Reality of trade deals will soon hit home
Farmers and the farming press are still bewildered and angry at the trade deal with New Zealand. We know that there is no imminent threat as Asian markets and China in particular is much closer and the amount of product from New Zealand coming into this country is quite small. However, things can change and very quickly and given China’s behaviour it is always possible that market access or volume there is suddenly changed and New Zealand has our market, especially as all tariffs are gone after 10 years open to unlimited access.
It’s the principles of the deal which also angers the industry; our own government which is looking to lift welfare standards here and know which products are banned; opening the door and talking about ‘equivalent’ methods of production. Given that pesticides such as paraquat are still allowed and scale and type of operations are so different to ours I would say it stretches equivalency rather beyond rational thought.
Henry Dimbleby, who was commissioned by government to write a food strategy for England, slammed ministers for ignoring his advice on protected standards in trade deals. Are we surprised? Not really. This column stated from the outset that trade deals would be a huge challenge to farming and that food production would not feature as desperation to strike deals would override agriculture.
The biggest issue with the trade deals struck with New Zealand and Australia is that the template is set and if and when negotiations start with the USA and Brazil, then reality will really hit home. Lord Deben (John Gummer), former Conservative agricultural minister and chairman of the Climate Change Committee, branded the New Zealand deal ‘a disgrace’. The pig industry still has a backlog of pigs on farm amounting to around 150,000 pigs and we have now lost 25,000 breeding sows from the industry – and this will no doubt continue as farmers leave. Looking at the poultry industry and the way processors there have shared the pain with farmers, absorbing millions of pounds as they cope with the same labour shortages in processing; why the difference? I suspect it’s the fact that the poultry cycle is very short and farmers could very quickly leave a shed empty or more, which would very quickly shorten supply, creating further problems pushing prices up and would cost more all round. The other reason is that the poultry industry is much more integrated and the whole supply chain works together to meet difficulties and challenges.
In the pig sector it is very different as sows continue to give birth and piglets must be looked after and reared and is much more long term; a conveyor belt of production which cannot be switched off quickly or easily. With half the pig production owned by processors, not only have they not done anything to help, they have in fact looked after their own, pushing all the surplus onto independent producers; a sorry state of affairs. So badly has the pig industry been hit that AHDB (levy body) is setting up a plant to render 2000-3000 pigs a week from overstocked farms. AHDB divisional director of engagement Will Jackson said: ‘The provision of a cull and render service in an established abattoir will offer farmers who cannot sell their pigs, at any price, for processing into the food chain, a way to minimise the impact of the situation’.
Dairy farming seems to survive any haulage issues pretty well, but there is concern over rising costs of inputs just as there are in every other sector. We all hope that prices will settle as some costs are easing now but the trend is still very much upwards. Environmentalists will be pleased to see that the cost of nitrogen fertiliser has more than doubled and that will certainly mean that less will be used and it will all be used very carefully. Cereal farmers have got off to a cracking start for next year’s harvest and most of the drilling is done up and down the country; including Scotland. Some progressive farmers tell me they have sold a fair proportion of next year’s crops forward as it is trading at around £180/t at next harvest. Lamb sales are still good with store lambs selling for £75- £80/head last week; up £12/ head on a year ago. Numbers are tight and lamb values have increased markedly abroad with sheep numbers still to recover in the southern hemisphere after periods of drought. Conditions for tupping this autumn are good as the rams are let out with the ewes and things should look well for a good crop of lambs next spring.
A major faux pas for Red Tractor, AHDB and the NFU recently, which makes one wince, prompting me to ask myself; who is advising these organisations? First out of the blocks was AHDB, publicly stating that it was holding back the £250,000 contribution to Red Tractor’s budget until it saw a strategy and a plan for how the money is to be spent. Farmers have since predictably challenged AHDB for wanting to hold Red Tractor to account, whilst denying them the opportunity to hold them to account with a vote next spring on whether they want to pay the levy or not, as promised by George Eustice. Ouch!
Red Tractor then decided to have a comparative list of New Zealand production standards compared to the UK on Twitter; getting it wrong! Embarrassingly Beef and Lamb New Zealand corrected Red Tractor on this – what a mistake. It is not Red Tractor’s job as an assurance body to enter this arena, never mind getting it wrong.
Not to be outdone in the stupidity stakes, the NFU has embraced Jeremy Clarkson, who has done the industry proud in terms of ‘Top Gearing’ communications for our industry; something all of the above struggle to achieve effectively.
Clarkson has won numerous accolades and awards recently for his Netflix series, with the NFU cosying up to share the spotlight. However in a fit of ‘Clarksonism’, on stage, he made some very unpalatable remarks about the government and what ‘we’ (including NFU as they were cuddling up) are going to do to them; using very colourful and graphic language. All of the above were attempts to be popular with farmers and embrace populism; the ‘thing’ of today. It has all backfired spectacularly and I sincerely hope they have all learned their lesson.
Meanwhile I have been astounded to find that water companies have discharged raw sewage into water courses 400,000 times in the past year, a 27 per cent increase on the previous year according to the Environment Agency and much of it illegally. Yet the bosses of England’s nine water companies have been paid more than £65million in the past five years and more than £15billion has been paid out to shareholders since 2010.
Just imagine if this had been agriculture.
There would have been an outcry, with various organisations and pressure groups lining up to have their say. What we have though is relative silence. Why? England and Wales are the only countries in the world to have a fully privatised water and sewage disposal system. It’s not working that well is it?
Pic: Getty Images