I’ve always been conscious I’m one of the lucky few; farming is an extremely difficult industry to get into. Capital requirements are so very high for the land, machinery and inputs needed to start a farming business. School leavers obviously still have the potential to become an employee and work for someone else but for those with ambitions to farm in their own right the hurdles are very high. I grew up on the family farm and from my first days at Primary school I had an unwavering determination to follow in the footsteps of my parents, grandparents and great grandparents and return to the family business. I fulfilled that wish and twenty four years later here I still am loving what I do. But this would not have been possible without the unwavering support of my immediate family. But this article isn’t about me; its about recent news events involving our industry and what they will mean for the future of the agricultural sector.
On 21st May DEFRA announced plans for a lump sum exit scheme for retiring farmers. Farmers can take their remaining BPS payments upfront so creating opportunities for new entrants. At first sight this makes a certain amount of sense. Firstly this isn’t additional funding; the same sum of entitlements are available for these farmers but over the longer wind-down period of BPS. It is recognised that the industry does have a stale, pale and male image problem. It certainly isn’t a good statistic that the average age of farmers in the UK is 59 and that there are a lot of active farmers still working well into their 70ies and 80ies. There’s no denying the age profile of the farming sector is far too top heavy. However will the retirement golden handshake scheme have a positive effect for new entrants as DEFRA have hoped? Clearly this scheme isn’t going to fund or support the new entrants themselves. It merely aims to add supply to the land market. Will the retirement scheme reduce land prices? This seems very unlikely. The loss of BPS will apply some downward pressure on prices but the predominant issue will remain the tax status of farmland. I would suggest that existing established farmers and lifestyle buyers will still be the dominant players in the land market and new entrants will be little better off than they are now in acquiring this extra land. The amalgamation of farms into bigger units has been an ongoing trend throughout my farming career; is the retirement scheme simply going to exacerbate this? If so it becomes even more difficult for new entrants to enter the market as farms become bigger and bigger. But there’s another seismic problem coming down the road to make life difficult for new entrants which isn’t being talked about and that’s the fallout from the ongoing war on red meat.
Simply put a majority of new entrants into farming enter the industry via livestock. It isn’t really a surprise. A potential new entrant thinking of an arable business (or horticulture) more or less needs a lottery win sized chunk of capital to get things working. With a new arable unit tractor costing around £150,000 you can immediately see the scale of the problem without even thinking about grain stores, combines, attachments etc etc. Unsurprisingly, however, new entrants can start a viable livestock enterprise with some sheep or beef cattle. Grazing licenses are scalable, affordable and flexible. You might need some handling equipment and electric fencing gear but basically you can get a viable livestock enterprise up and running for £10k. I’ve locally met many people in this group. Hard working individuals, yes, but perhaps work can be done part-time and shared by family members. Profits can roll the business forward and create a base to look to a farm tenancy maybe through a Council farm. The obvious point I am making is that for most new entrants sheep and cattle are a viable gateway into the farming industry. And here’s where the second new story of the week gives those entrants a kick in the guts. The much heralded UK/Australian trade deal has opened a Pandora’s box of cheap imports. Maybe this deal in itself won’t be the knock-out blow but it’s being seen as a benchmark for similar deals with many other countries not least the US who will dig in their heals and demand similar trading arrangements to the Aussies. So let’s be clear the red meat sector is in all sorts of stormy waters. Not only because the market will be completely undercut by all and sundry low quality imports from all over the globe in a naïve attempt to make food a teeny bit cheaper. Not only because Part II of the Food Strategy will herald yet another round of anti red-meat rhetoric. Not only because Fossil fuel lobbyists will insidiously continue to label red meat as the bĕte noire of climate change. Not only because fake-meat corporations will need to keep pushing dodgy propaganda to satisfy the monetary growth needs of their shareholders. It is indeed going to be choppy waters for the red meat sector with all these pressures abuilding. And the first to lose out will be the new entrants trying to get a foothold into farming with a few cattle or sheep on the first step of their farming ladder. The first to fall won’t be super-sized feedlots in the US or Argentina. It won’t be Australian farms, either, taking advantage of Truss’s rushed deal. Smaller UK farms which have livestock at their core and those on more marginal ground with unavoidable lower productivity just won’t be able to survive this onslaught with the knock-on implications for their local economy. And new entrants will have even bigger hurdles than they do now as their scalable gateway into the industry is closed. But, hey, steaks for the masses might be a few pence cheaper despite having to be chugged from the other side of the globe so maybe it’s all worth it? And will the average age of farmers reduce from 59? I’ll wager it’s trip over 60 by 2030. Bravo DEFRA.