March 2022

By Marianne Hitchen

British farming is in decline. This is nothing new: British farming has been in decline since records began in the mid-1800s. But the scale of this decline is new, as illustrated by some shocking statistics. Farm income has fallen by over 50% in the last five years alone (BBC Panorama). In the last two years, one third of the UK’s 150,000 farmers have quit the industry. What is going on?

When Britain left the European Union (EU), and with it the Common Agricultural Policy (CAP), many hoped this could signal a fresh start for British agriculture. CAP was a poor deal for British farmers from the time of joining in 1973. EU spending on the UK was only £4 billion in 2018, while the UK paid £13 billion into the EU budget in the same year. Even the pro-EU Economist (26/11/20) said that Britain should be able to come up with better farming policies outside the EU; indeed, farmers could “not do worse”.

Four years ago, less than 1% of the UK’s working population was employed in agriculture, and this figure continues to decline. Around 60% of the total workforce on farms was accounted for by farm owners themselves and those with whom they had an immediate family or business relationship. A further 20% were regularly employed farm labourers, and around 15% were casual and seasonal workers. This picture is already changing, with a rapid decline in the numbers of regularly employed farm labourers in particular.

From the quantity of TV programmes about young, successful smallholders selling niche products from rare breeds of sheep and pigs, one might think the farming sector is flourishing. The reality is that such enterprises are a tiny fraction of agriculture as a whole. They rely on significant financial investment and on working all hours of the day, whilst being uncertain of security or success. The familiar picture of small dairy, beef and sheep farms passed on from parent to child, is already out of date and the decline has not been halted by leaving the EU. Why is this?

AGRICULTURE TRANSITION PLAN

British farmers are facing huge changes in the support they receive from government, and these do not bode well for smaller businesses. Last year marked the start of a seven-year transition away from the EU’s Common Agricultural Policy. Each of the UK’s devolved governments will enact new agricultural policies, although they are unlikely to be fully implemented before 2025. Meanwhile as the National Farmers’ Union (NFU) notes, the government’s Department for Rural Affairs (Defra) will reduce and then stop all direct payments, i.e. subsidies, to farmers by 2027. Defra “plans to invest money freed up by stopping direct payments to support agriculture in different ways”.

EU subsidies are to be replaced by a number of schemes and funds, that farmers have to apply for. This process will favour larger concerns at the expense of smaller ones. Some of these schemes come under the heading of Environmental Land Management, such as the Sustainable Farming Incentive, Local Nature Recovery and Landscape Recovery. Farmers will be required to achieve a number of targets in these areas, to receive funding. They can also apply for grants from, among others, the New Entrants’ Scheme, the Slurry Investment Scheme, the Future Farm Resilience Fund, plus a lump sum exit scheme for farmers wishing to leave the industry. It is this last scheme that many struggling farmers are taking advantage of, and which will see British agriculture concentrated in fewer and fewer hands. In the meantime, the NFU projects that livestock farmers will lose between 60%-80% of their income by 2024 as a result of direct payment reductions.

RESPONSE FROM FARMERS

Farmers are generally considered to be conservative in outlook, yet the NFU has been increasingly vocal in speaking out against the changes. “Expecting farmers to run viable, high-cost farm businesses, continue to produce food and increase their environmental delivery, whilst phasing out existing support and without a complete replacement scheme for almost three years is high risk and a very big ask…There are also many uncertainties during this policy transition, not least the new trading arrangements after we leave the transition period, recovery from Covid 19, and the global challenge of climate change…Moreover, the long-running price war in UK retail often sees farming and growing caught in the crossfire.” (Minette Batters, NFU President).

The NFU has been asking Defra to provide an assessment of the economic impact of the Agricultural Transition Plan for the last four years, and is still waiting. It has called on ministers to “address abuses of market power”, and “be mindful of the impact sudden drops in income could have, including seriously jeopardising the viability of farm businesses, and the knock-on impacts for domestic food production”.

Farmers are contending with a string of problems, including the post-pandemic labour shortage, which has already resulted in unpicked produce rotting in fields, and a cull of healthy pigs on farms. This is before British agriculture has felt the impact of new trade deals with the major food producing nations of Australia and New Zealand. The NFU says that these are really bad deals for the UK, as all tariffs and quotas on imports of Australian beef and lamb will be removed after the initial phasing-in period. British farmers are being abandoned to the cut-throat world of market forces in other words, without any of the previous checks and balances and with potentially catastrophic consequences.

All this makes a mockery of any talk of sustainability and self-sufficiency. As Minette Batters has noted, “What is decided now will decide our levels of self-sufficiency”. Improvements were starting to be made in this area, with UK domestic production meeting 60% of our food needs recently, compared with only 30% in 1947. How can trends in self-sufficiency, eco-friendly measures and sustainability be maintained at the same time as the imperatives of neo-liberalism? What will be the effects of these changes on the British countryside? Minette Batters again, “Agriculture underpins the entire rural economy. In some…parts of the country, if you didn’t have agriculture, the village schools, the local community, the allied trades, the local vet…are all put at risk.”

Cows on farm in Yorkshire photo by RF Vila

How can trends in self-sufficiency, eco-friendly measures and sustainability be maintained at the same time as the imperatives of neo-liberalism? What will be the effects of these changes on the British countryside?