I felt quite nostalgic returning to my old stomping ground at Harper Adams University for the recent Andersons Seminar on the ‘prospects for UK agriculture’. The room and seating were identical to when I sat my exams years ago. I left with similar feelings, excitement mixed with trepidation about the outcome. Will the result be good or bad?
Significant change in UK farming
Things are definitely going to be different. We are on the cusp of the most significant change for UK farming in a generation. For me, someone who both directly farms and works in the ag service sector as an agri-specialist PR consultant, it’s an exciting prospect overall.
The presentation first reviewed how farming has fared so far, particularly through Brexit followed and the global pandemic. The good news is, we’ve done pretty well. Overall, farming is in a good position, with high prices for most commodities.
Unlike most sectors, agriculture has come through COVID relatively unscathed, with economic output maintained. Even in a pandemic, the world has to eat! Some positive trends in buying behaviour have favoured the domestic market, such as an increase in home cooking and a preference for products displaying the Union Jack. Whether this a permanent shift, remains to be seen.
Brexit and Trade Agreements
Brexit has had relatively little impact so far. The Trade and Cooperation Agreement (TCA) has preserved the status quo on UK/EU trade, so we’ve seen little market effect to date. However, new trade deals could be gamechangers.
One slide in the presentation showed the Gross Value Added (GVA) by sector. 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 compared to other sectors. This could affect future trade deals, as the government is unlikely to prioritise food and farming.
The free trade deal with Australia and New Zealand was a key talking point. It is likely to exert pressure on UK grazing livestock. The volumes of beef and lamb these countries can export to us will increase over the next 15 years, eventually becoming uncapped. This could mean as much Australian beef on our supermarket shelves as Irish beef. Although the full quota probably won’t be used, the real concern is the precedent this trade deal sets with other countries likely to want similar arrangements.
Future Farming Policy
We were given the latest intel on future farming policy. No longer bound by the CAP, we can do what we want with farm support. However, it’s naïve to think it’s going to be a bonanza, especially post-COVID. The UK is expected to sit below current EU payment levels.
As BPS is phased out over the next four years, the support landscape will become more complex with a raft of new schemes alongside ELM. Very little detail is available on these policy developments, with more information expected in the autumn. To get the same level of financial support, a major shift in farming protocol will be required. Policy will centre around the environment and public goods (which doesn’t include food by the way). If you configure ELM to replace BPS money, you will sacrifice profitable margin elsewhere. Few incentives build environmental management into the commodities we produce.
The real concerns lie in sectors that are largely unprofitable without financial support, particularly family farms grazing livestock. Without BPS, agri-environmental money and diversification income, average farm business income for beef and sheep businesses sits in the red. If these farms cannot navigate the new support landscape and transition to more sustainable farming models, they will disappear. Andersons data suggests that by 2030 there will be 11,700 fewer full-time farms.
The Role of Smaller Family 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.
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!
