VEGA News Item

Is There a Future for the British Farmer? - 18/08/2008
Sustainability and all that
"The credit crunch is putting an end to City expansion into the country as the precarious financial situation has made city slickers rethink their lifestyle priorities," reports Julian Sayers, Spokesman at the Royal Institution of Chartered Surveyors, whose latest market survey has just been published. “Ever-rising commodity prices have pushed the price of farmland to record highs as farmers and investors compete for arable land,” he adds.

Hobby farmers and holders of collections of livestock in sanctuaries or zoos will become increasingly unpopular with commercial farmers and others seizing opportunities to sell up and retire, particularly those feeling the squeeze from the rising costs of fuel, fertilizers, and energy. Cashing in is a serious option for those who are unable to operate at a profit. Extensive systems will be likely to intensify into continuously housed and zero-grazed and feedlot herds and flocks, possibly forced by the spread of viral and bacterial diseases and culls or by the competition of tourism and leisure pursuits.

In the fastest rise in prices since the survey began 13 years ago, the average price of agricultural land rose in the first half of this year from £10,439 to £14,453 per hectare and grazing land from £9,929 to £11,477. Higher values had bred optimism in some farmers to invest after years of underinvestment from quitters. Some non-farmers were acquiring land and some farms were being extended.

The boom for landowners has been caused partly by a growing demand for grain on the global market, driven by the burgeoning economies in China and India, where the middle classes are eating a higher protein diet. In northern Europe factors of quality and quantity see returns on feed wheat similar to prices for milling for bread.

In Britain land is being sought by investment funds and big commercial farmers, but there is also fierce competition from Danish and Irish investors, where prices in their own lands are high. This foreign interest from financial houses is welcomed by the farming industry because they nearly always contract out the business to land managers and workers, which helps to bolster rural economies. However, what with currency and labor costs some British farmers are buying up land and farms in the dispersal of state-run enterprises in the new entrants to the EU.

The quest for productive land has been tempered by a decline in demand from rich lifestyle buyers seeking a country estate (and probably a shoot) as well as an expensive home in a fashionable part of London or the Home Counties. Farmland sales have also grown in both the residential and non-residential markets, the average price for which has been £15,298 per hectare in the first 6 months of this year.

A letter in The Times (12 July 2008) discusses the relevance of draining bogs since the 17th Century in attempts at self-sufficiency in food. The writer refers to the oversupply of some foods, which led to a scheme of set-aside where farmers are paid not to produce food. In the 1960s, 1970s and 1980s considerable sums were spent to encourage farmers to drain land. A scheme had to pass a cost-benefit analysis for grant aid, entailing assessment of the effect on wildlife if loss of habitat was involved. “The odds were stacked against the conservation case for two reasons,” observes Neville Jones of Beaumaris, Anglesey. The benefits included estimated profits that were “artificially enhanced by including the subsidies of the Common Agricultural Policy” and “there was no economic methodology for costing the value of wildlife and intangibles of aesthetics, tourism, downstream ecology and flooding etc, to put in the cost side of the equation.”

The land drainage budget for England and Wales in the early 1980s was about £100m a year, of which about £40m a year was for agricultural land drainage. “By comparison the up to £2m a year over three years to be spent by English Heritage is a modest contribution to a balance between wildlife and agriculture,” concludes Neville Jones.

This year’s cereal crops are now nearing the harvest. They have escaped many of the adverse events farmers are wont to complain about: with luck no floods or droughts will precede the entry of the combines and the crops will come off into the stores with a minimum of fuel used for drying and prevention of rotting and sprouting.

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