Charles Abel • Farming’s Future
Pressures on UK farming are intensifying, as Charles Abel reports Figures correct at time of writing FARMING faces increasingly turbulent times as Putin’s diabolical Ukraine war piles pressure on supply chains still fragile post-pandemic. Combined with swingeing farm support cuts, Brexit-related trade and labour issues, new Government policies, and evolving societal demands the pressure for major farming restructuring is intensifying. As Russian atrocities in Ukraine wreak an awful human toll, trade repercussions have sent farm input costs soaring, placed world food stocks under fresh scrutiny and accelerated moves to deglobalize supply chains, as reported in January (FCJ 292).
Transition pressures intensify “The cost of farming is becoming substantially more expensive” Graham Redman
“Farming continues to go through a period of significant change, with a long-term transition in land use to food production alongside environment, diversification and delivery of public goods” Richard King
06 • The Farmers Club Spring 2022
So whilst many farms made good returns in 2021/22, thanks to stronger post lockdown-driven retail sales, the short, medium and long-term picture is challenging, warns farm business consultancy Andersons. Alongside price spikes, farm incomes, already under pressure from Basic Payment Scheme cuts in England, now face considerable pressure from rising input costs and surging interest rates. The £:€ exchange rate also remains relevant, influencing the cost of imports and value of exports. Earlier this year agricultural inflation at 12% was double the rate of consumer inflation (5.5%). That was before Putin’s military onslaught sent energy costs soaring. By late March, with nitrogen pushing £1000/t, agflation topped 30%, consumer inflation hit a 30-year high 6.2%, and further surges were anticipated. With exports from the farming powerhouses of Ukraine and Russia in jeopardy, and world stocks, especially in China, under pressure, grain prices escalated, piling pressure on livestock farms with a £3040/t hike in feed costs in March alone. In the medium-term BPS cuts will bite even harder, down 50% by 2024 and hitting zero in 2028, in England, with enviroschemes replacing only a proportion of the income lost on most farms, says Andersons. Longer term government policy, in England especially, will continue to focus on changing land use to better meet environmental and climate change goals. “The UK government does not see food self-sufficiency as key goal; it believes food security is better achieved by sourcing from multiple markets, not having all its eggs in one basket,” says Richard King, head of research at Andersons. In any case UK food supply already draws on a land area twice the size of the UK.
