Quality and value is essential
As we head into 2018, it is time to review what has been another satisfactory year for farming.
The positive currency situation has allowed prices to remain fairly stable, which has resulted in reinvestment in the industry.
Brexit has seen industry representatives lobbying the Government for an outcome that protects farmers and improves income levels. The environmental and food lobbyists have also been having their say, but they are not always supportive of farming.
It is clear that there is no consensus on what the requirements are post-Brexit.
Some believe if we can just convince the public to buy more UK produce, we don’t need the rest of the world. This assumes the British public all understand what farming and food production is about and have an affinity with the countryside. I don’t think this is the case.
We get sucked into the view that consumers understand what we do and its importance in the food chain, and that they appreciate the quality of UK produce, but just 18 per cent of our population lives in rural areas.
As has been shown by the rise of the food discounters, people rely on the supermarket to present a weekly shop that is safe to eat and offers value at whatever price. This rise in the gap between farmer and consumer is further exaggerated by the increase in eating out and fast food.
Here the origin of the produce is largely hidden so we cannot easily improve our market share by getting the consumer to buy British, potentially paying a bit more. It’s going to be more about producing food as competitively as possible.
That might be easier said than done when farm gate prices represent just 10 per cent of the retail spend.
Under the ‘farmer’ heading, there is a huge range of enterprises, from small hill farmers to large arable producers, to intensive dairy producers, so there is not just one answer.
There will be support to farmers post-Brexit in return for agri-environmental measures. This is absolutely correct, but the lobbying has already started to focus this more specifically.
The message seems to be about less intensive farming in return for cash, and more specific, which is going to be less widely spread. That may be good news for parts of the industry, but others will miss out.
As we look to 2018, it’s probably going to be fairly benign for agriculture if currency keeps helping exports and makes imports more expensive. That allows farmers time to plan for the future and how can they produce more efficiently.
There are large variations in costings and the gap between the best third and bottom third of producers. By closing the gap, there is room to reduce costs. This will also apply to the supply trade, and there will be pressure to reduce input costs.
Farming is a long-term industry and is rather like the proverbial oil tanker. It takes time to move it and the sooner you decide what direction you want to go in the better.
As an island nation we are better placed than most to supply our consumers with quality food and I have great confidence in the industry adapting to whatever comes along.
This must be based around quality production at a cost that can compete with what else is available in the world.