Written by Mike Donovan
What will be the farming policy be for the new government? Keir Starmer promises pain before gain, yet so far the Defra budget has not been discussed in any detail. It’s the principle question in the minds of all 109,000 farmers and its 471,000 workforce today. Farming employs 1 per cent of the national workforce and contributes 0.5 per cent, or £11.2 billion of gross value added. But food and drink, which relies heavily on domestic farm production, employs 456,000 and produces £151 billion. It’s farm efficiency which provides food manufacturers with ingredients at low cost and high quality.
Squander farm production and you damage food manufacturing. They go hand in hand. Damage the supply of food ingredients and manufacturers look overseas, alter products and farmers stop producing the higher risk crops. As farm numbers decline, so the proportion of farms with a business income exceeding £100,000 increases, but this is a reflection of economies of scale rather than profitability per se. Support has been built into farm budgets for 70 years and is there to do the job of regulating the trading results of all farm businesses. Farmers know there is a cheque in the post, however it has been earned.
Government needs to know that the £3.5 billion which has been total farm spend for some years is a serious contributor to a stable and profitable food industry, one which is far more mobile than farming. Take a portion of this away and the sector is in danger of economic depression leading to reduced production, investment and an increase in rural poverty. A look at East Anglian farming after the repeal of the Corn Laws in 1846 shows a massive swing from high output and productivity financed and protected by the tariffs on corn imports to the influx in the region of low cost Scottish farmers and crofters, and others, who brought with them hardy livestock which provided the affluent urbanites in London and the S East with food for their table.
The farm budget jury will be out for some time, don’t expect early decisions. The national budget is having to absorb exceptional items including the funds for Ukraine, Gaza and the region and also the vexed question of asylum seekers. Each is a cost which equals that of farm support. Government enthusiasm for large scale projects will be put on hold for some time while the adventures of Messrs Johnson and Co are smoothed out. The response of the City to the Liz Truss / Kwasi Kwarteng budget which drove the value of sterling down to $1.03, its lowest ever level is not an event Starmer wishes to repeat.
The farm budget, ELMS, the SFI and other initiatives will remain, but subject to tinkering and ceilings. There will be opportunities for farmers to sell small scale development areas, particularly those not in Green Belts, AONBs, National Parks and others. Britain will remain a green and pleasant land.
