Farmers face hardship Oct03

“My family has farmed here in East Anglia for five generations”, a Suffolk farmer said to me the other day. “It has been a struggle for the last five years and I cannot see how we can go on!”

The hot weather in August has been good news for farmers as it has made for an easier and less costly harvest without the need to dry the grain. Although the yields may be down, the quality of grain is higher and should fetch higher prices. With a higher wheat price due to lower global wheat reserves and a weaker Pound against the Euro, British farmers will have increased cash flows and profits for the first time in many years.

The Government’s Annual Census indicates that there has been a slight recovery in farm incomes over the last 18 months. Industry analysts have suggested that an average farmer working 100 hectares of wheat, barley, oil-seed rape and set aside would have harvested at a loss of £3000 in 2001, improving to a loss of about £250 last year and recovering to a profit of about £14,000 this year.

However, this does not reflect the fact that about one thousand farmers file for bankruptcy each year, resulting in the loss of 52,000 jobs last year. Agricultural earnings have fallen by 70 per cent over the last ten years and by a third in the past five years.

Successful farming seasons mean jobs not only for farm workers, but all those who supply farm inputs, lease and service farm machinery and transporters of farm produce. Failing farms result in job losses not only on farms but in towns and villages as well, forcing young people to leave rural areas and seek employment in cities. These deserted villages and towns, populated only by elderly citizens, in turn threaten the viability of rural shops and services, including the local bank, post office, newsagent, chemist and health clinic.

The EU’s Common Agricultural Policy has resulted in over production, highly inflated prices, inefficiency and, on the continent, outright fraud and deception in submitting farm data. EU CAP reforms will gradually reduce subsidies for production, forcing farmers to seek funding for improving the quality of product as well as enhancing the rural environment.

British farmers are reputed to be more efficient in producing both subsidised and non-subsidised crops. They have higher costs for labour and better health and safety standards to protect animal welfare. Under the reform package, our farmers will be required to compete globally with foreign farmers not subject to the same labour costs or stringent health and safety standards. This will seriously undermine the competitiveness of our farmers and lead us to be dependent on increasing our food imports from outside the EU.

In order to survive, farmers are now having to strip assets, diversify into forestry and tourism, offer direct sale to the public through farm shops and merge with other farms to form bigger units. It is not surprising that many families with small farms do not see the next generation working as farmers.