Western Daily Press (Saturday)
Only the Government can avert a crisis in farming
AFRIEND who casually mentioned to a land agent that he was looking to buy a farm was told to wait – because the way things were looking within the space of a few months he would be able to get much more farm for his money.
Not the most optimistic of predictions for the UK farming sector in 2019 but – and despite my personal opinion of them – land agents tend to have a pretty firm grip on the way the market is moving so perhaps it’s a view one should be prepared to take seriously.
In fact a few inquiries in various quarters have revealed the true extent of the situation: agents’ books are stacked up with farms for sale but they are only being released in a trickle for fear of collapsing the market.
And why should this be? Well because the lines on the chart tracking income and production costs have long since crossed – and not to the advantage of the farmers’ balance sheet.
The more farming businesses have failed to operate profitably thanks to historically low prices the more
A radical Government programme is needed to keep British farms on an even keel, says Richard Haddock, a West Country farmer and farm shop owner
farmers have had to borrow to stay afloat, with the result that British farmers are more deeply in hock to the banks than they have been for a very long time.
The banks aren’t unduly worried because their loans are pretty well secured. They stand to get their 450g of flesh whatever happens. We aren’t, after all, making any more farmland and the more of what we have is nibbled into for roads, housing estates and industrial units (making a small number of farmers very wealthy in the process) the more the value of what is left creeps inexorably up.
The paradox, however, is that hundreds of farmers are now asset-rich and cash-poor. And so deeply indebted that any significant rise in interest rates – as inevitable as night following day – is going to place an unsustainable strain on their finances and the skies will accordingly darken with hundreds of towels being thrown in.
The strain, even ahead of base rates going up, is already showing: in the South West farming support groups are dealing with more cases than ever before – and thank goodness they are there to lend support and a sympathetic ear, because I see no such initiatives on the part of the CLA or the NFU, from whose sphinxlike immobility you might suppose there is no crisis out there at all.
But there is, and it could have cataclysmic results if nothing is done to recession-proof the industry against it. And whose responsibility might this be? None other, of course, than the Government’s for in just two months it will be handed the reins of the British farming sector by Brussels and told to get on with it.
But it would only require Michael Gove and Neil Parish to do a ringround of a few agents to gain an accurate (and probably chilling) assessment of the state of play within the industry.
At which point they will realise they dare not risk Brexit having any adverse effect on the profitability (well, notional profitability) of British farms unless they want half of them to be wiped off the map.
What does this mean? That this is no time for vague talk about ‘environmental goods’; for Son of Stewardship schemes which only tie farmers up in more red tape and regulation; for trusting that that discredited and shambolic fifth-hand Reliant Robin of bureaucratic machinery that is the RPA will suddenly come good and start to function as it should (though hasn’t for the last 18 years).
It is time, on the other hand, to start drawing up a short-term emergency plan to enable British farms to keep operating after Brexit, includ- ing a loan pool offering no-interest assistance and a comprehensive suite of grants for the renewals, replacements and reinvestments which have been crying out for attention for years but which haven’t been affordable.
And in the medium to long term we must have in place a broad range of grants to encourage new blood into the industry including interestfree start-up loans for young farmers, grants for machinery and stock, and even help targeted specifically at young farming families – in France there are even fuel grants to help cover the cost of getting children to and from school from remoter spots.
Only if we install such a programme are we going to keep British farms on an even keel and prevent our food export bill going off the scale. It may appear a bit of a daunting task to Messrs Gove and Parish but the only alternative will be to call all the supermarkets in, instruct them to raise all their food prices by 10 per cent and make sure the increase is passed straight back to the producers.
Which option is more achievable?