It’s crunch time for agriculture. The livestock industry is in crisis and farm businesses are about to face one of the biggest challenges to their survival – Secretary of State Owen Paterson’s decision on the new Common Agricultural Policy regime.
Europe has agreed the funding of next phase of the CAP and it is now up to our Government to decide how to distribute the money.
Some ask why we still need to have a Common Agricultural Policy when the historical reasons for its existence – stimulating food production in starving post-war Europe – seem to be in the distant past.
The British and European food market is dependent on subsidies. Despite recent concern amongst consumers that food prices are rising, food remains relatively cheap compared to other costs of living. In the mid-60s household expenditure on food was 28%; now it is about 8-10%. An increase in food prices to historic levels is unimaginable. While there have been technological advances and efficiencies in farming – they have not achieved the cost savings required for farmers to derive sufficient returns from the market place to farm profitably.
Environmental measures have become a much valued component of the CAP, recognising the key role farmers have to play in maintaining the biodiversity of our country. Key to these is the Stewardship Schemes whereby farmers get a payment for income forgone due to a reduction in the cattle and sheep on the land to encourage habitats and wildlife.
Given the vociferous debate that has taken place across Northumberland on the subject of wind farms it is very clear that our rural and upland landscape is valued. Expectations have been voiced that we should preserve our beautiful countryside, with its green fields, hedges and heather moors. These features are not wild - they are a result of nature being managed by farmers – and they exist due to generations of farming. Without grazing livestock like cattle and sheep, our valued landscapes will disappear. No grazing livestock can be seen in some parts of Scotland where vast areas are reverting to scrubland and are impregnable to walkers. Our hills must look good and be accessible for everybody – tourism depends on it.
Yet where are the voices, so loud against the wind farms, being heard defending the people who create our landscape – our farmers?
Although I found attending the recent DEFRA consultation at Hexham Mart interesting, it was far too late in the day - it seemed decisions had already been made - and as a result it was very frustrating.
Owen Paterson’s preferred option for CAP money distribution is 15% of the direct farm budget (Pillar 1) to be used for Pillar 2 – which would go towards a number of farm and non-farm based projects including environmental projects, yet the details are to be confirmed. The preferred option of the NFU and MPs’ EFRA select committee is 9%, which would pay for all existing schemes and generate a surplus of £1bn for new projects. At 15%, what would the secretary of state’s extra billions be spent on? I believe that it is crucial that any future land-based scheme should be to the benefit of active farmers and not large landowners who are not active farmers.
Already large proportions of the money for environmental schemes go to agents and consultants - people who design and apply for the schemes. Many schemes also benefit large organisations. Owen Paterson is proposing new landscape impact environmental schemes. Money for environmental work would be given to projects covering large areas of land.
This would be most readily accessible to large landowners who control the land and expert manpower required to apply for grants. It is naive to assume that individual farmers can compete on an equal footing with powerful landowners by working together, especially where some are on short-term farm business tenancies and cannot commit for the required time.
Many of DEFRA’s new proposals will result in more money being sucked out of agriculture and rural areas. One of the benefits of giving farmers sufficient money to operate is that they are good investors in the local economy, support local merchants craftsmen like fencers, and other local businesses. DEFRA needs to both support farmers and seek additional Treasury funds for rural development, broadband, roads, schools, connecting electricity supplies and other rural services.
The proposal to target certain areas of the country for extra environmental support - when HLS and UELS Stewardship schemes expire - will lead to great disparities between regions. Perhaps the Southern Uplands will beat Northumberland in the competition for funds? Approximately two thirds of Stewardship schemes are expiring within the next two years. If we are beaten, all of Northumberland’s farmers currently implementing DEFRA’s existing environmental schemes may find themselves rapidly having to reverse all of their environmental work. They will have to return to getting greater income from the market. Having reduced the number of animals to comply with current schemes farmers will find it difficult to increase production in future - especially as many upland pastures have deteriorated as a result of environmental schemes.
Our upland farmers are in a poor financial state, with huge fuel costs for transport, and high living expenses. Some depend on electricity generators costing over £7 a day. Our hill farmers would survive if the DEFRA proposals giving an increase in area payments for moorlands and SDA upland areas are approved. Uplands and moorlands represent 17% of England’s land area but only receive 7% of the payments. A reduction in the payment to lowland farmers is required to pay for this as it is only 60p per acre it is hardly going to cripple lowland farmers - but it would save our hills and uplands.
You only have to visit rural areas in other European countries to realise the problem with agriculture is not Europe – it is how DEFRA implements the CAP. Major competitors such as France (3% to Pillar 2 announced soon) and Ireland (predicted very low) are directly supporting farmers much more. Owen Paterson is creating an unfair and uncommon market for English farmers in Europe.
Conservatives say they want farming to be without Single Farm Payments so production costs, market and consumer prices must follow a ‘normal’ free market model. Yet DEFRA is taking action to send the market in the opposite direction by gold plating directives from Europe into burdens for farmers. Electronic Identification of sheep was extended by DEFRA to lambs going direct to slaughter.
Instead of an eartag costing 8-10p each lamb has an electronic tag costing 50p more. By this action DEFRA increased the price of production overnight. DEFRA also chose not to implement the European sheep carcase classification. Pork and beef carcasses are subject to rules of what farmers must be paid for. DEFRA chose not to introduce any rules for lamb.
So abattoirs cannot be inspected by the Rural Payments Agency to monitor and police proceedings making sure farmers are paid fairly. Earlier this year Owen Paterson told local farmers at a meeting in Belsay that they would have to farm properly and learn to live without the single farm payment, getting all their returns from the marketplace.
It is utterly naïve to think that in the foreseeable future the market will be free enough, fair enough or willing to pay enough so that livestock farming is profitable.
I regularly hear a clamouring that Britain needs more powers from Europe. With the CAP we have these powers. Yet farmers would have got a much better deal if decisions had been taken in the corridors of Brussels rather than Whitehall. Even worse, pulling out of Europe would make farmers totally dependent on DEFRA for support. Would that support be forthcoming?
A well farmed, profitable countryside, full of wildlife, easily accessible by the public, with long-term strategies built on the views and needs of local people should be our aim for the future.