Monday, 14 June 2021

Ignore the smokescreen, our farmers need to stop bleating!

 


No wonder the Aussies call us whingeing Poms - and I'm not talking about cricket.
Over the last few weeks, there has been a steady chorus of professional mourners bemoaning the demise of the country's agricultural sector. 
The spectacle of the mourner-in-chief Minette Batters, president of the National Farmers' Union, has been especially theatrical. But then, she's been joined in the self-serving wailing and gnashing of teeth by various politicians, most notably in the non-English 'nations', with vested interests in supporting the present status quo. 
Remember, these are the very same people who proudly boast, at a moment's notice, and whenever there is a scandal to refute, that our farmers are the most successful, innovative, ethical, etc. etc. in the world.
So why the widow's weeds act from Ms Batters and her ilk? 
Because the Johnson administration looks likely to secure a free trade deal with Australia, that's why.
Freed from the corruption and perversity of the Common Agricultural Policy and other European Union food schemes, the Government is rightly rolling out its ambitions, via bilateral trade agreements, for a reduction in tariffs and quotas. And freer trade - for this is the guiding philosophy - means there are no, forgive the pun, sacred cows. 
Agricultural exceptionalism no longer applies. Hurrah for that.
Free trade is a philosophy with which I wholeheartedly concur. Why? Well quite simply, free trade is the best economic system for ensuring the best products and prices for consumers. Tariffs and quotas are not only nice little earners for the state, they also needlessly push up prices and hurt consumers, especially the poorest.
Although the trade deal with the EU was not perfect, as protectionist measures remain in place across a range of sectors, it was an important statement of the Government's intent to progressively whittle them away to the bare minimum.
The proposed Australian:UK free trade deal follows suit and points to a positive template for future, larger deals. And it is the prospect of reducing tariffs and quotas, hopefully to zero, hat has got the usually bullish, another pun, NFU crying foul (sorry!) about the prospects for beef and sheep producers in this country.
At the outset, it's important to note current trade between the two countries is rather miniscule. In 2019-20, the trade in goods and services was valued at a little over £20bn with metals, wine and machines the main Australian exports, and cars, medicines and alcoholic drinks topping the list from the UK outwards.
Trade in meat between the two countries is fractional (with 0.15% of all Australian beef exports going to the UK and 14% of sheep meat imports to the UK coming from Australia), so the scare stories put around by the NFU and others of ten-fold increases in Australian meat exports to the UK need to be contextualised from these very low starting points.
Secondly, as currently drafted, the free trade agreement will be implemented over a 15-year grace period. 15 whole years! In business terms, that is incredibly generous in allowing UK meat producers to develop and enhance their offering.
As has been shown over the last 12-months plus of COVID19-related economic disruption,  efficient and innovative businesses can reinvent themselves over a far shorter period of time. It would appear that some UK farmers are quite happy with a producer-rules rigged market and just don't want to put in the effort.
And the effort is surely worth it? As international trade becomes freer, so does the importance of each country's comparative advantage over others in those sectors in which it has a presence.
If the quality and standards of UK farming really are better than elsewhere, this provides an excellent narrative, especially when backed by some decent marketing, for selling into Australia and other markets. As the chairman of the House of Commons Environment, Food and Rural Affairs Committee suggested, UK farmers could succeed in the beef market by exporting more premium cuts, such as sirloin.
The Trade and Agriculture Commission endorses this strategic opportunity seeing: "opportunities to increase food exports to new markets and wants the government to facilitate this process. UK food exports have a reputation for quality......These qualities need to be protected and promoted by improved cooperation between government and the food industry."
Of course, all this professional outrage about free trade deals is a useful smokescreen for the likes of the NFU as it lobbies for UK agriculture to be as subsidy-guzzling as its EU counterpart, albeit with more of an emphasis on 'public money for public goods'. Whilst we were in the EU, 87% of UK farming income came from subsidies.
I'd like to see such state handouts phased out sooner rather than later in order to lower prices and efficiencies. New Zealand showed the way in the 1980s, when it was clear that the prevailing farming subsidies were leading to over-production, sky high land prices, over-use of fertilisers, wasteful practices, and a lack of innovation.
To the credit of that country's agriculture sector, the almost overnight cessation of subsidies saw farmers becoming sharper and smarter at all aspects of their work, from product quality, through cost management, and onto marketing.
New Zealand's lamb sector is an international success story as a result. British farmers need to put the consumer first, kick the subsidy drug habit and quite frankly, stop bleating. 



First published in the www.suffolkfreepress.co.uk & www.dissexpress.co.uk on Friday, June 11, 2021.


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