Saturday 10 March 2012

Panodrama

Have just caught up with all of the fuss around last week’s Panorama documentary – The Money Farmers - about the “scandal” of EU farm subsidies ending up in the pockets of speculators and the very rich and being denied to young new entrants to farming.

There have been lots of commentary post-viewing from interested parties who invariably start by saying that the programme “misses the point” and then go on to completely miss the point themselves. So, for what it is worth, here is my view.

Firstly; any non-farmer who buys up an entitlement to subsidy still has to rent enough land to attract the payments and then has to keep this land in good condition. The “good condition” rules are there to make sure that no subsidised land is actually causing a problem and actually intensive farming can be a real risk to pollution and loss of wildlife - in some cases, without doubt, the less “farming” done the better for everyone.

Secondly; the likes of Her Majesty and the Duke of Westminster attract massive payments simply by being massive landowners. Their respective holdings employ any number of farmhands, managers and gamekeepers, and the new EU rules proposed for 2013 will limit their total cheque anyway. I trust and hope that they and others will not seek to rearrange their businesses to avoid/evade the new rulings when they come in.

I am more concerned with the plight of the young farmers who start out with no entitlement to subsidy.

Now that our payments are no longer tied to animals or crops we should all take a hard look at our farms and only produce food that actually makes sense financially. If, as most farmers seem to do in the film, we use the land payments to “subsidise” the produce we sell to Tesco and the like, then we are merely adding to their profits and creating a market where new entrants cannot possibly compete. Supermarkets need to pay a price which reflects the true cost of production, and as we can all see from their massive balance sheets this need not necessarily mean a rise in the cost of food.

The real scandal is that most of the payments end up in the pockets of the supermarket shareholders and there is then no incentive to pay farmers a price which will enable youngsters to enter the industry. While these payments last, we would all do well to treat them as the speculators do – as a detached investment - and allow market forces to put UK farming on a sustainable footing.