Can farmers really afford to survive without subsidies?
I am an Agricultural Degree student at Askham Bryan College in York studying in my final year. Growing up in a farming community in the Yorkshire Dales I have always had a great interest in agriculture.
As part of the BSc Hons course, and in addition to the other several thousand word assignments I’ve already written, I now have to write an 8,000 word dissertation (yawn). The topic I have chosen to study is the barriers to diversification in upland-hill livestock grazing farms. This topic is becoming huge, as farmers wonder whether their farms will survive through the uncertainty of Brexit. Are these farmers chasing a silver bullet that can’t be fired?
Diversification is when farm businesses employ non-conventional methods to raise income, which is commonly known as farm diversification.
As well as taking an interest because these farmers are my neighbours and friends, I believe these upland-hill farms have the most prominent barriers to diversification; due to poor climate, soil and terrain which lead to lower yields and higher production costs, not to forget the 7 month winters! The uplands are one of the most important areas in the UK – the outstanding natural beauty (not just the women) in the uplands attract millions of tourists a year, generating millions of pounds. 70% of the UK’s drinking water comes from the uplands, many pieces of artwork, music and books have been inspired by this area, and it hosts habitats for hundreds of rare flora and fauna. In England 41% of the breeding sheep and 40% of beef cows are bred in the uplands, highlighting the importance of agriculture.
The business income of farms is typically made up of four key elements: agriculture, diversification, agri-environment, and the Basic Payment Scheme. The most heavily relied upon income seems to be the subsidies.
The RBR hill farming report (March 2017) highlights that only the top 20% of these farms on average make a profit, and that’s with subsidies! Take away all of the subsidy or cap them and I’m sure only a handful of farms would remain profitable (under current farming methods).
This is where Brexit comes in (another yawn). When the votes were counted and it was announced that we would be leaving the EU, there was a great uncertainty in the agricultural industry, whether the subsidies would stop altogether or whether the Basic Payment Scheme would be capped.
It was not until January 2018 at the Oxford Farming Conference that the Secretary of State, Michael Gove stated that the current payments under the Common Agricultural Policy (CAP) would be extended until 2024.
In 2024 the CAP would be scrapped and replaced by Britain’s own agricultural policy. The Government is set to publish its reformed agricultural plans in the spring.
Mr Gove stated “enhancing our natural environment is a vital mission for this Government”. Farmers will be looked to be paid for public goods such as “maintaining beautiful landscapes” – this moves from a subsidy system that pays farmers for the amount of land that they have.
So subsidies are being extended until 2024, this gives farmers a six year transition period to explore an alternative income stream. As subsidies make up a large proportion of an upland-hill livestock grazing farm’s finances an alternative income stream would of course have to be turned to.
This is where diversification comes in. Diversification can be implemented on farms to source a new income stream. However it is not as simple as that. There are a string of barriers that come with diversification. The work on my dissertation is to establish the most prominent barriers that these farmers face, and to possibly form some sort of a solution/suggestions to increase the chances of a successful diversification process.
A questionnaire has been created in order to gather farmers’ views – I need as many responses as possible to increase the validity of the study.
Please share the questionnaire amongst your farming friends. All responses would be received very gratefully and would be of great help to me, and to the farmers that face some of the most challenging farming and financial conditions in the country.
The link to my questionnaire is shown below:
Max Hamer is studying for an Agricultural Management BSc Hons Degree at Askham Bryan College. You can follow him on twitter @maxhamer97.