Written by John Swire
The revived Agriculture Bill and ongoing OSR problems are giving British growers sleepless nights says Jo Stanley.
Two concerns have been keeping me awake recently. In fairness, with a new born baby I’m awake anyway. But at least I’ve got something to think about during the night feeds. To my mind we, as a sector, are rolling inexorably towards two major existential issues which we are either too busy or too terrified to face.
First: we are losing OSR as our staple break crop. Although the neonicotinoid ban was levelled in 2013, most growers had a few years grace before the devastating impact finally hit. Tales of crops grazed away overnight in the south-east were, to me, like the sound of distant thunder until flea beetle finally hit Leicestershire with unexpected ferocity in 2018. I halved my normal OSR area in 2019, but given the same calamity befalling that reduced crop this time, I plan to abandon it altogether in 2020.
And replace it with what? My HEAR crop was reliable and, in some years, my best earner and served a valuable role in a healthy rotation. The alternatives are unedifying – and unprofitable. I recently attended an agronomy meeting optimistically trailed as an opportunity to learn about alternative break crops. The best the speaker could offer, in the end, were the winter beans already sitting uselessly in my store awaiting drilling – or, remarkably, the suggestion of continuous wheat until the time crops such as chickpeas or soya become viable in the UK.
Some growers have been without OSR for many years, it’s true. But the niche crops grown instead of the yellow peril are just that – niche – and those growers are unlikely to welcome the additional competition of 500,000 extra hectares of beans, peas and linseed – for which the market does not exist, and which all have their own problems. The reintroduction of livestock and rotational grass into arable systems is certainly not for everybody – and the livestock market is already similarly saturated. Will rotational environmental plots, or fallow, become a major element of rotations? They will have to pay.
The second stark issue which must be given appropriate attention is the looming withdrawal of direct payments, from 2021. With the re-introduction of the Agriculture Bill this month, it’s clear that the total phase out of BPS will now happen, with larger arable units feeling the pain first, regardless of underlying profitability.
There is cause for optimism with surprise revisions to the Bill, which now sees clear mention of the importance of food production, security and increased farm productivity alongside better environmental management. But that doesn’t change the underlying calculus that – according to Defra’s own figures – the average cereal farm lost £10,000 per year between 2014-2017 on pure agricultural undertakings. Remove £160/ha of BPS from your gross margins, and where does that put your financial sustainability?
The government has recently committed to maintaining farm spending at the current level for this parliament – until 2025 (though in what form, they won’t be drawn). From 2025 ELMS is due to phase in. That leaves a gap of four years of reducing direct payments, before the introduction of the replacement for CSS. And that is an important distinction. ELMS is not intended to replace the Pillar I support of BPS, but the Pillar II incentives of the current Mid- and Higher-Tier schemes. The overall level of support will almost certainly be significantly reduced, with the majority in return for taking land out of production.
The direction of travel is now clear – if not the detail. The increased focus on environmental sustainability and high standards in our domestic agriculture is to be welcomed, but with one caveat: we must be given the potential for financial sustainability as businesses, otherwise all is for naught. That means government must address the funding issue for ELMS, and go far beyond ‘income forgone’; that our crop protection regulations must be overhauled and based on the evidence, not on lobbying from emotionally compromised eNGOs and celebrities; and that our domestic standards must be protected in future trade deals.
A final amendment to the Ag Bill gives government the power to act against unfair practices in the agri-supply chain. This is most welcome. It is, frankly, past time that the wider industry realised they cannot keep extracting the maximum possible value from farmers, year after year, and expect us all to still be here in ten years time.
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