Off to Oz to get away from UK politics!

Whether the growing gulf in output is due to the gold-plating of a lot of our regulations, including additional environmental requirements might also be investigated

I’M probably not alone in thinking that the recent performance of our political leaders is enough to make you want to leave the country – and I am ... I’m off to Australia.

In truth, it’s the first opportunity we’ve had to get away in order to visit my son, his wife and our new grand-daughter since the Covid restrictions were lifted – and while that will be a joy in itself, it’ll also be a pleasure to get a break from the most recent plot twists in the comic-tragedy soap opera which British politics has turned into in recent times.

Down in Westminster, it’s a fortnight now since, like two teenagers who have only just passed their driving test, the new PM and Chancellor took the mini budget out for the first spin on their own.

But, like their arrogant yet inexperienced driving counterparts, Liz Truss and Kwasi Kwarteng found themselves in trouble when they tried to pull off a handbrake turn – and in the process committed the financial equivalent of rolling the nation’s economy and landing it on its roof in the neighbour’s garden.

With everyone from the local taxi driver to the International Monetary Fund voicing criticism of the plan from the minute it was revealed, we’re all pretty well aware of the instantaneous and on-going consequences of this hubristic manoeuvre and will no doubt suffer from the effects for years to come.

Taking a step back from the wider coverage of what has been viewed as pretty catastrophic measure, it’s worth remembering that those in the arable cropping sector often see a rise in grain prices when there’s a drop in the value of the pound. With wheat and other crops having their value set on the world market, while the rise in prices might not be as dramatic as the fall in the value of sterling, there is usually a bit of an uplift for a period at least.

Be that as it may, though, at this time of the year when much of the crop has already been traded and when we have a long haul until the next harvest what we’ll probably notice more will be the horrendous rise in the price of our inputs.

This, of course, is likely to be even more of a blow when an increasingly high proportion of these inputs have to be imported from abroad just when the buying power of the pound stands at pretty much at an all-time low. And this certainly doesn’t auger well when country’s only manufacturing plant producing ammonium nitrate fertiliser has closed its doors and ceased production totally.

For all types of businesses, though, there’s also the prospect of a major adjustment to be made in the level of interest rates on borrowed money. Even if any surge in this area is delayed – by political interference or by the emergency intervention made by the Bank of England in the financial markets – there’s no getting away from the fact that it will catch up with us at some time in the increasingly uncertain future.

But, away from exchange and interest rates, looking deeper into the fiscal farce which floored our once proud economy as the value of our currency continues to trickle further down the drain, were there any crumbs of solace for the farming industry to be drawn from this dog’s dinner?

One area – which might have been overlooked in the general condemnation of the statement – was that (provided you ignore the disturbing effects of the levels of interest on borrowings) some of the small print in the financial statement could mean that planning investment in farm plant and machinery might be a bit easier in future.

In recent years the Annual Investment Allowance (AIA) - which allows spending in this area to be offset in tax over a single year – has swung widely from as low as £25,000 up to £1m. And there’s often be no indication at what level this allowance will stand when the farmers need to decide whether or not to make a major investment, and perhaps more importantly in this current age, when it will eventually be delivered.

So, with the AIA due to revert from £1m to £200,000 from April, 2023, the announcement that it will now be pegged permanently at that higher level at least gives a clearer indication of what level of investment can be set against tax in a single year, rather than written off over several.

And while the £1m level might seem huge to many sectors, including a fair few in other areas of the farming world, just look at the price which combines and other major pieces of kit are currently sitting at – and it wouldn’t require too much in the way of shiny new machinery or crop handling and processing facilities to reach this level (although whether or not this would be a wise move in the current financial climate is a totally different story…)

As Jeremy Moody, of the Central Association of Arbiters, pointed out: “Farmers should be able to make a timely investment for good reasons, not just to get a tax relief, but the difficulty has been knowing when to invest and whether that the allowance would be available. A farmer can now decide to invest in robotic milking machines, for example, and not be at risk should they not be delivered until next April.”

A commitment to making a policy statement on agricultural productivity this autumn also showed that there was some small recognition of the sector’s importance – and perhaps also of the fact that we’ve been falling well behind our competitors in terms of out and out productivity.

Whether this growing gulf in output is due to the goldplating of a lot of our regulations, including additional environmental requirements might also be investigated.

Defra’s decision to undertake a major overhaul of England’s flagship ELMS scheme might be in time to stop our own administration going too far down the same road and introduce some common sense which recognises the importance of food production as well as focusing almost exclusively on the environment and climate change.

But the signs aren’t good on this front. After Defra’s move was revealed, the RSPB immediately caught the news headlines criticising the re-think as the ‘biggest blow to nature’ in the UK for 40 years – and, sadly, later in the week the Scottish Government jumped on the same bandwagon, condemning the move and calling for the environment and climate change to continue to be the focus of farm support in the south.

It was said by farmers on the news – and it’s been said many times before – but the only way the high environmental standards and climate change targets will ever be delivered will be if there is a viable farming industry at its base. Without this, the countryside will go to wrack and ruin and the nation will simply export its food-related emissions while at the same time taking food out of hungry mouths in other parts of the world.

With a fortnight to go until our return flights, I guess we can only hope that once it gets a few more miles on the clock Westminster’s current administration can only improve on its first car crash minibudget and that ScotGov can waken up to the need to deliver an effective farm policy – or we might be tempted to stay put!