BY JIM WEBSTER
The BBC has been at it again, telling the world that government is paying farmers large sums of money to retire. OK so where to start?
Let’s start with the money. The EU had a system of farm support. Because it was an EU scheme it was obviously worthy (at least to the metropolitan BBC crowd) and was supported by all right thinking people. At this point perhaps I should include a trigger warning or recommend people retreat into their safe space?
Basically it was a payment of a fixed amount per acre. As it was an EU scheme it was more complicated but in simple terms it was £92 an acre. To get this the farmer had to meet the ‘cross compliance’ terms. Some of these were already law, some were extra environmental measures. All these things cost. Meeting cross compliance does not come ‘free.’ But the idea behind the scheme was not unreasonable. EU legislation and regulation, like UK legislation and regulation before it, imposes cost of food producers. So it’s more expensive to produce some foodstuffs in the UK than it is in those countries who compete with us. At the very least some of our larger competitors have the advantages of huge economies of scale.
These economies of scale disadvantages are not just because we’re a small country, they’re also a matter of public policy. So in 2010 a company called Noctron Dairies wanted to build a 8,100-cow dairy at Nocton Heath in Lincolnshire. There was a howl of protest and eventually the plans were withdrawn. Yet in the USA, 49% of all dairy farms are over a thousand cows. In the UK our average herd size is about 143 cows, in New Zealand it’s 414. We’re peasants, crofters compared to the competition.
Yet the people who demand the high standards, who howl in righteous fury about ‘factory farming’, will happily buy cheap imported food produced on factory farms. It’s not just dairy, look at vegetables!
But anyway, the EU (like the UK before it) realised that if you want to keep an agricultural industry, and insist on demanding high standards that the consumer has no intention of paying for, then either your industry collapses or the tax payer has to step into the breach.
Actually there are good social reasons for the tax payer stepping in. Food price rises are regressive and act as a tax on the poor. The poor spend a far higher proportion of their income on food and there is a large disparity between those who don’t consider themselves rich and those who don’t realise they’re poor. A couple of years ago, the leader of the opposition earned more than the median household income of five families in this town (£136,762 as opposed to £24,381).
Fortunately our tax system can balance things out so that those doing very nicely can pay more tax and help subsidise the food for those less well off. So thanks to the EU Basic Payment Scheme and similar systems, the poor have a chance to eat decent food and don’t have to subsist on cheap imported rubbish whilst the wealthy can enjoy their avocado dip guacamole.
Now the system is changing. It’s changing here because we’re not in the EU and it’s changing in the EU because those governments who have money have been hosing their economies down with it in a desperate attempt to defeat Covid and not collapse. In the UK we’re moving across to ELMS. Environmental land management schemes. There is a lot to be said in favour of them, they’re tied more firmly to environmental benefits and similar. But as always there will be winners and losers. In all probability the losers will tend to be farmers who farm in environmentally unfashionable areas.
But as ELMS comes in (late, basically delayed by the farce that was the UK parliament in 2019. This was largely because Defra hadn’t got a clue whether we were leaving the EU or not and was terrified of spending money on preparing schemes which would be utterly useless if the remainers took power) so the Basic Payment System will be phased out. By 2024 the payment will be at least cut by half, and by 2027 it will disappear altogether.
So what the Government has said is that farmers who retire and quit farming, can take their coming years’ payments in a lump. It’ll be capped at £100,000 which for most farmers isn’t relevant, most of us would never see that much. The problem is, as far as I know, it’ll be counted as part of your income for that year and you’ll probably end up paying tax at the higher rate. What the state gives with one hand it normally takes back with the other.
I’ve talked to a number of farmers, some in dire financial states. I know people who have been hanging on waiting for this scheme. They are tenant farmers. Their current debts are such that when they’ve sold their livestock and machinery, the lump sum will probably help them pay off their overdraft.
Actually it’s a hard call and I’ve told some to seek proper professional advice. Are they better going bankrupt so they’re homeless and are on the list for a council property, or are they better taking this scheme, ending up penniless but they’re voluntarily homeless so are in a lot worse position when it comes to getting housed?
The ridiculous situation is that this pay-out is apparently supposed to encourage younger farmers because they are more likely to, “be more open to new nature-friendly ideas and more inclined to seek income by diversifying into businesses such as camping or glamping.”
Apparently the current system encourages “some farmers ‘to coast, to take no risks’”. So these old fuddy-duddies, many of whom would have retired ten years ago if they were civil servants or teachers, will be given a few quid and told to bog off.
Then instead of these coasting farmers you’ll have a new generation of young and dynamic people. Unfortunately these will be borrowed to the hilt to get a start in farming and are going to have to chase down every last penny of margin to help them pay off the bank. Especially as the payments to the industry are being cut.
The only reason I’m not sitting with my head in my hands is that I’ve never expected anything better from our political masters, whatever their party affiliation.
But the question that really needs asking, is if a muppet like me knows this stuff, why doesn’t the BBC? I mean, none of it is rocket science. If it helps I’ll even write it on an autocue for them. Then they can overpay somebody to parrot it.
Jim Webster farms at the bottom end of South Cumbria. Jim was encouraged to collect together into a book some blog posts he’d written because of their insight into Cumbrian farming and rural life (rain, sheep, quad-bikes and dogs) It’s available here.