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Anthony Hilton: Our farmers are in for some fallow years after Brexit

Roughly two thirds of farmers rely on subsidies to keep going
Roughly two thirds of farmers rely on subsidies to keep going / Alamy Stock Photo
29 January 2019

ritain’s farmers produce around 50% of the nation’s food. The rest is imported, mostly from other EU countries. The sector benefits from the Common Agricultural Policy, which is the EU-wide support scheme for farmers. There are about 87,000 businesses in the UK helped by CAP payments, and they account for over £2.1 billion a year in subsidies.

Roughly two thirds of farmers rely on subsidies to keep going. Town dwellers have an image of fat-cat farmers turning every subsidy into a goldmine at their expense, but the reality is rather different. The majority scrape by on an average wage; relatively few do well.

Partly this is because, although 70% of land is “farmed”, a fair proportion is of low quality — sheep grazing on the fells and Welsh hills for instance, or forestry. To some extent that also explains the poor productivity of the sector. It is 17th in the EU, producing roughly half of what France or Germany does.

The leading productive country was the Netherlands, which has nine times the output per hectare of Britain (though the Dutch are unusual in this regard). But among the EU countries, Britain did better only against Latvia, Lithuania, Ireland, Estonia and Bulgaria.

Anyway, according to Michael Gove, the environment minister, this is going to change. His plan, unveiled last September, is to use Brexit to phase out CAP payments over seven years and use the money instead for environmental schemes. Farmers will get payments for hedges, water quality, catchment areas, wildlife and so on. The money will be 85% for the environment and such like and roughly 15% for food production.

This is a problem for farmers. They may have voted for Brexit but they did not think they would lose their subsidy, accounting for on average 60% of their income, as a result. Not that they mind the green stuff, but they think it should be leavened with policies for food production. Gove’s paper does not really go into that, perhaps because he did not want to disappoint the farmers. He, or more likely his successor, is, however, highly unlikely to dish out subsidies.

So the rural lobby is making its own waves, including a conference last week at Hadlow College outside Tonbridge. And it showed a lot of what was good and much that was bad in trying to boost the sector.

For a start, agriculture is only 2% of GDP, so realistically why should Parliament be bothered with it? If the food producers were involved as well that would amount to 10% of GDP, which is more like it. If you get the supermarkets onside then that would be a forceful lobby. But farmers are on their own.

Indeed much as the conference might hope farmers would get a break, the food producers and the supermarkets see themselves on the opposite side of the fence, pandering to the consumer, screwing down prices, and taking the lion’s share of the profit for themselves. Farming is a low-margin industry, and it is hard to see the supermarkets doing anything about that.

Farmers also want to produce more and get a better price for it, the conference said. Well, supermarkets may give them a bit of leeway if the EU becomes pricey, but the chances are they will seek to source food from other jurisdictions instead. Some of this will be well sourced, and of good quality; others, one imagines, will be less so.

Will UK farmers go for quality? Or, as their subsidies drop, will they go for volume? And if they go for volume, will they get into the race to chlorinated chicken, for GM food and whatever else is on offer? And will the supermarkets care?

The conference wants farmers to go upmarket, with the help of technology, plant genetics, robots, and soil science, saving time, cutting costs, no longer having to hire migrants to pick fruit, and increasing sustainability. Farmers are already working with drones and sat nav and being much more efficient as a result, but there is much further to go.

But robots are barely there yet. One idea is for a robot to pick strawberries. The problem, apart from cost, is that it cannot easily recognise and handle different varieties, and those it can handle tend to get squashed. Farmers and manufacturers need to talk to each other about making them better, but while they do, and while they wait for a functioning robot, who will replace the migrants?

The fact is that the rural sector has been ill served by government. High-speed broadband is still not available in large parts of the country, with BT deciding it is much more profitable instead to do sport.

Big data is often collected by researchers but it is not given in bite-sized chunks that farmers could use. Housing is difficult because townies snap up second homes which locals can’t afford. Vocational skills for young people have hardly existed since trade schools were abolished 50 years ago. And all this is happening without any vision for climate change.

It is going to be an interesting time. Some farmers, perhaps 25%, should do well. The others I am not so sure.