.
Opportunities for UK farming
While there are undoubtably some major worries that some farms will be unable to adapt to what’s on the horizon, ultimately change does bring about opportunity. ‘Farming carbon’ could present one such opportunity. As an industry there is vast potential to sequester carbon but monetising this is going to be challenging and it won’t necessarily be the pot of gold that some farmers are hoping for. That said, low-carbon farming could provide a branding advantage for UK produce.
As we move through the transition period over the next four years or so, hopefully the detail will become a little clearer and farm businesses can start planning for a prosperous future. In the meantime, I think the message for farmers is to remain vigilant for any opportunities to raise your game, in which ever way you can!