End of the Road for Small Livestock Farms?

Hilly said:

Current system of rewarding folk for owning or renting land is disgusting , as a land owner I sort of like it but as a tax payer its a scandal.

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No, it was the UK's system that screwed you, the continent kept the system of headage so you had to work for the sub and the farmer had the sub . Not the landowner.
Thank the NFU , they screwed you in the long run!

Hilly said:

Will food be more expensive without it ?

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that is a very good question.
Ag prices are very very strong, top hog locally this week made £200, unbelievable. Beef, and culls well up, meat exports started the year 60% down, but are now 30%. Previously this would have made the price drop dramatically, it went up instead. The wholesale/retail committee, are warning of sharp price rises in the autumn, on finished product, so this isn't looking like it's just a quick upset.
Why ? that's the bit l want to know, and how long it will last. One theory suggests the buyers have been using 'global' price to keep domestic price down, but difficult to know how much, and at what price it is. Whether we approve or not, brexit has altered things, those exports might not now be so easy to manipulate, definitely increased costs of importing, which should mean a negative, on our price. Then we have the separation of subsidies, from production, to the environment, it's been apparent for a long time, that processors include that sub, in the price they offer. Whatever we think about the s/mkts, they are not stupid, and will be looking at all signs closely, to achieve their best profit. It may well be domestic product is worth more, to them, than imported, chuck in rising fuel costs, the new 'tiger' economies in the east, we know how china influences the mkts, the 'green credentials' etc. And perhaps a general steady rise may occur. Not that we will see it, as all our suppliers will up their prices, as well. Or, as many suspect, it's just a flash in the pan. Then the ag suppliers will be the losers, having upped their prices, we will be unable to buy them.

le bon paysan said:

No, it was the UK's system that screwed you, the continent kept the system of headache so you had to work for the sub and the farmer had the sub . Not the landowner.
Thank the NFU , they screwed you in the long run!

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We have not had headage for many years average based , we don’t have to do anything much to claim it . Nfu are what they say no f use

Frank-the-Wool said:

Not really as it has enabled food to continue to be produced at a cheap price so the tax payer has indirectly benefitted.
Moving away from subsidy will mean politicians will have little or no control over home production and will pray that the pound stays strong so all those imports will be cheap and plentiful.

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I do not know of any empirical evidence to support your first assertion, (that doesn't mean I disagree, it can't be proved one way or the other), however there is empirical evidence that subsidy is used by allied trades to maintain the price of their goods or services and therefore when and if fully gone there should be adjustment in the cost base of farmers. I don't think we have a clue what the true price of food is, there are just too many factors to have any clarity on the issue.

It could be argued that cheap food is damaging for the nations health, the obesity problem has grown as food prices got cheaper and cheaper. (in real terms). Cheap food allows wastage. You won't see manufacturing jewellers 'wasting' gold or jewels because they are expensive. So let us argue that expensive food wood drive down waste and allow us to also do the environmental things without need of any sub, because this correct. You only value that which is hard won.

Whilst I think the less that politicians have any control over any industry is undoubtedly a good thing I do not think that they will loosen the levers of control they currently have. We are living in a quasi communistic style of democracy where the state interferes morning, night and noon in everything with generally very poor results. Great innovation is driven by the market, airbags, abs, iPhones etc and only time the government drive these things is when they need to buy them from the market (ie weapons technology, emergency vaccines). When they legislate to control they usually manage to create the inverse of what they wanted. Subsidy is a case in point, it was supposed to be an eu program to keep small farmers on the land, the evidence suggests it sped up the growth of the larger farm by assuring income thereby encouraging helping those who are prepared to borrow by removing most of the jeopardy associated with borrowing.

Things will only get better when things have got much worse. History has been forgotten. Lessons will be learnt then and only then. Troubled time ahead.

Peg red tractor wheat price to house prices, and tarrif on mills that don't use it. Sit back, light pipe.

Tim W said:

Rubbish---food prices are set by the international marketplace
The price you get for lamb and the price the punter pays for lamb has nothing to do with govt. subsidy

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That is demonstrably incorrect. Any subsidy to producer has an effect on the cost base of the producer and therefore an interaction with suppliers and customers. If it were not so governments would not do it. It is fair to say that the effect of the subsidy will vary according underlying market conditions.

An environmental payment is a subsidy, Hilly you are playing semantics saying that it is not. It is no coincidence that the term 'subsidy' went when the political cost of the word became to high so it was repackaged in terms that could be 'sold' to the public by making politicians look virtuous by appearing to care for the environment.

Hilly said:

Subsidy is not for cheap food , it’s an environmental payment when will this ever sink in ? Unbelievable .

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Technically you're correct, when headage payments were on the go you could say that it made food cheaper as we could produce it at less than the cost of production. Then we went to the single payment which if we wished would pay us to do nothing, but farmers being farmers we decided to continue as we were and prop up our farms with it.
Going forward, those of us who join the ELMS schemes will probably do exactly the same again so indirectly we are still subsidising cheap food as if we all stop producing it would undoubtedly become more expensive.

Raider112 said:

Technically you're correct, when headage payments were on the go you could say that it made food cheaper as we could produce it at less than the cost of production. Then we went to the single payment which if we wished would pay us to do nothing, but farmers being farmers we decided to continue as we were and prop up our farms with it.
Going forward, those of us who join the ELMS schemes will probably do exactly the same again so indirectly we are still subsidising cheap food as if we all stop producing it would undoubtedly become more expensive.

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I agree, we produce food at our own risk , infact it risks the payment producing it .

JP1 said:

I shall keep going for 20 more years so I can leave something of a legacy for Freddie IF he wants it. Folks in the village see me and my stock for the passion it is

I plan to enjoy the journey even if fewer and fewer folks can see what I see and delight in

In the big scheme of things I fear more for what my fellow villagers have to put up with things like centralising health care and web based "customer services" rather than human. There's a massive culture of Gov and big business having fortress systems holding the bosses unaccountable whilst forcing ordinary folk in to monopolistic supply situations

I still say it starts with politicians, Their only output is legislation. From parish Council to General elections we need a "non-of-the-above" option so we can spend 10 years of infighting forcing out the old order and getting politicians with a spine, accountable and listening to us not their party whips. Ideal post Brexit to do that now. Cummings for election reform Tsar !

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I hear what you say Tolstoy , not sure about comrade Cummings though.

ski said:

That is demonstrably incorrect. Any subsidy to producer has an effect on the cost base of the producer and therefore an interaction with suppliers and customers. If it were not so governments would not do it. It is fair to say that the effect of the subsidy will vary according underlying market conditions.

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I disagree
The removal of BPS to a landowner/farmer will not effect how much Sainsburys (for example) have to pay for lamb
They will pay the market price ---& they buy in an international market
It will mean that those producers who have relied on BPS to prop up poor businesses will have choices to make , either
1) to up their game
2) take the govt. ''green shilling'' (if it's worth it)
3) Reinvest their assets elsewhere

I fear for that for many this is only just beginning to sink in & others have yet to realise the reality

Tim W said:

I disagree
The removal of BPS to a landowner/farmer will not effect how much Sainsburys (for example) have to pay for lamb
They will pay the market price ---& they buy in an international market
It will mean that those producers who have relied on BPS to prop up poor businesses will have choices to make , either
1) to up their game
2) take the govt. ''green shilling'' (if it's worth it)
3) Reinvest their assets elsewhere

I fear for that for many this is only just beginning to sink in & others have yet to realise the reality

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Yes, the supermarkets pay the market price. But do you not think BPS has kept more producers in the game, producing more stock and so keeping the price down? It must have some sort of effect!

Hilly said:

We have not had headage for many years average based , we don’t have to do anything much to claim it . Nfu are what they say no f use

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I don't think the NFU caused abandoned headage payments. They and Scot Gov tried to put more onto headage to keep suckler numbers up to a critical mass but could only do it via the beef calf scheme ( and ewe Hogg scheme) but EU rules did not allow more to be transferred from the area based scheme and Englandshire saw it as anti-competitive.
That was my understanding of the situation.

I see subsidy as a way we can compete on world prices and keep people farming. I see it as mainly a social support as it means thousands of jobs supporting farming can survive in rural towns and villages. I have just counted 25 companies which our modest operation pays every year. They are actually surviving on grass as that is the basis for all our income. Without those efficient cash converters -livestock - the grass would support no jobs.

puppet said:

I don't think the NFU caused abandoned headage payments. They and Scot Gov tried to put more onto headage to keep suckler numbers up to a critical mass but could only do it via the beef calf scheme ( and ewe Hogg scheme) but EU rules did not allow more to be transferred from the area based scheme and Englandshire saw it as anti-competitive.
That was my understanding of the situation.

I see subsidy as a way we can compete on world prices and keep people farming. I see it as mainly a social support as it means thousands of jobs supporting farming can survive in rural towns and villages. I have just counted 25 companies which our modest operation pays every year. They are actually surviving on grass as that is the basis for all our income. Without those efficient cash converters -livestock - the grass would support no jobs.

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I agree.

Bossfarmer said:

its allowed small guys to stay in the game though, they havent needed to get bigger as theyve had the cheque each december, now without that they will have to get bigger or get out, yes many smaller farmers have given up the last 30 years but they havent all been financially forced out many have kids that arent interested or no kids at all

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Obviously not every one can get bigger! My bank manager on one of his yearly visits, now long surpassed by a call Centre somewhere, told me how Genus consultants had told every one of his dairy customers, that they should buy quota and get bigger, his take, what stupid advise in a controlled market, just the same as consultants telling everyone stupid enough to listen that you should rent more acres and spread your costs, oh and by the way you'll need a new combine !

ski said:

That is demonstrably incorrect. Any subsidy to producer has an effect on the cost base of the producer and therefore an interaction with suppliers and customers. If it were not so governments would not do it. It is fair to say that the effect of the subsidy will vary according underlying market conditions.

An environmental payment is a subsidy, Hilly you are playing semantics saying that it is not. It is no coincidence that the term 'subsidy' went when the political cost of the word became to high so it was repackaged in terms that could be 'sold' to the public by making politicians look virtuous by appearing to care for the environment.

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i think you will find that hes got a bit of a thing about it because he doesnt get any.

probably he doesn't have any hedges permanent fences or infrastructure upkeep costs to pay for either.

Hilly said:

We have not had headage for many years average based , we don’t have to do anything much to claim it . Nfu are what they say no f use

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My point, exactly.

le bon paysan said:

My point, exactly.

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Life under headgae was crap compared to sfp and bps , I wouldn’t want to go back to headage .

Woolless said:

Yes, the supermarkets pay the market price. But do you not think BPS has kept more producers in the game, producing more stock and so keeping the price down? It must have some sort of effect!

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If production falls then the price will rise

Hilly said:

Life under headgae was crap compared to sfp and bps , I wouldn’t want to go back to headage .

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Yep folk farming the payment not the animal

Tim W said:

Rubbish---food prices are set by the international marketplace
The price you get for lamb and the price the punter pays for lamb has nothing to do with govt. subsidy

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True. However, whether a farm is viable or not, that is whether it makes a profit and provides a living to the business owner, often depends on the subsidy. Some may be able to farm without it but official statistics show that most beef and sheep farms make less profit than they receive in subsidy in most years.