Sons of soil left to wither on the vine

December 15, 2000

Agriculture in Britain has sunk to a nadir last seen during the Great Depression. Farmers were once the bedrock of British society and a powerful voice in the land, but who now cares what becomes of them?

The government's recent white paper on rural matters devotes just ten of its 176 pages to the crisis, and it drew a barely suppressed yawn from the press.

The Ministry of Agriculture, Fisheries and Food forecasts a per cent plunge this year in total inflation-adjusted income from farming to £1.71 billion. Since its £6.07 billion peak in 1995, it has fallen 72 per cent. Real annual income per full-time farmer has plummeted from £24,800 five years ago to £7,500. Not only is the farm income estimate for 2000 the lowest since 1973, a Maff official said the last time Britain saw such depths of farm poverty was "in the late 1930s".

That such a crisis has not sparked a political outcry is one sign of how the farming vote has dwindled. "As a proportion of the population, farmers are so small they do not have political clout any more," says Wynne Jones, principal of Harper Adams University College and a professor of agricultural education. Including seasonal and part-time workers, farming employs 600,000 people, just 2 per cent of the working population.

The pound's strength against the euro has caused much trouble. It has made agricultural imports from other European Union countries much cheaper, while devaluing the EU subsidies British farmers receive. "Many farmers wish the UK to join the euro," says Cled Thomas, professor of agriculture and food at the Scottish Agriculture College. But farmers' traditional allies, the Tories, are firmly anti-euro, as are most of the press.

Other factors have also cost the sector public sympathy. Press coverage of farming issues, from BSE to genetically modified crops, has tended to sacrifice analysis and diagnosis for sensationalism. What is more, the public wants the freedom to buy what it desires and has little time for losers, says one senior broadsheet journalist. "The miners and car workers all lost out, why should anyone feel special sympathy for farmers?" There are experts, however, who comprehend the gravity of the agricultural crisis.

One cause is global: a lack of demand caused by financial crises in Asia and Russia has led to oversupply and falling prices. "Small changes in demand can have a quite dramatic effect on prices, as supply takes time to readjust," says David Harvey, professor of agricultural economics at Newcastle University and a member of the Royal Agricultural Society of England's Strategy for Agriculture Committee. "At present, virtually no farmer in the world is making enough money to want to go on farming."

The price slump has been exacerbated by world trade rules that have lowered the barriers to cheaper agricultural producers.

In the EU, there is also the effect of weaning farmers away from subsidies under the Common Agricultural Policy. This year's E41.5 billion (£25.3 billion) in subsidies represents 44.5 per cent of the entire EU budget, with the amount up 2.3 per cent over last year. However, the rise is due mostly to a big jump in rural development aid. Subsidies for plants and animals are down. Moreover, money is being switched to compensating farmers for income lost to low prices rather than supporting high market prices. As this is calculated per hectare of crops or heads of livestock, it freezes the status quo.

Also driving CAP reform is EU expansion. The accession of ten Eastern European states is deemed essential for Europe's security and stability. It would, however, be catastrophic for the CAP because the would-be members are far more dependent on farming than present members.

Agricultural prices in the ten countries would have to rise to CAP levels. This would create problems for their citizens, whose incomes are lower than the rest of Europe's, and a surplus that cannot be exported under World Trade Organisation rules. The result would be a need for an extra E11 billion in subsidies. "Without CAP reform, the budgetary consequences would be unsustainable," the UK rural white paper warns.

Thomas says the EU should not be blamed for the state of UK agriculture, which Britain began subsidising in 1947. "It was tremendously effective in producing food cheaply and efficiently, and it was continued by the CAP. But just when its goals had been achieved, the goalposts were moved."

British consumers expect farmers to produce food to the highest safety, hygiene and environmental standards. One of the most contentious issues in the agriculture debate is how farmers should be helped to meet these new demands. Raising prices risks farmers being undercut by foreign competitors, but government subsidies for such "public goods" is unacceptable to the WTO.

Simply scrapping the CAP will not solve these problems. Harvey says:

"Membership of the EU is a convenient hook on which to hang these problems - but leaving the EU is equivalent to noting that a hanging man's face is turning blue and thinking that painting it red will solve the problem. The rope is not the EU. The rope is our history of support to the farming sector and its present irrelevance."

Harvey advocates removing all subsidies for food production, but this cannot be done overnight. He proposes a system of finite and limited compensation payments for farmers so they can retire or change tack.

Jones believes the industry is converting to this free-market option, but he thinks it will take a generation. Ending all subsidies, he says, would be a step too far: "Farmers would go out of business in droves."

UK agriculture gets £3.8 billion in support a year, Maff says. With total farm income of only £1.71 billion this year, the sector is already in deficit. "From plough to plate", the food chain in Britain is worth £57 billion a year and 3.3 million jobs - more than 11 per cent of the work force. Substantial job losses in this food chain would probably follow those in farming, Jones warns. "It would be very easy to export jobs in the processing sector to follow the sourcing abroad of its raw materials," he says.

Thomas worries that a completely free-market operation would dismember British farming. Some specialist or large-scale operators would survive, he says, but the transition would be "very difficult" and the effect on biodiversity would be immense. "With fewer people farming, the countryside would deteriorate. It would not be the countryside that people value today."

The white paper pays heed to the importance of farming beyond food production, but not to the idea of granting subsidies for preserving the countryside or allowing other organisations to assume that role. Instead, it suggests that farmers charge the public for access to these "environmental goods".

It offers plenty of help to farmers to find their way and to be more competitive in a world market, but it makes no mention of downsizing or safety nets for losers. "Twenty per cent of farmers account for 80 per cent of agricultural output. The question is getting policies to deal with the other 80 per cent - how to get restructure without anxiety, stress, suicide," Jones says.

Harvey thinks that most of British agriculture can prosper in the future, but fewer full-time farmers will be needed. As it is, many farmers now are over 55, and they and their children see no future in farming.

Also, although enrolments in land-based courses are holding up nationwide, students are harder to attract. Edinburgh University has stopped teaching agriculture. Luckily, there are new academic fields to work in countries hungry to join the EU banquet.

The Scottish Agriculture College proudly announced in November that Simon Davies of its management consultancy department would advise Romania's agriculture ministry. The college has done other contract work in Eastern Europe.

Presumably these eager Eastern European students are being taught lessons in successful agriculture not applied in Britain.

The white paper can be downloaded from the Department of the Environment, Transport and the Regions website.

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