Category Archives: DEFRA

In the dark? Could there be a ‘bespoke’ agricultural policy after Brexit

MP for Stroud, David Drew, Shadow Farming and Rural Affairs Minister, retweeted a link to a Farmers Weekly article,Devolved regions left in dark about plans to take farming out of transition agreement’.

Scottish Office Minister Ian Duncan has suggested that the UK will have its own agricultural policy in March 2019. He said: “We believe taking UK farming out of the CAP during transition is the right thing to do. As farmers you will be better off”.

Professor Dieter Helm, chair of the Natural Capital Committee, is advising the Department lor Environment Food and Rural Affairs (DEFRA) on British agricultural policy (BAP) post-Brexit. He says the EU’s principle of paying farmers for the area of land they farm under the basic payment scheme (BPS) should go and asserts that the BPS does not actually affect food production.

But UK farmers subsidise the low (and unjust) prices received for the food they produce with the BPS payments, which average about £25,000 a year per farm according to an article in the Private Eye, issue 1456, which refers to figures from DEFRA’s Farm Business Income Survey :

For 2016-17, the average cereal farm is forecast to make a profit of £38,000 and the average lowland livestock farm £19,000, though the survey also noted that over 20% of cereal, dairy, lowland grazing livestock, mixed and poultry farms failed to make a profit in 2016/17. Without the BPS, most farms would have traded at a loss.

But the DEFRA survey’s figures were said to include BPS receipts and exclude farmers’ wages or personal drawings.

A 2016 LEI study for the NFU concluded that all UK regions would show, on average, a decline in farm incomes if the UK government fully abolished the direct payments. The UK trade liberalisation scenario would show the most significant changes; farm incomes would decline in all regions, except for the East of England where half of the UK horticultural farms are located, as they do not receive single farm payments (now superseded by BPS since Jan 2015) for fruit, vegetables and table potatoes.

How will UK farmers be protected from subsidised food exports from EU farmers who still enjoy BPS payments?

The column in Private Eye (1443) pointed out that given targetted production subsidies Brexit presents a real opportunity to introduce a bespoke British agricultural policy. A British agricultural policy (BAP) could:

  • encourage more mixed patterns of farming,
  • discourage industrial livestock production and
  • reverse the increasing imbalance in Britain’s trade in food.

To this end, DEFRA is urged to seek advice from other quarters – Professor Tim Lang comes first to mind.

 

 

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More land is growing crops free from genetic modification and synthetic pesticides

Lancashire organic farmer, Tom Rigby (right) draws attention to news that In England, DEFRA data shows a 47.2% increase in land in organic conversion.

Latest government figures on UK organic food production show the sector is continuing to thrive on the back of strong organic food sales, says organic licensing body OF&G.

DEFRA’s organic farming statistics show that while the amount of organic land fell by 3.6% in 2016, the amount of UK farmland in organic conversion rose by more than 22% – rising to 47.2% in England. Their organic farming figures are available here.

Permanent pasture continues to account for the biggest share of the country’s organic area. The number of organic cattle increased on the previous year, while organic pig numbers rose by 5% and organic poultry numbers have shown the largest increase, rising by 10% to just over 2.8m birds

Roger Kerr, chief executive of the largest organic farming certifier OF&G (below right), said:

“The amount of land in organic conversion shows that farmers are recognising the huge potential from the sector to make a profit from farming organically.

“Industry figures show that the UK’s organic food sector is the only food sector showing consistent growth, with increases of between 7 and 10% reported this year. And with demand for organic products in the UK and globally predicted to grow again this year, we know UK farmers, growers and processors are attracted to organic production”.

Mr Kerr ends: “As demand increases for quality food, more support is needed to ensure UK production increases, and organic is pointing the way forward. We need more domestic production to feed the growing demand for quality food and organic has a critical part to play in that.”

 

 

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Butter price rise: falling milk production, rising demand, adverse weather, liberalisation – low prices are still the elephant in the room

As salaried workers in the commercial media, futures markets and organisations including the NFU, AHDB, DEFRA, DairyUK and RABDF pontificate about the situation, it is good to see that the ignored elephant in the room is slipping in to the columns of the Financial Times.

Emiko Terazono, commodities correspondent, reports that many dairy farms in Europe and Brazil have endured years of ‘sluggish’ (aka low) dairy prices and quotes Kevin Bellamy (Rabobank): “Many dairy farms in Europe and Brazil are suffering from a shortage of young cows to bring into the herd after the years of sluggish dairy prices. Because of the period of prolonged low prices the young stock aren’t there”.

She refers to the EU’s move to liberalise its dairy market in 2015, lifting restrictions on production and exports, which caused prices for fall by more than half between 2014 and 2015, with many dairy farmers around the world going out of business or struggling under increased debts. The EU then responded by introducing voluntary output cuts and compensated farmers for not producing milk. World milk supplies from leading five producer regions slipped 0.4% in 2016.

January protests outside the EU Council building covered here. Above, see the European Milk Board’s Faironika, the artificial cow canvassing for fair payment for dairy farmers and explaining the nutritional value of milk, the role of farmers and their value to the rural economy

During the protests in January, Sieta van Keimpema, dairy farmer and vice-president of the European Milk Board, the lobby group representing the region’s producers, “Milk producers all over Europe are still in the throes of the crisis . . . and although the milk price has rebounded from last year’s lows, it is still lower than the cost of production”.

 

 

 

Hats off to DEFRA if they continue to ‘reboot’ farm policy in favour of small family farms

private-eye-logo“Not only do small family farms (defined as covering less than 250 acres and requiring the labour of one or two people) employ more people per acre and provide a wider variety of locally produced food than larger farms, but there is increasing evidence that they are less damaging to the environment.”

This passage in the latest Private Eye (1429) mentioned research findings published in a new state funded study carried out in the Netherlands and an online search added detail from the FT.

lidwien_smitDr Lidwien Smit, an environmental epidemiologist at Utrecht University, found that the biggest contribution to deaths linked with air pollution in Europe comes from agriculture, as risky to breathe as that in a traffic congested city.

She recommends that intensive farms in particular should be subjected to the same strict pollution rules as other industries.

In September, the study was presented to the European Respiratory Society’s international congress in London. Professor Stephen Holgate, the society’s science council chair said that the findings underline the need for governments to take tougher action on farm pollution: “It raises a very important issue; there needs to be much better monitoring of intensive farming’s pollution plumes that spread out across the neighbourhood”.

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Private Eye reports that DEFRA is to use part of a £16m EU emergency dairy aid fund to help farmers ‘hit’ by very low milk prices to encourage grass-based farming systems.

The NFU, whose ‘lobby’ is often said to be dominated by large farmers that pay the biggest subscriptions) has, however, made ‘counter proposals’.

The farmer who writes for Private Eye, hopes – as we do – that DEFRA will ‘stick to its guns’ and also that all the UK’s regional governments and national assemblies will go on to make discrimination in favour of small-scale family farms central to farm policy in post-Brexit Britain.

Labour MEPs call for action to ensure UK dairy farmers get a fair deal

jude and paul mep farrnersIn February, Labour MEPs called for the EU, UK government and consumers to act to ensure North East farmers get a fair deal.

The price of milk in UK supermarkets has fallen to levels which are unsustainable for UK dairy farmers, with prices dropping from £1.39 to just 89p. See DEFRA’s Forecasts of Farm Business Income by type of farm in England – 2014/15.

The NFU suggests that this is leading farmers to leave the industry with around 60 having left in December alone. Milk in supermarkets in the UK can now be cheaper than water and the price can be below the cost of production. In response MPs have called for an EU-wide review of milk prices.

Paul Brannen, MEP (above with North East MEP Jude Kirton-Darling) for the North East and Labour’s European Parliament spokesperson on agriculture and rural development, said:

“It is simply not fair for a dairy farmer to be paid less for a litre of milk than it costs to produce. We must collectively and speedily inject fairness into the relationship between dairy farmers, processors, supermarkets and, importantly, customers . . .

“We also want the UK government to write to the banks encouraging them to be as supportive as possible of dairy farmers during this difficult period, including making loans available.

“And in the longer term we want to see farmers working together more, in order to increase their clout in the market and move themselves up the supply chain, by investing in food processing and the production and marketing of processed products such as cheese and yoghurt, as this is where the money can be made . . .

“We are calling on the British consumer to ask probing questions of their supermarket manager, as they have done in the past about fairly traded products from the developing world, to find out if a fair price has been paid to the farmer for the milk we buy.”

Paul adds: “We want to see more powers given to the Groceries Code Adjudicator, whose role it is to ensure there is fair play between British food processors and retailers, so she can take action across the supply chain.

Paris conference: food security and climate change mitigation

richard wrightRichard Wright (the Scottish Farmer) reported in December that the United Nations Lima-Paris Action Agenda is aimed at “robust global action towards low carbon and resilient societies” as countries, businesses and NGOs signed on to a series of new commitments under the agenda, including several on agriculture.

COPA, which represents European farm unions, helped to secure recognition that food security was as important as climate change mitigation. Mr Wright wrote:

“The Paris event was about long term aspirations, and one certainty is that the world population will continue to grow. That makes food security vital, both for developing countries and for those that rely on food imports, since increased demand in the face of restricted supplies can only drive up prices.

“Because this was formally recognised, article two of the COP 21 agreement says that climate change mitigation policies can only be pursued in a way “that does not threaten food production”. This is a big concession for agriculture.

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“Green groups have been pressing for unrealistic targets to cut methane emissions from livestock; they also want new targets to reduce reliance on fossil fuels, and the European Commission had bought into some of these arguments. In reality, any such measures in Europe would have had little impact on a global scale, so long as others are building new power stations.

“The farming lobby, thanks to Article 2, can now argue that these can only be imposed if they can be effective without threatening food production.

“But this does not mean the farming lobby can simply play this card and seek to block any change. Farmers need to make clear to the commission and the wider public that they accept the need for climate change measures, because they are the first in society to suffer from changes to weather patterns. The industry must make it clear that agriculture wants to be part of the solution and play a key part in delivering on the Paris aspirations.

“If, as scientists predict, we are on our way to warmer, wetter summers and winters it will certainly adversely affect Scottish and indeed European agriculture. That means it is in farmers’ interest that climate change is tackled in a way that is effective.

“If this is to happen, the commission must be ready to invest a lot more time and effort in finding ways to cut methane output from livestock, without affecting farm productivity or food production. That is a big challenge, but one the commission will have to accept rather than simply imposing targets.

“If farming is to be seen to deliver, more will also have to be invested to allow the industry to produce a carbon balance sheet

“This would show how carbon from producing food under commercial conditions is offset by farm land in general, and forestry in particular, acting as a sink or means of carbon sequestration”.

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As André Leu, president of IFOAM, an organization that promotes organic agriculture and carbon farming worldwide, said in an earlier post on this website, “This is a game changer because soil carbon is now central to how the world manages climate change.”

William Taylor, speaking on behalf of Farmers for Action NI, calls for the introduction of systems like that in the pre-EU Isle of Man system, where regional produce, which must come from the nearest source, must all be used first before any is imported.

Referring to the wasteful and polluting food swap practice highlighted by then MEP Dr Caroline Lucas, Mr Taylor says that it is not logical for the US to support a climate change conference in Paris and then continue to have the same food (for instance, beef) sailing from UK to the US whilst another ship sails from US to the UK with the same cargo.

MP Rishi Sunak, William Hague’s successor, on the milk price crisis

rishi sunakIan Potter sends news of the work being done by Rishi Sunak, the new MP for William Hague’s old seat in Yorkshire. He sits on the DEFRA select committee and has been doing a lot of work on the milk price crisis, both in the select committee context but also doing his own research.

Mr Sunak says: We know how much a farmer gets paid for a pint of milk, and we know how much we pay for it in the shops. What we don’t know is how big the margins are in-between. We need to work towards the kind of transparency that allows us to follow milk from farmer to shelf in order to ensure a fair price is being paid at every stage. Good supply chain practices then need to be enforced by a tough Grocery Code Adjudicator and strong code of practice.

Rishi Sunak has come up with a ten-point plan for the industry – a series of practical proposals, some short term some mid-to long-term:

Ten steps to help save British dairying

LAST week I spoke to an 80-year-old farmer in my constituency who told me that in a lifetime of dairy farming he had never seen times so bad. With farmgate milk prices falling 30% in a year – in many cases below the cost of production – it’s far from an exaggeration.

I have spent the last few weeks speaking to dairy farmers, industry experts and government ministers about the terrible difficulties the industry is facing. It’s clear nobody can wave a magic wand and resolve a situation ultimately caused by a global glut of milk, but I believe there are ten key steps that can, and must, be taken if we are to protect this most valuable element of our rural community:

  1. More retailers giving farmers a fair deal

Many supermarkets have worked hard through a time of rock-bottom global milk prices to ensure that British farmers receive a sustainable price. That said, more can be done and it is absolutely vital every major retailer pays a fair price for British dairy produce. You can see how your supermarket treats its farmers by checking the National Farmers Union website – if you’re not happy, vote with your wallet.

  1. An end to milk being used a permanent ‘loss leader’

All of us have seen the price of milk plummet in recent years, with many supermarkets now charging only £1 for four pints. This kind of pricing can have widely detrimental effects. That’s because low prices in supermarkets force down prices all across the market, forcing your corner shop to cut its milk price in order to compete, in turn putting pressure on milk producers. Milk is a quality product, and pricing should reflect that.

  1. Better labelling of British produce

It might seem like there is little that could be more English than a slice of Cheddar, but what many consumers don’t know is that many of the major cheddar brands on the shelves are produced in Europe. We need to have clearer packaging that empowers consumers to buy British.

  1. More domestic production of dairy products

It’s a scandal that two thirds of our cheese and 30% of our butter is imported from overseas. We need to invest more in processing technology to make sure we are adding value to British milk by turning more of it into British butter, yoghurt and cheese rather than importing so much.

  1. More supply chain transparency and enforcement

We know how much a farmer gets paid for a pint of milk, and we know how much we pay for it in the shops. What we don’t know is how big the margins are in-between. We need to work towards the kind of transparency that allows us to follow milk from farmer to shelf in order to ensure a fair price is being paid at every stage. Good supply chain practices then need to be enforced by a tough Grocery Code Adjudicator and strong code of practice.

  1. More dairy Producer Organisations

Groups of farmers banding together to negotiate a better sale price for milk and a lower purchase price for feed and machinery are commonplace across Europe, particularly in the successful German market. In the UK we currently have only one such producer organisation. If farmers are going to balance out the power of big processors and retailers that needs to change.

  1. Government must buy British

National government is working hard to purchase British dairy products, but more can be done at a regional level. We must push local government, hospitals, schools, and military establishments to do more.

  1. A working dairy futures market

Futures are a way for farmers to agree a pre-arranged price for milk they will produce in the future. The price stability this can give has the potential to be invaluable to the volatile dairy industry. We need the UK to follow in the footsteps of the USA and New Zealand in making a working dairy futures market available.

  1. Review of levy board spending

Every dairy farmer in the UK currently pays a percentage of their income to a government- run levy board. Many farmers feel that more of that money needs to be spent promoting the benefits of milk and encouraging consumers to choose British. It is vital that farmers feel like their levy money is being spent in a way that actually helps them.

  1. Immediate financial assistance

The EU has announced a €500m crisis fund to support vulnerable dairy farmers and we must get our fair share. Also, it is important that regular CAP payments to farmers should be made as quickly as possible to ease cash flow problems. Lastly, HMRC and banks must understand the inherent volatility in farming incomes and be flexible in how they treat farmers.

COMMENT FROM RISHI

Without its dairy farmers, Yorkshire’s magical landscape would soon see its lush fields turn to scrub and its dry-stone-walls go unrepaired.

Meanwhile, with Britain already only 60% self-sufficient in food, our country’s ability to feed itself in a time of crisis would be diminished.

Only by working together can we preserve our dairy industry, and with it our beautiful countryside, for generations to come.

Mr Potter thought this plan worthy of circulation and asks readers to email any comments to malcolm@rishisunak.com