By John Knox
In the precarious world of Scottish agriculture, 2010 will go down as a “not bad” year. Official estimates just out show that total income from farming increased last year by 18 per cent in real terms to £618m.
The astonishing thing is that most of that is made up of subsidies from the tax-payer, £597m. Which means that the money we pay in the shops for our food is no where near the cost of production.
The National Farmers Union says: “These figures show that the support farming receives from the European Common Agriculture Policy remains essential for the survival and well being of farm businesses in Scotland.”
Its policy director Scott Walker says the next round of negotiations in Europe must make sure that CAP is properly funded and that the support goes to individual farms to enable them to continue producing home-grown food and preserve the countryside.
The graph of Scottish farm income over the last 30 years looks like the outline of the Himalayas with huge peaks and deep valleys but the long-term trend is inexorably downwards. In 2009, total farm income fell by 15 per cent. There was a big dip in 1998, another dip in 1985 and again in 1980. It’s all a long way from the halcyon days of the early 1970s when total farm income in real terms was over £1.2 billion. Farmers do better in times of inflation.
Even in the good year of 2010, average farm income was down 12 per cent at £34,400. This is the return made by the average farm to the farmer and his family, for their labour, and for the capital invested in the business: seeds, fertiliser, livestock, machinery, land and buildings.
It’s not a lot and the fact that the average is falling when the total is increasing, means many poorer farms are struggling to survive. Not much wonder we saw farmers protesting about the low price of milk just before Christmas. They say they are only getting 25p a litre for their milk, while it is selling in the supermarkets for 62p. Either the big stores are making a huge profit or they are not charging enough for their milk. The cost of production, the farmers say, is 28p a litre. That’s why over 50 dairy farmers left the business last year. There are hardly a thousand left.
Dairy farmers and fruit farmers have suffered the worst in the last year while cereal and livestock farmers have benefited from higher prices and the lower cost of fertilizers.
In farming, there are so many variables - the weather, the global prices of wheat, barley, oats, lamb, beef, milk, fruit, vegetables, fertilizer, oil - none of which the individual farmer has any control over. Yet he or she must sow seed or buy young livestock or invest in new machinery or buildings or fencing or drainage in the hope that there is a profit at the end of the season. And the sums of money involved are huge. A tractor for instance costs around £60,000. These are risks few city-dwellers would be prepared to take. You have to be brought up in a long tradition of faith in the future.
Farmers’ leaders increasingly take a global perspective. In reaction to last week’s UK government’s Foresight report on global food and farming futures, the NFU said: “The reality is that Scottish farmers are already delivering on the report’s central theme of sustainable intensification of farming.” The report talks of the need to feed a world population of 9 billion by 2050 and at the same time to combat climate change. The NFU warns that difficult decisions lie ahead on the “dysfunctional nature of our supply chain” and on the public’s reluctance to embrace new technology such as genetic modification.
I went along to the new Agriculture Centre in Stirling to see a part of the supply chain for myself. In one sale ring, 837 cattle were sold in a rattling chant from the auctioneer and the slightest of nods from farmers leaning against the ringside. And in a second ring, by coincidence I presume, 837 sheep were sold.
To the outsider, it’s all a mystery, numbers like £900 for the cattle and £60 for the sheep flew through the air. Men with prodding sticks guided the leaping animals into and out of the ring from the silver pens behind. Trucks and trailers stood ready to collect the animals at the side of the building later. And farmers in thick jerseys chatted in the bare-walled café and settled their bills at the auctioneer’s counter.
It all seems a world away from the hallowed halls of the supermarkets with their fancy packaging and low prices. Yet the two worlds are in reality one. We push our trolleys full of groceries towards the check-out with hardly a thought for the farmer in his field and the global forces with which he has to contend.
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