MP Anne McKintosh on the ‘new CAP’

3 02 2014

anne mcintosh2 mpAs MP Anne McKintosh, who chairs the environment, food and rural affairs select committee, leaves her political future to be decided by her constituents, we look at her article on EU reforms in the Yorkshire Post earlier this month.

EXTRACTS

As I travel around my constituency, everywhere I look I see the valuable contribution farming makes to our area.

From the sheep on the hills and the calves being fattened in the Vale of York, to the auction marts in Thirsk and Malton, agriculture plays a key role in our rural economy.

This is what we do and do well in North Yorkshire. Our livestock production ensures a safe and secure source of food while providing jobs and income on the hill farms. It is crucial that the policy-makers in Westminster make sure agriculture receives the support it requires . . .

eu food rural affairs header

It is unfortunate, however, that the flexibility afforded to Member States to implement the new CAP does not extend to offering green measures that are an alternative to the impractical crop diversification. The Government must urge the European Commission to reconsider this measure at the earliest opportunity. The decision on what crops to grow must be one for the farmer and dictated by the market not by some arbitrary rule from Brussels.

The reforms also include an active farmer test. The Government must use the active farmer test to make sure that any EU subsidy goes only to people who actually and actively run a farm business, shoulder entrepreneurial risk and are in day-to-day management control of the land they farm.

It is disappointing that the Government wishes to reduce by initially 12% the amount of money that could be available to our farmers.

This is the rate at which the Government wants to transfer funds from the budget which provides direct support to farmers and into the budget for rural development.

Compare this rate with Italy which will not transfer out any funds and France which will transfer just 2%.

Also, the rate in Scotland will be 9.5% and that poses a clear discrepancy between North Yorkshire farmers and their Scottish counterparts.

A larger direct payment budget means farmers can invest more in their operations allowing them to increase their productivity and resilience. Cutting payments to farmers may leave them more vulnerable to shocks such as poor weather and price volatility. I am sure we all remember the heavy snowfall of last winter and its dire consequences for hill farmers . . .

English agriculture has faced many challenges over the last decade from outbreaks of devastating animal diseases, falling farm-gate prices and rising input costs, to the vagaries of weather that has delivered drought, flooding and heavy snowfall. English farmers number among the proudest workers of any industry. It is clear that they would rather do without CAP payments, but the simple truth is that most would not be able to survive constant shocks without them . . .

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See her full article: http://www.yorkshirepost.co.uk/news/debate/columnists/anne-mcintosh-eu-reforms-must-work-to-benefit-uk-farmers-1-6358943, and the Overview of the CAP reform 2014-2020

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Fair trading between British farmers and producers: CPRE

23 01 2014

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The Council for the Preservation of Rural England reports:

cpre logoUnsurprisingly given ongoing concerns about fair prices for farmers, and the recent creation of a ‘supermarket ombudsman’, supermarkets addressed this issue most comprehensively in their responses.

Nearly all of them stated a commitment to support British farming, and some use cost of production business models to agree prices with the farmers they trade with..

Call to implement more cost of production business models

Fluctuating prices make it difficult for farmers to plan the future of their businesses which can hinder investment or changes to production methods that can benefit the environment and make their businesses more economically viable.

Those supermarkets that are still being criticised by farming organisations for not doing enough to support dairy farmers should make this a priority.

Supermarkets should avoid a race to the bottom on price. The recent horsemeat scandal has demonstrated that the pursuit of ever cheaper food can have dire consequences for food quality and consumer confidence in provenance.

We would like the supermarkets to make even more progress on this issue, by implementing more cost of production business models to help smooth out the volatility of the market in food.





Emma, in her twenties: current systems are clearly failing

22 12 2013

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Emma Brice, now 26 years old, grew up on a dairy farm in East Devon:

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emma brice dairy farmers daughterThere were four farms on our lane alone, but all of these have now gone, my father’s was the last to close in 2000. They all closed due to constraints on milk prices and I saw the very real consequences these external influences have on people and their livelihoods, their heritage.

Since, I have always hoped that there is another, better way to live and make a living by farming for future generations….

My grandparents and great grandparents before us had worked this farm but when I was 14 there were no longer cows in the field outside my bedroom window, nor did the hum of the dairy start at 5am as it had every morning.

The year 1999 marked the ‘worst trading crisis since the 1930s for UK farmers as the milk cooperative, then ‘Milk Marque’, was split after an investigation by the Competition Commission. The report found that its monopoly position and price discrimination was operating ‘against the public interest’.

My father’s farm stopped producing milk and the Friesians were sold in April 2000, just in time for the foot-and-mouth epidemic of 2001. The farm was the last of three to cease milk production in our lane alone; the continued falling of milk prices had brought about the end of dairy farming in the area.

My father became a gardener, learning as he went along, to provide better support for his family and three children. His resilience is something that I have always been proud of, and perhaps a quality bred into farmers and those who work so closely with the ebb and flow of nature . . . honourable livelihoods that provide real benefits in so many ways to the local area . . ..

Current systems are clearly failing, and require considerable subsidies. We cannot live as we are without agriculture and I hope many come to understand this and in turn see land, not as a means to an end, but as an end in itself.

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Rickard rides again

27 11 2013

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Corporate-funded bean-counters and their political allies – more concerned with the production of balance sheets than food – are hoping to ‘reform’ the Common Agricultural Policy which takes 40% of the EU budget and distributes £3.1 billion a year to the UK’s farmers and rural economies.

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defra header

A DEFRA consultation is now underway, ending on Thursday 28th November. DEFRA ministers and environmental organisations are calling for the current 9% in modulation to be increased to 15% – switched from food production to expand rural development and agri-environment schemes in England.

Some European governments have decided to do the opposite and NFU president Peter Kendall advocates an even administration of funds, creating a level playing field for food producers..

Significantly he also called for the creation of conditions so that farmers can earn a fair income from ‘the market’.

Kendall added that, to date, payments assisting rural development had been spent in questionable ways, including the provision of pantomime costumes for an amateur dramatic society.

sean rickardSean Rickard, who controversially describes himself as a respected independent economist, – witness the lavish praises of his students made available on Google images – advocates a ‘dedicated’ environmental and rural development policy – good for the tourism industry.

He spoke about ‘wasting money on farming’ adding that a third of farmers would not survive but for CAP payments – which he said were propping up the inefficient. His approval is reserved for the efficient who produce food on a large scale. Minister George Eustice added that CAP should ‘deliver’ a competitive agriculture – no doubt competing to supply overseas markets and delight commodity speculators..

Elephants in the room & false accounting

No reference was seen to the role of the supermarkets and profits made, often at the expense of primary producers.

And little has been heard from the new adjudicator, who explained recently, in the Farmers Weekly, that she will ‘tread carefully’, adopting a softly, softly approach.

In belittling the small percentage farming directly contributes to GDP, it totally failed to recognise the huge network of suppliers and other services who depend on the custom of the farming sector..

A food security issue

In Farming Today This Week, Charlotte Smith asked if we should just do away with CAP payments altogether and force farmers to stand on their own two feet? Another rhetorical question asked why the farming sector expected support when no other industry did.

david hortonDavid Horton, a Devon dairy farmer, explained that the Single Farm Payment is a safety net keeping food production going despite unforeseen circumstances beyond control, such as severe weather and disease (his cattle were badly affected by Schmallenberg disease earlier this year). It ensures that food production will continue year after year – and is vital to food security..

We add that farming is not just another sector of industry but the all-important sector whose products are essential to survival.

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HRH: many farmers have dramatically fluctuating incomes, while retailers reap substantial profits from these ‘squeezed suppliers’

13 11 2013

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Prince charles farmerPrince Charles regards farming as backbone of rural life and the future of British food and farming is one of the three areas promoted by Business in the Community’s Rural Action Programme.

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He is responsible for launching various initiatives to help farmers, particularly struggling hill farmers to market their produce more effectively. The Prince’s Farmers Marketing Initiatives include Peak Choice, Dartmoor Farmers, the Cambrian Mountain initiative and the North Highland Initiative.  Business in the Community is currently working with partners on a programme to attract young people into the agricultural industry.

The Prince of Wales has spoken out against the big retailers and expressed fears for the farming community who supply them, as guest editor of a special edition of Country Life:

“It cannot be right that a typical hill farmer earns just £12,500, with some surviving on as little as £8,000 a year, whilst the big retailers and their shareholders do so much better out of the deal, having taken none of the risk of dealing with the roller-coaster economics of food production”.

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Small farmers take the biggest risks and receive the least return

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His editorial defends the work of farmers as guardians of rural Britain and argues that plummeting incomes are depriving farmers of the ability to invest long-term in their land, thereby storing up problems for sustainable domestic food production.

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He said producers were, in effect, being “penalised” for choosing their way of life, adding: “Small farmers find themselves in the iniquitous position of taking the biggest risk, often acting as the buffer from the retailer against all the economic uncertainties of producing food, but receiving the least return”.

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Read more about hill farming from Hilary Wilson and Suzanne Greenhill:
http://fairdealfooduk.wordpress.com/3-articles/hill-farming-hilary-wilson/
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 Prince charles video hill farming
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See the video here: http://news.sky.com/story/1167759/prince-charles-backs-farmers-in-country-life
 
Another source:http://www.princeofwales.gov.uk/the-prince-of-wales/promoting-and-protecting/rural-communities-and-farming

And in due course some content may be accessed here: http://www.countrylife.co.uk/

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Should UK farming ‘adapt to price volatility’ – or seek a fair price in a ‘real market’?

28 10 2013

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sion robertsFormer commodity trader Sion Roberts who then gave economic advice to the Cabinet Office, is now senior partner at European Food and Farming Partnerships.

At a Morrisons’ hosted Farm Open Day and Agricultural Briefing he is reported to have advised farmers to play the speculators’ game, rather than engage in open and honest trading.

During his address Mr Roberts highlighted how price volatility in the food sector had grown in the last few years. Morrisons’ head of agriculture David Evans said that changes would ‘breed instability’ in the industry in the next five to ten years.“With the end of milk quotas looming, price instability will become even greater”.

Mr Roberts claimed some farmers are turning to the futures market as one means to lock in prices; futures contracts are also traded across the dairy and poultry sector in other countries, adding:

“Speculation is important to provide liquidity and it allows people to hedge risks up and down the chain.”

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European moves against food speculators

However, EU decision makers recently met to agree new rules on food speculation, but the Financial Times reports that regulation designed to curb speculation in commodities is at risk of being watered down, triggering concern in some quarters that food-price volatility will remain at dangerously high levels.

Reuters reports that in Switzerland the Young Socialist Party has collected enough signatures to merit a referendum curbing food speculation; the proposal is formulated to affect companies with a subsidiary in Switzerland, even if their headquarters are elsewhere.

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“We’re concerned that prices are moving based on factors that have nothing to do with the real market,” said David Roth, its head.

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See a summarised history of futures markets, now affected by deregulation here

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FFA lobbies Stormont for a bill on farmgate prices: cost of production as a minimum, plus inflation-linked margin

22 10 2013

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William Taylor (Farmers for Action, Northern Ireland) writes:.

Speaking at Westminster

Speaking at Westminster

Due to two decades of increasing financial pressure on farmgate prices from corporate food retailers, food wholesalers, processors and others, agriculture, the backbone industry of Northern Ireland, is currently functioning with one arm tied behind its back.

Northern Ireland farmers and rural traders are short of finance; staff and farmer numbers are contracting alarmingly.

Farmers for Action has begun a campaign to drum up support for the Agriculture Committee at Stormont to put forward a bill for legislation on farmgate prices so that farmers would receive a minimum of the cost of production plus a margin inflation linked for their produce.  If the free market rises then they would receive more for their produce, but when it falls the safety net would always kick in..

Brussels in 2010 acknowledged that food security is top of the agenda and that food producers need a financial safety net.

  • This legislation would force the corporates to lower their profits by being forced to pay farmers fairly for their produce whilst still leaving then to compete with each other;
  • Therefore consumers would not have to pay any more for their food other than normal inflationary increases;
  • Long term this would ensure food security by ensuring farm viability and therefore avoiding expensive imports of food that Britain is quite capable of producing. .

nothern irelandA whole range of jobs would be created due to this legislation, many of which would be highly skilled professional productive jobs on farms, on average In Northern Ireland one job per farm, making 45,000 in all.

.A further 15,000 jobs could come from the food industry within seven years, not to mention knock-on jobs and there would be many.  Profitable farmers buy on average from 123 different suppliers of all types, from tags, concrete, veterinary products, to fertilizer, machinery, stationary, computer systems and so on..

Many farmers, their spouses and family members work in cities and towns. If agriculture became profitable due to the proposed legislation many would relinquish their jobs and go back to full time farming – in turn freeing up jobs in towns and cities..

William ends persuasively: “US President Roosevelt could not get the United States out of recession in the 30s until he put money in farmers’ pockets”.

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A fair deal for sheep farmers?

14 10 2013

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Exporters and other middlemen profit as UK & NZ farmers are underpaid

 cumbrian sheep farmersPicture from Cumbrian Commoners’ website

So often the BBC appears to be underpinning government trade policy – now Farming Today extols their export drive, sending Charlotte Smith to visit a cutting plant which handles over 20,000 lambs per week, meeting the export manager who divides his time between the factory, and trade stands across the world.

Meanwhile, we note that Britain imported 86,100 tonnes product weight of sheep meat in 2012.

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Depressed prices

In April, Chief executive of the National Sheep Association (NSA) Phil Stocker records that the timings of NZ imports of legs and loins “caused a massive disruption in our domestic market”.

Head of trade development at Eblex Peter Hardwick told MeatInfo.co.uk that lamb from NZ had played a significant role on depressing the price of UK lamb “right through until the late autumn”. He said that they are importing lamb legs at a lower price and at a promotional time of the year. NZ January imports were up 77% and unit values 25% cheaper, 35% higher in volume than 2011 levels and 20% below 2011 levels in price – “a massive increase”.

As low prices dismay sheep farmers, they are told to ‘market them correctly’, by EBLEX; Welsh hill farmers point out that the price per kilo for lightweight and super-lightweight lambs has been well below the average price for lambs with higher weights that reach supermarket specification.

 

New Zealand sheep farmers are also suffering from poor prices

 NZ sheep.

Hardwick thinks that NZ sold ‘unnecessarily weakly’ into the UK market, at levels that didn’t even give their farmers adequate returns.

Beef + Lamb New Zealand’s chairman Mike Petersen agrees, drawing attention to the struggle NZ farmers had been facing. He said sheep farmers in his country, such as those here in the UK, were also struggling with “unsustainable returns for lamb”,

 

As the export manager sells his Welsh lamb to Canada, Singapore, Ghana and France, production in Britain and New Zealand is undermined by the EXIM roundabout which underpays British and New Zealand farmers who make it all possible.

 

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Questions sent to Morrisons by a dairy farmer this week

20 09 2013

 

While Morrisons receive substantial income from customer milk purchases, a disproportionate amount disappears before it reaches the prime producer.

 

  • Does this mean that Morrisons are not paying a fair price to their supplying processors?
  • Or that those processors are not passing a fair share of the income back to farmers?

 

Would you please let me know where exactly this money is likely to be disappearing after your have received it from your customers?

 

A search for truth as supermarkets point the finger at processors and – in turn – processors point the finger at supermarkets.

 

 





FFA sparks grain contract debate

4 09 2013

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wheat spoiled 2012Paul Spackman asked, in the ‘challenging’ year of 2012 pictured opposite, “What rights and obligations do growers have if crops don’t meet contract specification?”

Olivia Midgley in the Farmers Guardian reported in August that Farmers For Action is urging growers to ‘read the small print’ when signing grain contracts. They said that many contracts had been falling short of ‘fair trading’, with some farmers receiving excessive charges with no warning.

Arbitrator Philip Noyce explained that if grain of sufficient quality is not produced when called for, the buyer may buy in grain of that quality to make up the shortfall and charge the farmer for any difference in cost between the contract and market price. The seller could opt to buy in grain to meet his contract obligations and avoid a damages claim, although he might be liable for any additional haulage costs.

FFA called on the Agricultural Industries Confederation (AIC),which sets the basic grain and pulses contract, to make the system fairer.

South East of England representative Bruce Horn said that there should be farmer representation on the AIC board in addition to the affiliated merchants and trader members.

wheat farmer 2012In the rain-sodden year of 2012 Somerset arable farmer Richard Payne said, “If it’s one year, we can just about get out of it, but beyond that we are facing serious problems. It will become increasingly hard to continue at all.

“For supermarkets, food prices must be kept down, at all costs, for the consumer. But because farming is such a long cycle there is little account taken of retrospective costs for the producer.

“I used to be in beef, but we were screwed to the floor by retailers. It didn’t matter what costs you had, they didn’t care. I had to get out of it”.

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FFA asks any farmer with suggestions or support for achieving a fairer contract to contact David Handley, 07711194947 or Bruce Horn, 07966674846.  They want farmers to tell them their own personal experience of selling grain in 2012 to enable them to put forward a strong case to bring about beneficial change.

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