Tuesday, 9 July 2019

"We could be wiped out like the coal industry"

From the BBC:

Some farmers have said without long-term guarantees about future subsidy levels, farms could disappear from the landscape.

"We could be wiped out like the coal industry," said Roger Hobson, whose 4,500-acre farm near York qualifies for a subsidy worth £100,000 a year.

"What we fear is that in the future the farm industry will have to go to the government and compete for funding alongside the NHS and other public services."


mombers said...

I wonder how much mortgage interest is paid on farmland? Probably around £3.5bn?

Edward Spalton said...

Well, I remember the Labour Minister of Agriculture “ Junket Jack” Cunningham. He was widely reported as saying
“ I am really looking forward to doing to the farmers what the Tories did to the miners”.

Today the problem is uncertainty. Back in early 2017 I was pressing my MP that they should decide what to
do about sheep,- 40% of which is exported to the EU and will cease to be viable if they face the EU tariff.
The government still can’t tell them. If they had worked out their plan two years ago, farmers would have had
time to adjust.

Before the EU we had a system which suited us very well. Food products could come from all over the world without
tariff but our own production was supported by “ deficiency payments” to ensure food security. WTO rules don’t
permit that now.

Then there is a strong possibility that farmers will face competition from the other countries where standards are
not so high and methods are used which are illegal here.

Of course, other businesses are in similar uncertainty and unpreparedness. I am told that only 40% of export businesses
have applied for the indispensable EORI number. Many have not yet realised that they need to appoint agents
on the other side where the invariable EU rule is that the first importer takes responsibility to the EU authorities
for compliance of goods. The representative must be an EU resident individual or company.

On joining the EEC our animal feed mill received intensive detailed advice from the government for a year beforehand.
Now, I don’t think they are nearly as well prepared - and it’s three years since the referendum

Dinero said...

The first importer takes responsibility for compliance. That importer could actually be a UK firm set up as an EU resident company, liasing with a multitude of of UK exporters, for the purpose of facilitating the sale of UK goods in the EU.

Mark Wadsworth said...

M, you work in finance, you tell us :-)

EdS, not having a plan is part of The Plan, i.e. "we can't leave because we don't have a plan."

As to farm subsidies, I watched a TV programme about UK farming since 1945 and one more honest farmer cheerfully admitted that their success or failure depended largely on what the government did or was willing to pay. Which is fine by me, food is very important. But let's not just nationalise the costs and privatise the gains, which is what you get with landowner subsidies.

Din, the problem is, how much paperwork will the other country make the UK exporter fill in before he gets the EORI number..?

Edward Spalton said...

The Liberal governments from 1906 more or less wrote off British agriculture in their doctrinaire free trade mindset, so that an official of the then Board of Agriculture could write "British agriculture is dead and it is our job to provide a decent funeral".

Even with the largest navy and merchant marine in the world, that turned out to be a bit risky , as Kipling put it around the same time -

"For the bread that you eat and the biscuits you nibble,
The sweets that you suck and the joints that you carve,
They are brought to you daily by all us Big Steamers
And if anyone hinders our coming you starve".

That turned out to be rather prophetic in WW1 . After the repeal of the Corn Production Acts in 1921, policy went back more or less to the pre war status until the encouragement of home production in the run up to WWII and the massive ploughing up campaign of the war years.

The Labour Agriculture Act 1947 was a very imaginative piece of legislation. Unlike almost every other country in the world, no tariffs were charged on food imports, thus keeping prices down for consumers but home production was encouraged by direct subsidies, settled each year in an annual price review under parliamentary scrutiny. Land would not be allowed to go back to rabbit runs and dog and stick farming, as had happened in the inter-war years.

When we joined the EEC we ditched our reasonably priced Commonwealth suppliers and entered a "fortress Europe" type of siege economy where non European products were kept out by high tariffs and prices were guaranteed by the EEC becoming a buyer of last resort at prices to keep European peasant farmers from turning Communist. The late great Sir Emrys Jones, who had been head of the Agricultural Advisory Service, did a great job in getting us all switched on to making our livings in the highly bureaucratic new system and then resigned. He had been profoundly opposed to the whole business but we did not know until afterwards.

In the debate of 1975 on the Agriculture White Paper, Margaret Thatcher ( then a Europhile) put the position as follows " We are the most vulnerable country with our need for food imports. Therefore it is vital that we secure access to continuous and good sources of food supply. In some years supplies from the continent will be more expensive; in other years they will be cheaper . But the great benefit is access and greater stability of supplies". In fact the supplies from Europe were always more expensive.

I did not find the source of the ideology behind the European Common Agricultural Policy until 2002 - in a series of German papers entitled "European Economic Community" - published in Berlin in 1942.I translated two of the papers
which can be found by Googling "Edward Spalton Witness to History" . The witness is actually Lord Walsingham who was in the Foreign Office in 1950 (video about 35 minutes) . I am th scribe. The translations of the papers and a short article on agricultural policy are also linked.

Dinero said...

There is no other country. The single market is one country for goods. the paperwork can be handled by the UK to EU wholesaler thus creating the convenience of the single market.

Mark Wadsworth said...

EdS, you mean people like Walter Hallstein?

Din, we are talking about post-Brexit rules.

Edward Spalton said...

The papers I translated were by Professor Doktor Henrich Hunke ( who was the conference organiser. He was a key advisor to German industry and Economic Adviser to Dr. Josef Goebbels in his role as Gauleiter of Berlin

and Reichsminister for the Economy Walther Funk , who was also President of the Reichsbank and Minister for post war planning.

These two were definitely in the top echelons of the Nazi government and were involved to the very end of the war. There is a note about their carers in the introduction to the translations.

Professor-Doktor Hallstein (first President of the post war European Commission) was not a Nazi party member but, as an academic, made contributions to the debate about harmonising the legal system throughout German-controlled territory.(I have a speech of his from early 1939). He was promoted academically but was called up, reaching the rank of Oberleutnant. So he was not a "senior Nazi" as some have said but undoubtedly his ideas were influential both during and after the war. By 1965 De Gaulle was thoroughly fed up with him!

Mark Wadsworth said...

EdS, Funk went to prison after 1945 at least, Hunke got away with it.

All gloriously embarrassing for the EU, if they had any shame, that is...

Edward Spalton said...

They both ended up in Hanover, Lower Saxony circa 1957.
Hunke was in local politics and eventually became a senior official in the provincial government. He was also involved in an "educational" institute where (I believe) Funk was busy promoting the European idea.

When we went on a school trip to Hanover in 1958, our German contemporaries were already "on message" with regard to the EEC. My host asked "Have you heard about our Wirtschaftsgemeinschaft (Economic Community)? It will guarantee our living standard". Several others remarked that their hosts had used the exact same phrase. This, I think, was the long arm of coincidence.
See my intro to translations.

Physiocrat said...

Without subsidy, the margin shifts. The worst land goes over to other uses, probably forestry or recreation, or is abandoned. Rents fall on all other land.

All the arguments for keeping uneconomic agriculture going apply to coal. One might equally well argue that fleets of steam locomotives should be built and coal mines reopened to supply the fuel.

Dinero said...

> Mark
To remove the inconvenience from the EU importer and assist the UK exporter, a new type of firm originating from the UK could establish as an EU resident firm, liaising with a multitude of of UK exporters and EU importers taking on the task of importation compliance.

Mark Wadsworth said...

EdS, very telling.

Ph, not really. The mix of inputs will change to using less land and more labour or capital for a given unit of produce. Output won't change.

Din, yes, a glorious paper shuffling job. I'd quite fancy it.