Farming Matters !

The Agricultural Revolution of the 20th Century

• Capital replacing labour
• Technology raising productivity
• Abundance
  Availability of food is now reasonably assured, - but historically food could not be taken for granted.
• Household expenditure on food
  - Down from 28% in 1980 to 15% in 1999

The Current Crisis

• Falling incomes - dramatic drop in the last 2 - 3 years. (Some sources quote a figure of 90%)
• Lost jobs - major impact - 23,000 last year alone, and the same expected this year.
• Lost business - leading to a rise in the suicide rate among farmers - a sense of personal defeat

Causes of Crisis

• Falling prices
• Weak world markets - affecting farmers worldwide
• Value of the Euro - prices set in Euros but paid in pounds affects payments
• Tougher regulations - e.g. to control BSE - rules on employment, use of land etc; affect profits

Dynamics of Agriculture

• Pressure of prosperity on costs - As people become richer they spend more on food, but on better quality not greater volume. Extra money goes on processing and presentation - and on non-food items.
• Pressure of productivity on prices - increased productivity leads to upward pressure on costs but to a decrease in prices.
• Market, Supermarket, IT
  - There is a greater distance between producer and consumer - i.e. frozen, tinned, prepared food etc.

  Less direct contact with the consumer, but governed by what the consumer will pay.

  Pressure from consumers via the supermarkets.

  IT gives swift responses and increases the need for similarly swift responses from the producer.

Process of structural reform impeded in Agriculture

Transformation of industries since 1950s

• Autonomous
  Farmers enjoy farming - have been prepared to work for lower levels of pay - unaware of, or untrained for, other opportunities
• Policy created - transfers of income (subsidies) maintain the status quo - protection of social pattern

Implications for the Rural Community

• Agriculture a minority economic activity
• Incomers ; commuters
  rural asset values pushed up
  political values - changes to traditional values
• Rural services become uneconomic
  transport, shops, schools,surgeries etc.
• Closures change dynamics

Where are we Going?

The global context

• Hunger - in a world of abundance
  -issue of poverty not of production
  -need to raise income levels worldwide to eradicate poverty
• A growing opportunity for world trade -WTO
• The 'globalisation' of the market
  IT and scale - the effect of technology;
  low cost of international transport:
  seeking of low cost sources to provide commodities
• Poses questions on how we want to run our world!

What does the UK public want?

Concerns about:-

• animal welfare
• environmental issues, countryside -
  some changes are inevitable, or we would still be living in the Stone Age
• food safety
  regulations help, but there is a need for personal responsibility too.
• new technology
  is now of greater concern, rather than the assurance of a sufficient supply of food (as in the 1950s).

Can UK Farms Compete?

• UK farms sell in an increasingly competitive product market
• Technology is international
• UK consumers can afford to be choosy
  niche markets; - if they become popular can be less profitable
• Is the UK prepared to pay for the environment?
  in theory 'yes', but in practise probably 'no'.

Rural Communities

• 'Smaller' agriculture - (will continue to contract)
• A rural population which is part of a wider economy
  (inescapable)
  influence of worldwide culture
  smaller local businesses vulnerable

therefore

• A rural population which is more mobile
  wider horizons - less local loyalty (?)
  some will succeed other will become casualties
• A rural population in which there are social casualties
  the immobile; the unskilled; the old; the poor.

  the 'unskilled' have no marketable skills - do not have the right 'labels'/qualifications;
  mobility of population leaves the old isolated;
  affluence leaves the poor isolated.

Turning problems into opportunities

• Part - time farming
  changes the type of farming, skills, mobility etc.
• Exploiting identified niches
  farmers markets, specific products, IT sales.
• Using resources for new small scale businesses
• Guardians or Gardeners of the countryside
  Guardians have a 'minimalist' approach
  Gardeners use the land for non-farming purposes e.g. golf

Building a modern rural society

• Joint public/private provision of services

• Transport - better provision of transport not 'punishment' of car users
• Care - willingness to help one another
• Shops - utilizing redundant facilities, creating new homes and jobs
  -needs a radical view of what is acceptable
  - not conservation by high prices forcing the poor out.
• Discovering the joys of diversity
  have to learn to live with opportunities not pre-conceived ideas

Solutions will have to be worked out by individuals in individual situations.

1. How do you put a price on non-commodities?
(e.g. landscape)

2. Will people pay?
Yes - if for perceived gain ! ! - e.g. unpolluted water; flood relief schemes;
No for others - such as stone walls; protection of the landscape;

3. Fuel Crisis
Taxes have to be raised for the common good. Income tax is politically unpopular, therefore indirect taxes are used (especially those which are cheap to collect -such as fuel tax). A single across the board tax is better because it does not distort demand - but VAT is also very unpopular.
The tax on fuel is totally ineffective environmentally
People worked for the policy not market forces.

5. Will urban migration to the countryside and expectations then destroy it?
If urban values are imposed and prevail - yes!
If rural values are absorbed - no!

Final Comments.

1. Help farmers by buying British!
If proposed by the government this is against EU and WTO rules
-however -
if farmers, processors, retailers, and consumers act then it is possible to differentiate.
Therefore it depends on the consumer!

2. Who will own the land?
those who work it or others who let it out to be worked?
Land prices high:- attracts investment for amenities or speculation. Farms are being bought for a 'lifestyle'; not for an income but as 'a cost to be borne'.

3. BSE compensation
- would have bankrupted the feed companies - (but is that justice for farmers?!).

Notes from the lecture given by John S. Marsh:- October 18th 2000

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