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WMIC: Food, farming, environment

Published: Wednesday, 25th July 2018

As might be expected, this year’s government report contains a wealth of information on the different aspects of agriculture, a few points of which are picked out in this article

The one percent

Although it may only account for less than 1% of the national economy and around 1.5% of employment, agriculture takes up over 70% of the UK’s land area and is consequently, a significant factor in the economic and social life and environmental quality of much of the country. Reporting on the state of the country’s agricultural sector is therefore an important task for the government, indeed, one that is required by statute. As might be expected, this year’s report contains a wealth of information on the different aspects of agriculture, a few points of which are picked out below.

FBI investigates farm income

Bearing in mind the different types of farming that take place, it should be no surprise that farm income varies greatly depending upon what is being farmed. In order to allow comparisons between the incomes of different types of farming, the report makes use of the Farm Business Income (FBI) model. This is made up of the total output from agriculture, agri-environment schemes, diversification, Single/Basic Payment Schemes and any profit from the sale of fixed assets, minus the expenditure on things like overheads, fuel, repairs, depreciation and paid labour. Using this measure, across farming types, it seems that in 2016/17, 20% of UK farms failed to “make a positive FBI” while under a quarter had an FBI of over £50,000. Illustrating the variation between farm types, “lowland grazing” in England had an average FBI of £16,000, while the average for “general cropping” farms was a more substantial £70,000.
Interestingly, the report also contains estimates for the following 2017/18 period. This suggests that there has been a significant increase in FBI for some types of farming. There are a number of reasons for this, however, it suggests that the fall in value of the pound has “been a key driver in increasing average Farm Business Income for a number of farm types”. For example, it is expected that in England, cereal farms’ income will have increased by 48% in 2017/18 and almost doubled for diary farms, albeit that for dairy farms this follows two years of particularly low income. On the other hand, specialist pig farms incomes will have increased by a more modest 5% and some types of livestock grazing may even have fallen back from the previous year’s figures.

Organic growth in the West Midlands

Although the report generally has little to say below the level of the nations that make up the UK, there are regional figures for organic farming. While this makes up only a very small percentage of farm land, it’s perhaps worth noting that the West Midlands had the third largest area of fully organic farming in England, with 27,600 hectares currently in use and a further 5,000 in conversion. However, this is some way short of the South West’s existing 137,000 hectares, which make up nearly half of all England’s fully organic land. Nonetheless, despite the amount of organic land in the UK increasing in 2017, it seems this is still short of its 2008 peak.

Bye, bye birdy

Needless to say, a key element of organic farming is the elimination of artificial, chemical fertilisers. Looking across agriculture as a whole, the report notes that the application of nitrogen and phosphorus fertilisers to grasslands had fallen between 2000 and 2016 and that during the same period, the soil nutrient balances for nitrogen and for phosphorus had also decreased. The report also notes the fall in agricultural emissions of nitrous oxide, methane and ammonia. However, on the debit side, it seems that the 2016 farmland bird index stood at an all time low, worryingly less than half its 1970 level. As “bird populations are considered to be a good indicator of the general state of wildlife”, the decline in birds is also likely to reflect on wider biodiversity.

Food, farming and the environment beyond Brexit

On the theme of agriculture and the environment, it’s also worth noting the report published by the Commons Environment, Food and Rural Affairs Committee in June. Responding to the Government’s “Health and Harmony: the future for food, farming and the environment in a Green Brexit”, proposals which will inform a new agriculture bill later this year, the Committee focused on the impact of leaving the Common Agricultural Policy (CAP) and “whether the Government’s proposals will deliver on its ambitions to both increase farm competitiveness and enhance the environment”.
Broadly speaking, the Committee called on the Government to “ring-fence funding for farming post-Brexit, provide much greater details on its new support mechanisms for farmers, and ensure environmental and welfare standards are maintained on products entering Britain”. In leaving CAP, for example, the Committee highlighted the need for the Government to produce a “thorough sectoral assessment of these impacts to identify support for small and medium sizes farms”, noting that “withdrawing Direct Payments will have a varied impact between sectors, and particularly damaging effects will be felt by grazing livestock, cereal and mixed farms”.


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