Farmers are the lifeblood of rural areas – let’s look beyond the figures
The Scottish Government recently released its latest statistics on Scottish agriculture, and the headline figures reveal that in 2017 it contributed 0.9 per cent of gross value added and 2.6 per cent of total Scottish employment.
This compares to, for example, a contribution of 10.3 per cent of gross value added and more than 12 per cent employment by the Scottish wholesale and retail sectors.
Even in remote areas of Scotland, while relatively more important, the economic contribution of agriculture is less than might be expected and is dwarfed by service sector activity. Private services alone account for 48 per cent employment compared to 16 per cent for agriculture, forestry and fishing combined.
The question therefore arises as to whether supporting agriculture is an effective way of supporting remote rural economies: would it be better to target other sectors better positioned to stimulate local economic growth and provide employment opportunities to young people?
I suspect that most of those involved in farming would put forward three arguments. First and foremost, they would point to the necessity of food production and the challenge of ensuring global food security.
Brexit may disrupt UK food supply chains and there is evidence that demand for local food is growing. Second, they would point to the many environmental benefits that farming provides.
Farming and land management supports valued habitats and biodiversity, contributes to water quality, provides natural flood management, can help to mitigate climate change, and provides the landscapes and access that underpin the Scottish tourism and recreation sectors.
Around 70 per cent of Scotland’s land is farmed, and agriculture has an essential role in maintaining Scotland’s natural capital. It is these environmental services that lie at the heart of the “public support for public goods” approach to post-brexit agricultural support being promoted by the UK Government.
The third argument would be that by supporting farming, you are supporting those supplying inputs and services to agriculture and the businesses involved in the purchase, manufacturing and retailing of Scottish food and drink products.
Competition in these sectors upstream and downstream from the farm sector has meant that many of these businesses may no longer be “local” in the sense of being close to the place where food is grown, or even located in rural areas. However, studies have shown that farming, and particularly livestock farming, does give rise to substantial knockon effects beyond the farm gate, with remote rural economies having higher multiplier effects as they tend to be more self-contained.
There are, however, additional arguments for supporting farmers as opposed to the activity of farming. Farmers and farm household members contribute to rural economies though on-farm diversification, such as farm tourism and off-farm work.
They are also members of rural communities and contribute to the population base, playing a particularly important role in remote areas which are sparsely populated. Such areas are often close to a tip ping point in terms of population levels, below which both social and economic activities are vulnerable.
For example, there is a point below which rural schools become unviable or rural health care too expensive to provide. Unlike the rest of rural Scotland, remote areas in Scotland have experienced demographic shrinkage since the 1990s.
Research at the James Hutton Institute has predicted that, if current trends continue, the total population in remote areas will decline by about a quarter by the year 2046, while the working age population would contract by about 30 per cent. The role of farmers and household members as members of rural communities is critical.
In terms of culture, too, farm households play a key role as guardians of distinctive dialects and traditions in rural Scotland. They also provide
community services such as snow clearing in winter or grass cutting. Although these may not appear to generate economic value added, they are essential for the wellbeing of rural residents and for rural resilience.
All of these are roles of farmers as opposed to farming. They are, from
an economic perspective, types of public goods in that they are not directly valued by markets or recognised in national accounts, and they are often overlooked by farming and environmental lobby groups.
Some might argue that alternative forms of land use and other types of