Farming fortunes are mixed at the moment – with some doing better than others. But that could all change, says Clodhopper.
Can you remember why you came into farming? I guess somewhere your answer involves the phrase “food production”.
Unfortunately, our political leaders don’t seem to recognise the importance of food production. Agriculture appears seems of little interest. Yet soaring inflation means things are rapidly in danger of getting out of control.
If you look at the mess the party in power has made over the election of a new prime minister – and reflect on the promises of the final two candidates – you may begin to understand my concerns.
Liz Truss became prime minister on the back of promising tax cuts. Those cuts are now being made. But look what happened in Sri Lanka when a change in prime minister heralded the introduction of sweeping tax cuts and reduced VAT from 15% to 8%.
Tax revenues dramatically declined. It was good for some of the people you might think but not for the country as a whole. And Sri Lanka is much worse off financially than we are – but like us it is also still recovering from the covid pandemic.
What happened in Sri Lanka was a catastrophe for farmers. The new government banned imports of chemical fertilisers, telling farmers they should use locally sourced organic fertilisers instead.
The results led to widespread crop failures and a 39% fall in food production, mostly rice. The monetary system became unstable and the currency shortage worsened, leading to spiralling food prices, fuel shortages and long queues at filling stations.
Does this ring any bells? I don’t suggest for a minute that we may fall into the same trap as Sri Lanka. But there are clear similarities between the decisions made there and the pledges made by our political leaders here in the UK.
Ongoing concern about rising farm input costs – and the decision by CF Fertilisers to temporarily halt production of ammonia at their Billingham site in north-east England – only serves to illustrate the fragile nature of supply chains.
There is constant talk too from this new government about the importance of food production and food security – but there is little real action. Meanwhile, continued problems with Mr Putin will mean an uncomfortable winter for us all.
Talk is cheap. The commitment to reaching net zero, reducing our carbon footprint and lowering greenhouse gas emissions have eliminated much of our ability to maximise UK food ouput.
Balancing environmental needs while feeding the nation is at a crossroads. Add in further environmental constraints and it means the farming industry faces mounting challenges over the next few years.
Like all industries at the moment, farmers also face soaring inflation. Reducing inputs such as nitrogen fertiliser is not the answer. Whether cost cutting measures will work is also questionable.
Although the livestock sector is suffering, many arable farms have had a decent harvest and seem content with current high prices, albeit unfortunately on the back of other people’s misfortune. They are prepared to continue investing in their crops.
We may not see severe food shortages in the UK. But it is clear that food will continue to become more expensive for a while yet. Whether those the price increases are passed back to the farmers pockets remains to be seen.
It is clear too that large farms will continue to expand with ever increasing overheads – leaving smaller farms to fight among themselves over the best second hand machinery and worry about cashflow pressures.