NFU proposals for a new farm subsidy system only fit for cloud cuckoo land

nfu-back-british-general

It’s a special anniversary this year – 70 years since the 1947 Farming Act. I will return to this anniversary in more detail later in the year, but today I want to discuss one particular thing.  The 1947 Act was most unusual, possibly unique, because it enshrined in law an obligation on the part of Government to agree a very important and very expensive national policy, with an NGO.

Can you imagine this happening now?

That NGO, as some of you may have already guessed, was none other than the National Farmers Union, the NFU. The Act stipulated that the Ministry of Agriculture would sit down, every February, with representatives from the NFU, and conduct the Annual Farm Price Review. At this review, the price paid to farmers for commodities, such as beef, wheat or potatoes, was thrashed out. Behind closed doors. Not even the Treasury got a look in. Needless to say those at the Min of Ag (many of whom had taken part in the wartime programmes to produce food at any and all cost) were close friends of the NFU reps. I wonder if any minutes of the meetings survive at the National Records Office.

The purpose of this subsidy was to pay farmers the difference between what the market was offering for their produce, and the price that had been set between the Min of Ag and the farmers for that commodity, in that year. This was called Agricultural Price Support. It’s interesting to note that the subsidy was not intended to provide cheap food to the consumer, but to ensure Agricultural Production increased dramatically. Cheap food imports were still encouraged (via low tariffs) and farmers were compensated for their relatively higher production costs by the price support mechanism. These meetings and the cartel they represented continued for decades.

Here’s one story of a Cabinet level discussion on farm prices:

screen-shot-2017-01-12-at-07-48-45

 

 

 

you can read more about this interesting piece of history in this article.

Fast forward to 2017. Surely, you might think, everything has changed now? In these straitened times, the NFU couldn’t possibly be thinking of reintroducing the notion of price support! Well you would be wrong.

It seems the NFU has been delving back through its long and distinguished history to come up with some new (ahem) proposals for what a farm subsidy system might look like post-Brexit. The policy document I have seen suggests that the NFU wants to propose a support system with an emphasis on “delivering for food, for the nation and for the public.” Note that it does not specifically say “supporting farmers”.

What appears to be the main element of this support system is a scheme of payments to “mitigate volatility”. This is jargon for price support, and there we are taken straight back to 1947. Prices for agricultural products do fluctuate in global markets, according to how much of each thing is produced, and what the demand for that thing is. Prices can also fluctuate wildly, because traders exploit weaknesses in the market system to speculate, in order to make quick profits. The NFU are also considering proposing “coupled” subsidies for market volatility – that is subsidies which are linked to how much of a particular agricultural product is produced by each farm. Coupled subsidies were mostly abandoned under the Common Agricultural Policy in 2005, because of their damaging impact on the environment and their tendency to encourage over production (remember the wine lakes and butter mountains?).

In another throw back to days of yore, the NFU is also proposing a system of capital grants to improve productivity. Another piece of ancient history – the 1947 Act introduced capital grants for farmers to increase their productivity by draining wetlands, ripping out ancient woods and hedgerows, and ploughing wildflower meadows and heathlands.

But I don’t want to suggest that the NFU has only returned to the golden days of the Annual Farm Price Review. There are some indications that the NFU recognise that the public expects them, as custodians of 3/4 of England’s land, to do other things. So they are proposing a “farmed environment scheme”. While this is touted as a replacement for the “greening” payments under the current CAP system, it’s really a return to the Entry Level Scheme (ELS). ELS was dreamt up by the NFU and their friends in Defra (and a few conservation NGOs) as away of channeling subsidies to farmers in such a way that it gave the impression that they were helping farmland wildlife and heritage features. The evidence from monitoring showed, as many of us said at the time, that at best ELS was merely putting a hold on further environmental damage, and in the main it did nothing for wildlife or other features.

Not surprisingly ELS was abandoned as an approach to Agri-Environment in the 2013 reforms, much to the annoyance of farmers who had been happy to take the £30 a hectare a year, for doing much as they had been doing before.

There is also a proposal for subsidy for the euphemistically titled “animal and plant health measures”. I think we can all guess what this means  – that part of a farm subsidy policy will pay to kill more badgers.

The most interesting proposal coming from the NFU is for a “selective scheme for environmental enhancement in designated areas.” This sounds promising, until you read on to discover that the NFU have cheerfully combined National Park AONB and SSSI all together in one lump of  “designated area.” As someone who has watched the Dorset AONB disappear under Maize for biogas over the past few years, while fighting to protect one particular area (Rampisham Down) which is an SSSI, it’s difficult to understand how anyone could be so ignorant as to lump the two together, as if they needed the same approach.

So, in a nutshell, there are the NFU’s proposals. No mention of public goods for public money, nothing about helping alleviate downstream flooding, no mention of Carbon, let alone Organic. When you add in comments from the NFU at last week’s farming conference that they were hoping for a 20 year transition period out of the CAP, and you can see that they are clearly living in NFU la la land.

 

For an alternative take on the future of farm subsidies, read the People Need Nature report “A Pebble in the Pond: opportunities for farming, food and nature.”

 

 

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About Miles King

UK conservation professional, writing about nature, politics, life. All views are my own and not my employers. I don't write on behalf of anybody else.
This entry was posted in agriculture, Brexit, farm subsidies, NFU and tagged , , . Bookmark the permalink.

10 Responses to NFU proposals for a new farm subsidy system only fit for cloud cuckoo land

  1. furtlefinch says:

    Dont dismiss the old Farm Price Support scheme. It was much better than EU Intervention (which led to grain mountains) or the current landowner subsidy.
    Remember that its original purpose was to keep farmers in business during price fluctuations. When the price was high, farmers should be able to spot this and grow more of whatever produce it was the following year. When prices are low, Price Support makes up the difference in price between market and the minimum level set. The produce should still be cheap and so surpluses should be sold easily – no food mountains. It is the simplest scheme and only subject to abuse as you say by the farming lobby pushing up the minimum support price. But with democratic accountability and a few tweaks, it could be made to work alongside conservation subsidy.
    For example, how about locally-decided support prices? Or different support prices for organic or wildlife-friendly farms?
    If you don’t have any food subsidy system, you need to work out whether an entirely conservation-based system as being suggested by a few post-Brexit would be enough to stop UK farmers going bust.

    • Miles King says:

      thanks furtlefinch. I have proposed an alternative approach with my people need nature hat on (http://peopleneednature.org.uk/public-realm-policy/pebble-in-the-pond/).

      Perhaps a system where support was provided from the public pursae when prices were low, but the support was then paid back when prices were higher, would be more equitable. This insurance approach is I understand being seriously considered by the Government.

      • I understand George Eustace is seriously considering the insurance scheme, with a mooted intevention level when farm gate prices fall BY 70% ( NB this was just word of mouth from someone who attended a Cornwall NFU meeting with GE last year). This would equate to dairy farmers being able to draw on the insurance payout only when milk price falls to 7 or 8p, at current levels. I wonder how many dairy farmers could hang on that long to take advantage of the insurance payout?

  2. murray marr says:

    Thanks Miles. This is all very interesting and it made me look to see what Graham Harvey had to say about the Act in his excellent book, The Killing of the Countryside, [1997, p112]:
    ‘The 1947 Act … had two main objectives – to increase farmers’ incomes and to expand food production. … But in its early years the Act looked like being a failure. Instead of investing in new tractors, farmers preferred to spend … on such things as cars, washing machines and carpets for the sitting room. This is why the government started to introduce production grants covering … the ploughing of old meadow, field drainage and the removal of hedgerows.
    … Long before Britain entered the EEC, her countryside was being eroded by the power and influence of the agricultural lobby.’
    And there’s me thinking it all started with CAP. Thanks Miles for getting this important historical stuff out there.

    • Miles King says:

      thanks Murray. I went into a bit of the history in A Pebble in the Pond, but I had to keep it short so didnt go into the detail, fascinating though it is (to me.)

      I am planning to write further pieces in the coming months to er celebrate? the 70 year anniversary; and look back further into farm subsidies & tariffs pre WW2.

  3. dayetucker2011 says:

    Great stuff Miles. Up here we have not just one but two very able Cabinet Secretaries for Rural affairs, each with a specific remit. Since 2015 our government have begun to prove themselves well able to fend off any proposals perceived as backwards that might compromise fair, resilient, rural policies across the whole rural sector. Our NFUS Head of Policy has been seconded by Scottish Government a couple of days a week to contribute his expertise. His experience of the land based rural sectors including the environment should build on the Scottish Government’s direction of travel towards integration and ensure more effective policy delivery than has been the case thus far. Unless Policy can be practically delivered there is no point to it.
    From the many industry meetings I’ve attended the need for a change of direction has already been accepted and the discussions taking place are not about trying to hold onto a production based subsidy system. This not least because under WTO rules it would not be allowed whether in or out of the EU.

  4. Chris Hughes says:

    We clearly have the opportunity of a lifetime to reverse nature’s decline, but how should we be going about it?
    Wildlife charities have put forward certain proposals and in Devon, at least, only a few MPs have pledged their support for protection of the natural environment. Is this form of lobbying too tame and does it give too much wriggle room.
    Should we not be mounting a campaign to gain public support and when would be the best time?
    Do we need a campaign manager, contingency plans and a fighting fund?
    If this is our El Alemein, we have to rally the troops and consider what our equivalent of 800 Sherman tanks should look like, so that we have every chance of turning the tide.
    We have to inform the public that nature is in serious decline and we have to ask people and their MPs if they consider that we have a moral duty to protect nature for future generations in the hope that this might get us all looking beyond short term economics.

  5. Ewan says:

    always good to actually include links to the original source paper in critiques like this … got a link ?

    • Miles King says:

      it’s unpublished material from the NFU sent to me by someone who wanted to remain anonymous. I didn’t want to risk their identity being revealed by publishing the material they sent me. You’ll have to trust me that it is as I have written. There’s been no denial from the NFU, who had ample opportunity to comment on it.

  6. Pingback: Climate change, habitat loss, and adaptation in birds and insects | Why watch wildlife?

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