Farming without subsidies

[brigadoon]

What do you do about high hill land . It's not viable without sub , farmers would have to pack up and leave as the only option would be to plant it with trees

Then get the spade out

 

[ollie989898]

You can look at it all ways.
The Landowner will want to "maximise "their assets respectful of "sustainable level" or not.

Absolutely he will, I don't doubt that for one second and did not mean to suggest they wouldn't.

HOWEVER, if tenants are now operating only with the mindset 'can I make a shilling (or save a shilling) out of renting this land?' they will naturally be a lot less keen to pay rents they feel are disproportionate to the value of any profit they can achieve from farming it- with nobody getting funny money as a side order, everyone will be doing their sums carefully, or they will be going out in due course.

A landlord can ask for whatever he likes, but land is only worth in rental what someone is prepared to pay for it and I reckon with subdivides going land that isn't reliable will be the first to be dropped.

Alternatively a horde of extensive mob grazing cattle ranchers might enter the fray and be bidding themselves in a warzone, I have no idea.

 

[rob1]

What happened in New Zealand when subsidies were removed was that 10% of farmers went out of business but 90% of their suppliers went bust. The farming industry over there went through a very tough time for a lot of years ,why you would wish this on yourself and your fellow farmers is beyond me.

Perhaps someone should ask NZ farmers if they would like subs to return, no gain without pain

 

[Tim W]

why you would wish this on yourself and your fellow farmers is beyond me.

It's not really a question of wishing it on anyone
It's more a matter of facing reality
The taxpayer wants better value for money
If we want their shilling we have to deliver ---prob. by giving what they don't have

 

[ollie989898]

What happened in New Zealand when subsidies were removed was that 10% of farmers went out of business but 90% of their suppliers went bust. The farming industry over there went through a very tough time for a lot of years ,why you would wish this on yourself and your fellow farmers is beyond me.

Of all the farmers you know, can you think of 10% who are probably going to exit the industry within the next 10 years anyway, for whatever reason?

There will be people who benefit from the opportunities that a loss of subsidy presents, maybe a new generation of young and innovative farmers who have never known about the game where you get £200 for passing go automatically every year. Never doubt the ingenuity of human nature. There are already people out there farming without the use of subsidies so it can be done. We might not like how they do it because it seems alien to us but that is tough. Maybe all this time the thinking we have clung to is in fact the wrong sort?

 

[rob1]

Absolutely he will, I don't doubt that for one second and did not mean to suggest they wouldn't.

HOWEVER, if tenants are now operating only with the mindset 'can I make a shilling (or save a shilling) out of renting this land?' they will naturally be a lot less keen to pay rents they feel are disproportionate to the value of any profit they can achieve from farming it- with nobody getting funny money as a side order, everyone will be doing their sums carefully, or they will be going out in due course.

A landlord can ask for whatever he likes, but land is only worth in rental what someone is prepared to pay for it and I reckon with subdivides going land that isn't reliable will be the first to be dropped.

Alternatively a horde of extensive mob grazing cattle ranchers might enter the fray and be bidding themselves in a warzone, I have no idea.

Plenty of (good)land in the 30's was farmed rent free to keep it in good condition so it is possible that some landowners even these days will realise that its better farmed than not, £20 an acre is far better than nothing

 

[Hilly]

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It's not really a question of wishing it on anyone
It's more a matter of facing reality
The taxpayer wants better value for money
If we want their shilling we have to deliver ---prob. by giving what they don't have

I wonder how the public feel about forestry subs ?

 

[Tim W]

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I wonder how the public feel about forestry subs ?

Don't know----this MOP thinks they are a bad thing on principle

 

[ollie989898]

Plenty of (good)land in the 30's was farmed rent free to keep it in good condition so it is possible that some landowners even these days will realise that its better farmed than not, £20 an acre is far better than nothing

I cannot say what the absolute bottom of the market will be, I am nothing like old enough or wise enough to know the raw numbers. My gut feel around here (Somerset) is that the dairy boys will be willing to pay £100-150/acre for land just to grow maize because they are doing that already and subsidy does not come into it. Land you can't plough mind, different ball game, I know people who have basically been given it for peppercorn because the owner knows they will farm it properly.

 

[Hilly]

Lots of chat about when subs go trees come, trees only come with vast subs what happens to forestry subs because without them their wont be any tree planting.

 

[Farma Parma]

The point Clive is making is that rents will have to sit at a level that is sustainable for the tenant, or they won't take on the rent in the first place, why would they? The rental market for land will thus be entirely determined by what the earning potential of that land, or what the range of prospective tenants believe it is, not distorting it with EU funny money and all that entails. A simple sales-costs= profit calculation that a lot of people are capable of doing although some still seem to struggle with calculators I admit.

In areas where there is high demand for rented land, the rents will remain high. In areas where no one wants it or if the land is problematic and won't grow wheat well, rents will drop. In reality it t'was ever thus, only the curtain of funny money obscures this.

Funny Money as your calling it has pushed our farm rents up & all the inputs along with it.
Its gonna take more than my rent vanishing to make this farm stackup once the full subs have gone.
IE the input sharks are gonna take a hit also, then were on a level playing field.

 

[Cowabunga]

I don't know why there is such a bother about subsidies. Yes, some enterprises will not be viable at current prices without subsidy, but the bigger threat by far is the free flow of cheap imports being allowed plus the very real probability after a hard brexit of at least 10% and up to 45% tariffs on our exports to the EU and other places.

Its all very well being and arable farmer and scoffing about farming without subsidies no bother. It is quite another thing if you are a livestock farmer, no matter whether its birds, beef, sheep or dairy. Export tariffs and non tariff barriers plus the promised cheap food imports will kill the livestock sector and Michael Gove has promised as much in the last couple of days. For 'a new agricultural revolution', read more accurately as 'the complete devastation and dismantling of family farms'.

 

[Hilly]

Don't know----this MOP thinks they are a bad thing on principle

Forestry dosent work at all without sub, farming has a fighting chance be tough no doubt forestry has no hope in hell.

 

[spin cycle]

Not quite accurate, efficiency has increased by more than a third, debt has increased by more than a third, regulations are exceptionally high, as an exporter to various countries around the world they have to be.

last i heard there was concern in your dairy sector about upcoming environmental regulations...thats gonna cost money and once bill 62-1 is passed are the banks going lend for capital upgrades

i'm not anti-kiwi and i feel for you guys.....but holding up nz as an example of farming without subs is wrong IMO

 

[Top Tip.]

The point Clive is making is that rents will have to sit at a level that is sustainable for the tenant, or they won't take on the rent in the first place, why would they? The rental market for land will thus be entirely determined by what the earning potential of that land, or what the range of prospective tenants believe it is, not distorting it with EU funny money and all that entails. A simple sales-costs= profit calculation that a lot of people are capable of doing although some still seem to struggle with calculators I admit.

In areas where there is high demand for rented land, the rents will remain high. In areas where no one wants it or if the land is problematic and won't grow wheat well, rents will drop. In reality it t'was ever thus, only the curtain of funny money obscures this.

In what way does the sub distort the rent ? Surely it is just factored into the equation the same as it would be if there was no sub,take the sub away and the the rent will be just as big a proportion of your costs maybe in some cases a bigger %.This argument that costs will drop if subs are removed is just plain ridiculous,I have even had people suggest to me that the price of fert and machinery will drop well all I will say to that is look at the price of tractors in NZ.

 

[Bury the Trash]

It's not really a question of wishing it on anyone
It's more a matter of facing reality
The taxpayer wants better value for money
If we want their shilling we have to deliver ---prob. by giving what they don't have

do they actually know what they get for their money? maybe better education is necessary

 

[Cowabunga]

Of all the farmers you know, can you think of 10% who are probably going to exit the industry within the next 10 years anyway, for whatever reason?

There will be people who benefit from the opportunities that a loss of subsidy presents, maybe a new generation of young and innovative farmers who have never known about the game where you get £200 for passing go automatically every year. Never doubt the ingenuity of human nature. There are already people out there farming without the use of subsidies so it can be done. We might not like how they do it because it seems alien to us but that is tough. Maybe all this time the thinking we have clung to is in fact the wrong sort?

You are quite correct that the least intelligent will struggle on in poverty until every last penny they and their families have earned over generation is flushed down the the drain. If the job is not viable and undermined by a cheap imported food policy, then give up producing food before it bleeds you dry.

 

[brigadoon]

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I wonder how the public feel about forestry subs ?

Well actually ...........................No better not[/QUOTE]

 

[Hilly]

Then get the spade out

Thats all very well but the planting spade dose`nt work without subs, whats going to happen to forestry subs ?

 

[ollie989898]

Funny Money as your calling it has pushed our farm rents up & all the inputs along with it.
Its gonna take more than my rent vanishing to make this farm stackup once the full subs have gone.
IE the input sharks are gonna take a hit also, then were on a level playing field.

Funny money has been sucked up with reckless abandon by huge fertiliser and chemical manufacturers for decades- without subsidies the push for ever more output would never have happened and they would never have grown so fat off of European agriculture. It is no accident the chemical manufacturers see Europe as the most lucrative market- in other regions of the world talk of even a £50/acre chemical spend on wheat would get you laughed off the place. It doesn't happen in South America, nor Australia nor North America, I can tell you that (save for some specific and very high output regions or speciality crops), the reason being that the risk you would expose yourself to would be off the scale- in Australia, for example, no amount of fungicide spend can offset the fact it doesn't rain at grainfill and that happens believe me.

The truth is that subsidies have distorted livestock and crop production way beyond their natural boundaries and the environment has paid the price. Farmers became victims of their own success because they ended up producing food in such vast quantities the market couldn't find a home for it, culminating in policies such as intervention and the like, a further step down the path of madness.

Will inputs drop in price if subsidies go? I have honestly no idea. All I do know if that if they don't provide an economic return for the farmer when no subsidies exist then they sure as hell should not be used right now.