subsidy

Farming in the UK – the size and the subsidy

Nan Smith writes about her observations on the pitfalls and benefits of farming subsidies in the United Kingdom.

On a recent short visit to the United Kingdom (UK) I had the good fortune to cast my eyes upon the agricultural landscape of parts of rural England through the windows of various warm and comfortable trains.

The English countryside is lovely, even in the depths of winter. Grassy fields, cultivated lands and woodlands are stitched together by hedgerows in a patchwork of splendid greens – a visual treat to African eyes grown lately accustomed to hues in the brown and yellow range of the colour spectrum.

Significant volumes of rain have fallen in England if the number of waterlogged fields, dotted with what must be a very hardy breed of sheep, are anything to go by. The topography of eastern and southern England is generally pretty level or gently sloping – easy for land preparation, but maybe not so good for drainage when it’s as wet as it is this winter.

Fields are newly planted to a grass which I assume is Spring wheat, but I am no crop expert and the trains move fairly fast.

THE SURPRISING SIZE OF THE AVERAGE ENGLISH FARM

Observation is a pleasant exercise from my comfortable seat and I drift along with the train looking out at farms, and thinking about agriculture in general, when a bell rings in the dark recesses of my brain. I jolt out of my agricultural reverie. These farms are small.

I write for African small-scale farmers – farmers who are constantly advised, and even admonished, to achieve economies of scale. And, sensibly, there is no real argument with the rationale that says small-scale farmers must join forces, in groups and co-ops, to benefit from stronger buying power, shared machinery, pooled technical knowledge and skill, logistics and trade and marketing platforms.

But this is England, part of the developed world, with a developed economy and a developed agricultural sector. Shouldn’t the farms be bigger? As it turns out, no.

Wikipedia tells me that the average size of farms in the UK is 57 ha, which is bigger than the average 16.1ha for farms in continental Europe. British magazine Farmers Weekly puts the average size of a UK farm at 81 ha, considerably higher than the rest of Europe including France and Germany.

And from these largely small farms come roughly 54% of Britain’s food, and an annual £11 billion worth of exported agricultural products. Makes one wonder why Africa’s small-scale commercial farmers should not be able to supply more of the continent’s food needs at fair prices that make it worthwhile for them to farm?

SUBSIDIES CUSHION BRITISH FARMERS

Part of the reason for this is that UK farmers, unlike African farmers, are subsidised through the European Union’s (EU) Common Agricultural Policy (CAP).

Payments are based on:
i) The area of land farmed and
ii) The landowner’s efforts to improve the environment. Environmental improvements would include maintenance of wildlife habitat, conservation of grassland and wetlands, improvement of soil structure and so on.

Through CAP between £2.5 billion and £3 billion a year is paid directly to British farmers. Simply put, these farmers earn money that is in no way connected to their ability to farm productively or profitably.

Then too, farmers are indirectly subsidised through CAP funding to the tune of £4 billion, which is available for rural development projects during the period 2014 to 2020.

According to a reputable British newspaper, The Telegraph, (20 June 2016) CAP makes up 55% of UK’s total income from farming. Apart from the subsidy, the British farmer benefits from unrestricted, tariff-free trade in the EU.

Also read: Command agriculture and the politics of subsidies

WHAT LIES AHEAD FOR BRITISH FARMERS

The massive advantages of free trade in Europe and the CAP subsidy will come to an end with Brexit – or at least to some kind of end.

Predictably, the British government is already making reassuring noises to farmers about a new kind of subsidy (after the 2-year Brexit transition period) more strongly connected to the wise custodianship of rural landscapes.
Healthy ecosystems benefit all citizens and linking sound environmental management to state-sponsored financial incentives for farmers is a positive development. No right-minded person could knock that.

But paying farmers substantial amounts of money, season after season, with no requirement to farm productively is puzzling, and possibly unrealistic when this money comes from 1 lone government.

And listen to this: “Removing CAP support [in Britain] while it remains in place in the rest of Europe could devastate British farming,” Meurig Raymond, President of the National Farmers’ Union told the BBC.

Indeed, a moment of clarity and insight from Raymond on an issue which has troubled unsubsidised, and largely unsupported, farmers from other countries for some time.

Farmers in Africa, large-, medium- and small-scale, know first-hand what it’s like to farm unsupported, with no subsidy, while competing on export platforms with heavily supported farmers from the EU and the United States.

SUBSIDY, AFRICAN-STYLE

African small-scale commercial farmers typically hold down a full-time or part-time job, delegating farming duties to paid supervisors, or to their spouses. They do this to ensure cash flow while they are getting their (unsubsidised) businesses off the ground.

On weekends they rush back to their farms to tend to fields and animals, check on work programmes, help with harvesting and truck produce to markets that may be a fair distance away. Every one of these farmers projects a future in which he will be able to farm full-time.

Imagine the difference an income safety-net subsidy, of even a single year, would make to small-scale commercial African farmers. Imagine what a help it would be to African farmers if they were rewarded for conserving and preserving the environments in which they farm, and how the grasslands, woodlands and wetlands of Africa could be restored.

Also read: Zambia’s smallholder farmers and the complexities of government support

While I am not a fan of “subsidy without sense or sweat”, there is value in governments supporting farmers. The delicate balance of the African rural economies is underpinned by the strength and resilience of commercial farmers across the board. They create jobs, they trade, they build rural infrastructure, and they ensure food sufficiency for the communities in which they farm.

It is not handouts these farmers want, but reasonable support and recognition of the role they play in regional stability and food self-sufficiency.

It would be a fine thing to hear from the African Union about support structures for Africa’s small-scale commercial farmers, and to see real action from member states that prove these governments’ commitment to farmers.

African farmers can take some pride in their ability to farm and survive, unsubsidised, in some of the world’s more difficult agricultural landscapes.

FACT BOX

  • Farms take up 70% (17.5 million ha) of the UK’s land.
  • 6.2million ha are arable of which 50% is grown to cereal crops, 65% of which is wheat.
  • There are between 212 000 and 300 000 active farms.
  • There are 31 million sheep, 10 million cattle, 9.6 million poultry units and 4.5 million pigs farmed in the UK.
  • Out of a population of 65 million – 2 million people (2.4%) live in the rural areas.
  • Agriculture contributes 0.6% to the GDP.
  • 1.5% of the total workforce is employed in agriculture.
  • Subsidies are reported to have tripled land value in the last 10 years.
  • This has led to land rising faster than any other speculative asset.
  • Farmers are exempt from inheritance tax and capital gains tax.

 

Also read: Attracting investment – the challenge for Africa’s smallholder farmers

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