Meurig can bugger off quite frankly

The NFU has called on the government to grasp Brexit as an opportunity to reverse a steady decline in self-sufficiency over the past 30 years.

The farming union said that with the right support it would be easy to replace the salad mountain imported from east Africa, pork from countries such as Denmark and New Zealand, and beef and dairy from other EU countries such as Ireland.

“We’re not advocating a fully self-sufficient nation – we recognise the need for importing food which can only be produced in different climates. But what we should be doing is maximising on the food production we are good at,” said Raymond.

At which point they say this:

The NFU said farming was such an important contributor to the economy – generating 3.9m jobs and revenues of £109bn a year – that the government needed to recognise the sector’s needs.

Lies, flat out lies.

That’s the whole food and booze sector. Almost all of which would exist with or without farming anything at all in Britain. Actual British farm production is more like £9 billion, tops. And then there’s this:

The NFU said it wanted a clear transition period after Brexit, during which the UK will remain in the customs union, that the UK remained within the external tariff area, which would guard against the country being flooded by cheap imports of questionable quality.

So we’re going to continue to import lots of our food but it must remain expensive eh Meurig?

Sorry, bugger off.

29 thoughts on “Meurig can bugger off quite frankly”

  1. As I understand it the NFU speaks for the agri-industrial complex, not the small farmer. They’re the cabal who exist on CAP subsidies, no wonder they’re running scared.

  2. There’s a large picture in Tesco’s dairy section, a middle-aged male model in tweed and cap, stone wall behind, then a field of friesians, with a caption “We ensure our farmers get paid a fair price for their milk”.
    What about people who want them to be paid an unfair price?

  3. “But what we should be doing is maximising on the food production we are good at,” said Raymond.”

    *Is* there any food production that the British Isles are particularly good for? By that, I mean basic foodstuffs – meat, poultry, grains, legumes, vegetables, etc.

    Because at first glance it would look like the climate in that region is pretty piss-poor for growing food and most anyplace warmer will be more competitive – even once you take in the cost of transport.

    Someone should tell the NFU man that, by all means, grow the food you’re good at – but if you need a subsidy that means you’re not good at growing it by definition.

  4. Brexit may mean we can’t import food anymore. The solution: keep import tariffs high for non-EU goods and GIVE US MORE SUBSIDY!!!!

    If ever vested nterests were laid bare it was here.

  5. Welsh lamb. Cannot buy it in from the EU.
    Cornish pasties.
    Particular fishing fleets? Shetland lands a fair bit of some.

  6. What is there now in East Africa where the Salad Mountain once stood?

    The image of a Kilimanjaro of wild rocket or a Mt Kenya of lamb’s lettuce with its chilly peak nestling in downy clouds is so wonderful that the NFU might turn to poetry or children’s books if the subsidies don’t come through in sufficient strength.

  7. “As I understand it the NFU speaks for the agri-industrial complex, not the small farmer. They’re the cabal who exist on CAP subsidies, no wonder they’re running scared.”

    The small farmer is as reliant on subsidies as the large ones. There aren’t that many economies of scale in agriculture once you get passed the peasant stage. That is to say, the costs of producing a beef animal is pretty much the same for 1000 animals/yr as 100/yr. Each animal needs X amount of feed, Y amount of bedding straw, Z square footage of shed to be housed in. The variable costs are high, the fixed costs are low. Similarly the seed/fertiliser/chemicals/fuel costs per acre of wheat are the same whether you grow 100 acres or 10000. The only fixed cost is the machinery, so once you reach the capacity of the largest machinery (probably a couple of thousand acres) then the only way you can take on more land is to take on more machinery, so no additional economies of scale.

    Arable farming is pretty much at that point now – most arable land is farmed in massive blocks by businesses that are maximising the output from their machinery. Livestock has far less fixed machinery costs, hence why there are lots of small livestock farms, there is no great economies of scale to be achieved by getting bigger. The profit per animal remains largely the same.

    As the profitability per acre is largely the same for large and small producers, they are both reliant on subsidies to survive.

  8. As the profitability per acre is largely the same for large and small producers, they are both reliant on subsidies to survive.

    I thought CAP subsidies were based on the size of the farm…?

  9. “I thought CAP subsidies were based on the size of the farm…?”

    They are, per acre. So as the per acre profitability of a 100 acre farm is roughly the same as the per acre profitability of a 1000 acre farm, both are just as reliant on the subsidy to make a profit.

  10. Bloke in North Dorset

    Jim,

    The Economist did one of their specials on the use of technology about a year ago. Their did seem to be scope for some reasonably big improvements in yield, but I did get the impression that the growth in yields is asymptotic. Where we are on the curve I don’t know, or even if it is.

    What’s your view?

  11. The *whole* *point* of getting out of the bloody customs union is so that we can *get* *rid* of import tarrifs so that we *can* import food at its natural market price instead of being forced to pay artifically expensive prices.

    If you want people to pay two quid for your lamb instead of one quid for New Zealand lamb, then it’s your job to persuade me to pay two quid instead of one quid, *not* to force me to pay three quid for the New Zealand lamb.

  12. Did farming stop with the repeal of the corn laws? Not that I remember.
    Farmers already enjoy quite a few exemptions from planning rules. Some of them probably make more from barn conversions than farming.
    So here’s a low cost idea: give them permission to build on their land. Lots of people would like to live in a green belt.

  13. The only sensible debate would be whether agricultural subsidies should be stopped immediately or ramped down.

  14. I thought (happy to be corrected) that the main effect of agricultural subsidies was to increase the value/rent of agricultural land. They also allow producers to sell their product (e.g. milk) for less than the cost of production, an otherwise untenable situation.

    Take away the subsidies and land values/rents would fall, while prices would rise – unless there are oceans of cheap world milk out there that would get sucked in? Some foods (grains, milk) are almost completely fungible, but there’s a premium market for Welsh lamb, Scotch beef etc.

  15. @ Jim

    But if Small Farmer A and Large Farmer B both achieve the same profitability per acre…

    …then surely, Large farmer B will be significantly better off after the big fat subsidy cheque arrives from the EU?

  16. @BiC
    What Jim’s saying is the profitability per acre between small & large farms isn’t much different, due to the constraints of what’s being done. Not much economy of scale. So if subsidy is allotted on a per acre basis, there won’t be much difference in the subsidy input either. Maybe larger concerns are better at subsidy exploiting than small, because they’ve economy of scale advantages in pursuing subsidy exploiting, but that’s about it.
    Wouldn’t surprise me. How much economy of scale is there in house building? The larger house-builders just impose another layer of costly management on top of the basic unit of builders getting their hands dirty, building houses. It’s probably more an advantage of being able to access money easier, than anything else.

  17. Jim
    Please correct me if I’m wrong, but farm price is about 30% of shop price. So there’s a deal of efficiency to be made between farm and shop.
    UK not much better than Africa at that level, Africa only wasting about half its food.

  18. “I thought (happy to be corrected) that the main effect of agricultural subsidies was to increase the value/rent of agricultural land.” Yup, though the last time I said that here there were some shrieks of outrage. Christ knows why.

  19. “I thought (happy to be corrected) that the main effect of agricultural subsidies was to increase the value/rent of agricultural land.”

    Subsidy certainly increases the rental value of agricultural land. Landlord knows the tenant will be getting c. £80/acre just for holding said land, and he wants most of it, regardless of the productive capacity of the land. Capital value is a moot point – the value of land is now far in excess of the productive capacity, mainly because of people wanting to stick money made elsewhere into land. You couldn’t finance land at £10k/acre from the agricultural output alone. Most land is now purchased for cash. So while subsidies do increase the capital value, we’re well beyond that point for other reasons at the moment.

    “Please correct me if I’m wrong, but farm price is about 30% of shop price. So there’s a deal of efficiency to be made between farm and shop.”

    Indeed, but thats nothing to do with farming or farm subsidies. It entirely down to the food processing/retailing industries. They all make significant profits, far more than the producers do. Farming as a whole makes c. £5bn in profit per year, and that includes the subsidies (£2-3bn). Tesco was at one point making £4bn on its own (less now of course). There’s not much meat left on the bone in farming TBH.

    “But if Small Farmer A and Large Farmer B both achieve the same profitability per acre……then surely, Large farmer B will be significantly better off after the big fat subsidy cheque arrives from the EU?”

    Yes, but the cost of production will be largely the same for each, so from the point of view of the consumer it doesn’t matter if production comes from ten 100 acres farms or one 1000 acre farm. The price of the output will be roughly the same. There’s little economies of scale between the two. Some, but not much.

  20. Thanks for your helpful response, Jim. I still think that halving (purely as an example) the rental value of land would halve its capital value, since purchasers will still seek their desired rate of return. It may not be comparable with (e.g.) purchasing an office block as an alternative, because of tax treatment, but the argument still stands.

    If It’s true (as we’re often told) that it costs a typical dairy farm 30p to produce a litre of milk that only fetches 25p at the farm gate, that situation can only be sustained by subsidies, and if they ceased, farmers would have to charge more or go out of business (and we’d have no milk in the shops).

    Lastly, there may be some advantage for large farms in that although there’s significant bureaucracy involved in getting all those lovely EU subsidies, I imagine that it isn’t much different if you’re farming 1,000 acres of wheat than it is for 100 acres.

  21. Jim said:
    “There aren’t that many economies of scale in agriculture once you get passed the peasant stage”

    From what I’ve heard, I thought that was true 10 or so years ago, but not any more, thanks to more sophisticated kit being invented?

    Article in the Spectator last week about James Dyson’s farms, where he’s got self-driving tractors directed by satellite that squirt the right amount of fertiliser onto different parts of the field (or something like that). Think that’s needing a lot more than 100 acres to be cost-effective (probably more than 1,000 acres).

    Probably still true that there’s not much economies of scale for sheep (not much automation there), nor for dairy beyond a minimum (robotic milking machines do a herd of 50, so about 100 acres – is that about right?), but I thought the increasingly sophisticated (and expensive) mechanisation of crops was making economies of scale important again.

  22. ” but I thought the increasingly sophisticated (and expensive) mechanisation of crops was making economies of scale important again.”

    You got the important word in there – expensive. Yes, there is starting to get new kit out there that can increase output/reduce costs by use of satellite technology etc, but it is very expensive. So expensive you have to be farming huge acreages to justify the cost. And one suspects the overall cost of production of such a farmer is not much lower (if at all) than a farmer who does all his own labour with old secondhand machinery on a small acreage.

    There are two sorts of farms – the ones full of shiny new equipment, all of which costs a fortune and the cost of which has to be spread over thousands of acres (Dyson owns over 20k acres I think), and the small ones that make do and mend with old kit. Their overall COP will be pretty similar. Of course you can’t farm 20k acres with old kit it would be practically impossible. An operation of that size and complexity needs new reliable machines (not that new machines are always reliable, some are dogs right out of the factory, but at least they’re covered by warranty).

    But the point is that the overall COP from the top to the bottom in farming is not that different. Variable costs are high, and fixed costs are low. And the fixed costs can inversely vary with size – a small farm can have very low fixed costs through use of cheap secondhand machinery, while a big farm can only be operated with large expensive machinery.

    There is a reason why there’s still about 150k individual farm businesses, and not a few dozen massive agri-businesses covering the whole country (as there are in many other business sectors), and thats because the economies of scale in agriculture are not that high. They do exist, and there is a slow tendency for farm size to rise over time, but its a slow process as the benefits of getting bigger are not massive.

  23. Pre-joining the EEC, the UK imported lots of food from the Commonwealth (and other places, including the EEC) so that food was cheap and subsidised hill farmers because they were deemed a “Good Idea” and also ensured that foreigners did not imagine that they could screw us by doubling the price of meat or wheat. EEC said subsidising hill farms discriminated.
    Once we have left the EU, what is to stop us subsidising farms that need it but not the ones raking it in? Answers on a postage stamp, please.

  24. Jim,

    A question for you; you talk about farm size, but I was always under the impression that it was field size that mattered with regard to gaining such economies of scale as were available given a level of technology.

    Assuming that’s correct, then you only get large farms with large fields and decent kit, in areas where the physical geography, existing land use patterns, and the like, fall right.

    Also, AFAIK, an awful lot of smaller farms don’t have very much machinery at all; they rent it when needed, either from specialist outfits, or from neighbours.

  25. “I was always under the impression that it was field size that mattered with regard to gaining such economies of scale as were available given a level of technology.”

    Generally speaking, large farms will have large fields, and tend to be arable farms, and small farms will have small fields and tend to be livestock farms. So the field size will have developed to match the type of farming. Machinery intensive arable farming will have ripped out hedges in the 50s, 60s and 70s to create bigger fields, more labour intensive livestock farms will have had less incentive to do that.

    You are right, particularly with regards to arable farms, the bigger the fields, the easier it is to use large kit, and thus take advantage of what economies of scale exist. But in arable areas, most of the field enlarging has already been done. So while you are now forbidden to remove hedgerows, the fields are large enough already to allow even the biggest kit to operate relatively efficiently. Drive along the M4 through the Berkshire and Wiltshire downs, big cereal growing areas, and you will see the size of the fields is pretty large, certainly large enough not to restrict efficiency that much. Yes there would be some gains if we could turn the south of England into a prairie, but not that much of a gain. The same variable costs apply to a 1000 acre field as to a 10 acre one.

  26. “an awful lot of smaller farms don’t have very much machinery at all; they rent it when needed, either from specialist outfits, or from neighbours.”

    This is sort of right, but not exactly. Many small farms, particularly livestock ones, use contractors to do some of the operations that are quicker with larger machinery. Silage making is very often done by contractors, its almost as cheap, and probably quicker than owning smaller versions of the machinery yourself. But small farms very rarely hire machinery to use themselves, its usually comes with the labour of the contractor as well. Not least because as anyone who does hire out farm machinery will tell you, no-one looks after hired kit, it usually comes back knackered in some way.

    There will also be some sharing of equipment between neighbours, but its very ad hoc, there is not a great deal of history of co-operation between British farmers, they tend to plough their own furrows, both literally and metaphorically speaking. Co-operatives are far more common on the Continent, in the UK they have never been that popular or successful.

  27. Thanks Jim.

    “Machinery intensive arable farming will have ripped out hedges in the 50s, 60s and 70s to create bigger fields,”

    That’s obviously what my 1980s geography o-level was getting at.

    Yeah, I did assume that kit hire came with the operator, but didn’t actually write it. The livestock farming bit is interesting, as after posting, I couldn’t figure out how you could create an EoS for dairy, in particular. How could you get cows to trot at 10mph down the lane to be milked and back?

    (As an aside, the other half got talking to some Russians a couple of years ago, general gist was that they can’t get beef production up due to the harsh winters, whereas in the UK, we can get twice the rate of calving as the weather is no where near that extreme.)

    I didn’t mean that they were necessarily sharing kit. More that round our way, we’ve got one guy who has one field with sheep, and one field with alpacas, and one barn.
    The barn has that (I think) kit he inherited from his Dad, so come the right time of year, he makes a decent extra wodge lending it out. Another guy has mainly sheep, but also some arable, but does a lot of land and woodland management throughout the year. I was wondering if that general pattern would repeat nationally, where a decent chunk of the smaller farmer’s income doesn’t arise directly from their own produce, or subsidy due to that, but from related agricultural activities.

    But of course, that’s not the post wot I actually wrote.

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