British farmers in trouble, reports Allan Barber. Financial sustainability undermined by being forced to face global forces, threatening local 'food security'

By Allan Barber

The removal of EU production quotas has combined with European red tape, a collapse in food prices and the Pound’s strength against the Euro to call the survival of small UK farmers into serious question.

Industry leaders cite the fall in the milk price as a major threat to the ability of dairy farmers to break even with the price of milk in supermarkets falling below the price of bottled water and the price received being below the cost of production.

The decline in the Global Dairy Trade auction and China’s softening demand provide little hope of recovery.

Farm earnings have also been hit by the ban on exports of dairy, meat and fish to Russia, although the amount of trade with the EU has had an even more significant effect.

There are 10,000 dairy farmers in England and Wales today, half the number in 2002 and the National Farmers Union warns this could be halved again in the next 10 years.

However the problem may be related directly to scale because the small farm size must and will inevitably get larger, as corporate farm ownership replaces small family farm ownership.

The United Nations found that farm gate food prices have fallen to their lowest level in five years while, at the same time, the Pound has appreciated by 13% against the Euro in the past year.

NFU’s long term prediction is for Britain’s food security to come under threat, because British farms will produce only 53% of the country’s total food requirements by 2040.

Farming contributed £8 billion to the economy last year, but its future contribution appears likely to decline unless farmers can earn more.

The unavoidable conclusion is that New Zealand’s farming sector is in much better shape in spite of lower milk and sheepmeat prices and an even stronger exchange rate.

Farm efficiencies have improved enormously in the 30 years since the removal of subsidies and at the same time farm size has increased significantly, especially dairy farms.

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Allan Barber is a commentator on agribusiness, especially the meat industry, and lives in the Matakana Wine Country where he runs a boutique B&B with his wife. He is chairman of the Warkworth A&P Show Committee. You can contact him by email at allan@barberstrategic.co.nz or read his blog here ».