The total incomes made from British farming – and this includes subsidies and higher prices from trade restrictions – are around the £5.2 billion mark. There are some 17.6 million hectares of farmland out there. Simple division tells us that the income to be gained from farming the one hectare is around the £300 mark. The UK median salary is now a shade over £30,000 a year, so you’d have to farm some 100 hectares – 250 acres in real measurements – to reach just the average.
Small farms simply do not adequately fulfil the purpose of any economic activity, which is to provide a worthwhile living to the person having to do all the work.
Jim would know far better than I how skewed the quality of farmland is, but I’d suggest that 100 ha of prime Lincolnshire land could provide a reasonable living (although most of the farming estates there are better measured in km²), whereas given 10,000 ha of moorland in Caithness you might struggle.
“Countryside stewardship” maintaining flower meadows and mixed broadleaf stuff would also benefit from scale economies. We don’t need a steward for every 70 acres (that was the average size of a Somerset dairy farm when you were a lad, Tim). In the glory days of feudalism the Lord’s steward (reeve) would manage over 1,000 acres on average. (Size of a rural parish? Google no help).
Silly question, but if a farmer has 750 acres then allowing for paying some wages he’s twice as well off as the median salary, so why should he be subsidised at all?
It’s worse, isn’t it? £300 per hectare here looks like it represents gross income, not profit. Profit – on which you then pay tax – would be a better comparator to wage income.
It wouldn’t surprise me if the economic size was over 800 acres.
Anyway, had a look. Parish sizes round where I grew up: 323 acres, 805, 830, 1853, 2489.
Very mixed due to history I suppose.
Indeed so. But with a nice government report why not cut the statistic to fit?
Chris Miller
That ain’t the half of it. You can make a handsome living with five hectares if you stick it under glass or polythene, are within the Fens or South Lincolnshire and are happy to grow specialist flowers or vegetables – no subsidy on those.
100,000 acres of Sutherland, on the other hand, is better than 200,000: you’ll lose less money.
If you look at land values around here an acre is worth 9-10k So you have to invest over £2m to get a gross profit of 30k, not exactly a stunning return given you are probably working at least 40 hours a week as well
umm.. I think a farmer (beasties or plants) would sign up for an 80 hour average work week… He may even get a day off here and there then… 😛
And there’s missing date here… which crop exactly are we talking about here? And which farming/harvesting method with which equipment.. and..
” Simple division tells us that the income to be gained from farming the one hectare is around the £300 mark.”
But that will include subsidies, both direct agricultural ones and environmental payments. Which would represent virtually all that £300/hectare. Farming in the UK is marginally profitable, without the subsidies vast swathes of the UK are just not worth farming. Its the consequence of producing a internationally traded commodity in a country that is predominantly a service economy. The prices received at the farm gate fall in real terms over time, because they are directly linked to international commodity prices, which tend lower over time, while the costs rise over time because they are based on the ever inflating UK economy. Most farmers probably don’t make minimum wage for hours they put in.
Farm incomes (they mean profit really) have been in the £4-5bn per year range (give or take a billion) for as long as I can remember, and the majority of it has always been subsidy. Occasionally international prices rise (or the pound falls) and there is a decent year, but largely the industry’s income stagnates, being eroded by inflation all the time. The only way farmers can increase their profits is by farming more land. There’s no way to increase them much while farming the same acreage.
Basically if a large wealthy service based economy wants its countryside managed its going to have to pay for it. There just isn’t the profit to do it from the profit that farming can make in a country like the UK.
Don’t produce commodity crops?
“Don’t produce commodity crops?”
Commodities are what people eat. Grains, meat, dairy products and fruit/veg. Yes there are other niche products, and niches within the commodity production, but thats what they are, niches. Everyone can’t do it or the market for that specific thing would be saturated. If every farm had a farm shop selling expensive meat, veg and the like there wouldn’t be enough trade for all of them. If every farm had a caravan/camping site the profit from that would be minimal as competition would drive the price you could charge down.
There’s 40 odd million acres of farmland in the UK, there’s a limit to how many free range eggs, camp sites, holiday lets, weird and wonderful crops, organic produce etc etc that the market will sustain. The market for expensive niches is small, the mass market for cheap food is huge. If the mass market is supplied from abroad then there’s not enough demand left for all that land to be used productively.
Years ago I read someone who recommended that British farms be combined and run as ranches. That means less attention to each beast but much less work involved. OK for beef and sheep I suppose but no use for a dairy herd.
Can you get a premium price for grass-fed beef? On the high ground you could run deer ranches. The bloody deer are there already (but presumably are prone to be diseased?). How about importing kangaroos/wallabies that flourish in the Aussie mountains? They might be easy to ranch: I can vouch for the meat.
Anyhow, some thinking and experimenting will be necessary – it’s no use digging your heels in and saying “I don’t want to change”.
Turn over the land to higher value uses. Or at least allow it and let the market decide if the new use survives.
I would love it if in my lifetime rich Kenyans came to Scotland and drove round estates in Solihull built 4*4s watching red deer being taken down by a pack of wolves.
Currently not permitted.
But rich Brits are allowed in normal times to go to Kenya and watch their lions take down a wildebeest. It makes no sense.
I dunno about it being no use for dairy these days: there exist fully automatic milking machines that Bessie et al can wander into at anytime that takes their fancy, which actually produces a higher yield than milking at set time of the day. Dot those at strategic points across the range and Robert’s your mother’s brother
Don’t like the thought of things roaming the countryside that might want to eat me, Bongo. So I wouldn’t bring the wolves back. Of course if I was a Kenyan, I’d shoot all the bloody lions too.
But apart from that, I’d say the only real argument for subsidising farming is that the foreign turds might decide to cut off the supplies. Having been a young bloke at the time of the oil crisis, I naturally believe that all those scum are out to GET me. Proof to the contrary merely means that the lies have become so subtle and widespread that the situation is utterly dire.
But as I live in Oz, the only real problem we have here, apart from the morons in PETA, is the lack of foreigners to come here and do the work of picking the crops. And of course this is caused by the lockdown maniacs in power.
If I wasn’t so bone idle, I’m sure I could work out why the lockdown louts are a sinister foreign plot. But at least that explains why I’m not out bringing in the sheaves, eh.
That’s pretty much the argument I’m making – and yes, I say my numbers include subsidies. Small farms never are going to be economic. So, why subsidise them?
Is it not all skewed by farmland being exempt from inheritance tax. Sod the annual return just look at the capital value.
“Years ago I read someone who recommended that British farms be combined and run as ranches. That means less attention to each beast but much less work involved. OK for beef and sheep I suppose but no use for a dairy herd.”
And a useless concept in a country in a small densely populated country like the UK. Ranches in other parts of the world are measured in tens or hundreds of square miles. Uk land is measured in square meters. Plus of course the law doesn’t permit ranching – you can’t just leave animals unattended to give birth etc, you’d have the animal rights people on you in a flash. Nor can you just leave the wild animals to dispose of the (inevitable) dead carcasses. All animals have to be tagged at all times, which means collecting them at regular times to check and replace lost tags, and also have to have regular TB tests too. Collecting animals spread over tens of thousands of acres every month is not going to be any cheaper than farming them in small amounts. Hence my point – the UK is far too regulated to farm in the way that is allowed overseas.
“Can you get a premium price for grass-fed beef? ” Maybe. But there’s only a small demand for that, and its already supplied. If everybody did grass fed beef there’d be no premium. A huge amount of UK beef is grass fed anyway, and it gets no premium.
” On the high ground you could run deer ranches.” And the demand for venison is? Virtually zero. I have wild deer running all over my place, if you shoot one its worth bugger all. There are deer farms now, they are filling the demand for venison.
“I dunno about it being no use for dairy these days: there exist fully automatic milking machines that Bessie et al can wander into at anytime that takes their fancy, which actually produces a higher yield than milking at set time of the day. Dot those at strategic points across the range and Robert’s your mother’s brother”
And how exactly is Bessie going to cross the M4 to get to her closest milking parlour? The UK is crisscrossed with roads, and animal owners have the legal responsibility to fence their animals in. And on top of that there’s public rights of way everywhere, and animal owners are legally liable for their livestock’s actions. You can’t just leave them to run wild over thousands of acres.
“Small farms never are going to be economic. So, why subsidise them?”
Because everyone needs to eat, and despite what you free trade fanatics say, getting everything from abroad may not always be possible. So paying the domestic industry to keep going rather than reverting to scrubland might be a wise move in the long run. Given the cost is probably less than the NHS spends on paperclips I’d say its a decent return on the cash. But what do I know? Its sensible to spend hundreds of billions on a trainset no-one wants or needs, but £3bn/yr to guarantee some sort of food production industry in the Uk is an unaffordable expense.
‘Small farms simply do not adequately fulfil the purpose of any economic activity, which is to provide a worthwhile living to the person having to do all the work…’
In a nutshell that is the problem with France’s economy. The rural population and economy is still a large part of France as a whole. Thanks to protectionism, subsidy from the CAP, France rurale has been preserved in the 1950s. Inheritance laws, drift from the land by the young to the cities, has left a lot of small farms on poor land, uncompetitive with bigger farms in France and the wider World, barely surviving except on subsidy.
Consequently, food prices are high in France, unemployment is very high in the countryside where up to three-quarters of people get more back from the tax system than they pay in.
Since subsidy + tourism has hitherto prevented collapse of the rural economy, and tourism having been absent for a year, it is not looking good.
And not helping farmers at all… the Government forbids stores to offer Bogof on food items and only one or two food items may be discounted at any one time – but we must all have 5 a day. This is to stop the ‘obesity crisis’ – yes, France has that too.
One thing you can do is combine subsidies with an expectation of part time work. This is more or less what happens in Japan where many farmers have a second job (or perhaps more accurately in most cases, where farming their pocket handkerchief of land is a second job).
I don’t know all the details of how this works – and it is worth noting that very few younger Japanese seem willing to join their fathers in the part time farming role – but it is an alternative that might work.
“Consequently, food prices are high in France”
That doesn’t follow. We have had subsidies in the Uk since the war, and the same subsidies as the French since we joined the EEC/EU, and our food prices are some of the cheapest in the world. Ergo its not subsidies that are the main factor driving higher food prices in the shops. If anything subsidies drive prices down, by keeping the marginal producer in business and artificially increasing supply. There must be other structural issues within the French economy resulting in higher retail food prices.
I’ve always said that agricultural subsidies benefit the food processors and retailers more than the producer, as they benefit massively from lower raw material costs caused by overproduction.
Some confusion between median and mean?
But as I live in Oz, the only real problem we have here, apart from the morons in PETA, is the lack of foreigners to come here and do the work of picking the crops.
The mice are picking the crops, perhaps due to the morons in PETA . . .
Because everyone needs to eat, and despite what you free trade fanatics say, getting everything from abroad may not always be possible. So paying the domestic industry to keep going rather than reverting to scrubland might be a wise move in the long run.
Yes, keeping our oar in gets my vote. There won’t be enough economists and economics wags to eat if the shit hits the fan.
Plus, Britain, France and much of Europe is beautiful and well tended overall. The countryside in Russia looks as much of a shithole as the towns and cities.
“Plus of course the law doesn’t permit ranching” You’re missing the point – there’ll have to be changes made. Safari trips to go beaver-hunting on the Tay, stalking water buffalo in the Flow Country, and on and on. You chaps can’t go on pretending to make a living off scraps of land that would be reckoned smallholdings in the parts of the world that produce cheap food.
A few genetically modified water buffalo might be just the thing to bring some prosperity to Caithness and Sutherland. Rock wallabies for the Peak District? North American bison for the Outer Hebrides? (Actually there are already reindeer in the Grampians – so permit stalking of them.)
“reverting to scrubland”: ‘scrubland’ is a propaganda term for immature woodland.
” You’re missing the point – there’ll have to be changes made.”
But there won’t be will there? The middle classes aren’t going to allow farmer Giles to ranch wild beasts across the Cotswolds. And they will be wild, cattle left to their own devices revert to a far more feral state. Farming on a small scale with plenty of human input keeps them reasonably tame. Leave them out on their own all year round and they’ll be pack animals who’ll trample anyone who gets too close. Plus the animal rights brigade aren’t going to allow free range cattle, giving birth unaided (and thus dying rather horribly if it goes wrong), getting ill and dying in the most awkward places (livestock always die where the most people can see and it causes the maximum embarrassment). What goes on in the Pampas of Argentina and the Australian Outback is not going to be allowed in the overpopulated UK. When its pissing down with rain in January and the ground is a sea of mud, and cattle are standing around in something akin to the Somme do you think the likes of the RSPCA et al are going to say or do nothing? Farmers get complaints from the public now if livestock are so much as left out in the rain (‘Poor things looked so cold and unhappy!’), you’re living in cloud cuckoo land if you think ranching would be allowed in the UK.
This is the thing. If you allow unfettered cheap food into the UK from abroad, and don’t subsidise Uk producers to allow them to compete, farming will largely die. It won’t be allowed to use the methods and techniques that the foreign producers do, because while the public want the cheap food they don’t want to see the reality of how it is so cheap. So they’ll vote for people who stop the UK producers doing ranching, or genetic engineering, or ban chemicals etc etc, but quite happily eat food produced abroad using those methods. They are I’m afraid utterly hypocritical.
Thank you Jim, that was the most instructive -and entertaining- thread I’ve read for a while.