What excellent news!

The profitability of the average UK farm could fall by as much as half after Brexit, new research suggests.
The report, by the Agriculture & Horticulture Development Board (AHDB), says the “worst-case scenario” would cut average farm profits from £38,000 a year to just £15,000.

That’s assuming:

Reduced subsidies and tariff-free access to the UK for foreign producers. Average annual incomes fall to £15,000

Those current higher incomes being, of course, how much we consumers are screwed by the current EU based structures.

22 comments on “What excellent news!

  1. This is where Theresa has her opportunity. Carpe agricola Instead of nobbling the gas and leccie market to ‘help’ peeps…. remove the nobbling of farmer’s market to give peeps cheap food. I bet there’s even some student votes in there if you can get cheese down below the price of gold.

  2. We’re constantly told that farmers are forced to sell their produce for “less than the cost of production” by the evil supermarkets. This is only sustainable because of farm subsidies, remove them and a commercial price must be charged. TBH I’m not convinced that there are vast supplies of fresh milk waiting to be sucked into a tariff-free UK.

  3. They said that removing subsidies from NZ farming would destroy it. They were wrong.

    It will survive, particularly if subsidised competition is not permitted.

  4. There we go then :no problems with Brexit! Just say goodbye to British farms.No strategic problems there: with all those damned foreigners putting up the price of food.

  5. Chris- you could well be right. Prices may not got down. The market is so skew-whiff with subsidies, directives, and set aside policies, that not obvious what will happen to prices.
    If i was thinking along manifesto policy lines i’d be thinking about making up for leaving Farmers to fend for themselves by saying they can build homes on their set aside land. kill two birds with one stone.

  6. While I’m sure farm incomes would drop post Brexit under those assumptions, I’d wager most of the drop would be due to the reduced subsidies not a reduction in prices for agricultural outputs. Farm profits are collectively about 50-60% made up by the subsidy, so if that falls, profits fall in step. Most farm outputs are priced at world prices already, cereals certainly are, milk and meat less so, but they would be linked to world prices. And world prices aren’t going to change because of Brexit.

    The other thing to remember that the EU External Tariffs on food are more of a protection system for food processors and manufacturers than primary producers. Yes there are tariffs of raw foodstuffs being imported into the EU, but they are relatively low. The high tariffs are saved for manufactured products – this allows EU based processors access to cheap raw materials at world prices but protects them from foreign competition. That is what will change post Brexit, not that sides of beef coming from Brazil will be cheaper by all that much, but that cans of corned beef definitely will be, that sort of thing. So Uk based food manufacturers will face slightly lower costs, but considerably more competition for their processed output. Expect to see all manner of weird brands and products post Brexit as foreign processors enter the UK market.

  7. What do you care Reedy?

    Or are you so rich that forking your cash over to promote a lovely lifestyle for ESpew Grandees and their clients is nothing to you.

    Did you invest during the 50s “Golden Age” of mixed economics and are thus fabulously wealthy?

    Or more like most socialists even the pot you piss in is stolen.

  8. @ Chris Miller
    Yes, there is milk coming into the UK *because* there is an EU-set limit on UK diary herds in order that we shall consume some of France’s dairy surplus. That is one of the reasons why I considered voting “Leave”.

  9. It’s hard to imagine the world as DBCR conceives it, one where the whole world raises prices just for exports to the UK

  10. @ SE
    Land Value Tax encourages farmers to be more productive since it only levies tax on the *unimptoved* value of the land. So it helps with food production and lowers food prices.
    However it does nothing or virtually nothing to solve all the other problems for which DBS Reed proposes it as a cure since it’s maximum value is 2-3% of GDP whereas the government spends some 40% of GDP.

  11. Why would anyone want to run an “average farm”. There is plenty of money to be made in agriculture if you have a bit of imagination and are not useless.

  12. John77, I think that you misunderstand what is meant by the unimproved value of land. It seems as if you believe that all land has the same value regardless of location, so that Hyde Park could be bought for the same amount as a comparable plot of land in Lincolnshire. My guess would be that the asking price for Hyde Park would be thousands of times greater. Any views?

  13. Could the difference between the £15k and the £38k be made up by farmers cultivating Magic Money Trees?

  14. Diogenes
    NO, I do not fail to understand. The unimproved value of land is that without improvements such as artificial drainage or irrigation or fertilisers or buildings or …
    The land does not all have the same value – you cannot grow wheat on moorland receiving a salty breeze from the North Atlantic nor on barren rocks.
    There are variants that would tax land on the basis of its value excluding improvements made by the owner – so if any of the Duke of Westminster’s tenants buys his/her freehold he/she will be subject to a swingeing tax but none of them suggest taxing the Duke except n the value of the farmland that his ancestor inheritad and developed..
    OTOH property taxes based on the value of the buildings cost the Duke £millions a year.
    A LVT would be a massive boon to Grosvenor Estates.

  15. John77, that is exactly what the LVT people say. According to their website. The more valuable your land, the more tax you pay. The replacement value of Buckingham Palace is less than the location value of the land, most of which has no buildings on it.

  16. I guess the test is how much did Hilton pay for their plot of land, the price of the plot now, less the replacement cost of the hotel

  17. @ Diogenes
    WTF? The unimproved value of land is based on what crops you can grow on it.
    Hyde Park is better than a moor in Sutherland but any serious value comes from the improvements.
    Go talk to someone in property investment instead of professional liars.

  18. The unimproved value of land is its sale value minus any improvements draining it etc made by the owner him/herself, but it includes all the value bestowed on the property by the locality itself. So a derelict site in Central London will have the same taxable value per sq. ft. as all the built-up land around which is why the tax is an incentive to bring the site into its most intensive use and why the LVT is the same for whole areas, making it cheap to evaluate.

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