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A ROUGH GUIDE TO THE UK FARMING CRISIS : 3 - The UK farming crisis: which crisis do you mean?

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The UK farming crisis: which crisis do you mean?

The UK farm income crisis
'The public is spending the same amount on food but less and less is percolating down to the primary producer, middlemen are getting more...Unless it cascades down, it doesn't get back into the countryside'

Mark Hill, head of Deloitte & Touche food and agriculture group

The farming crisis is in reality a series of inter-linked crises arising out of the restructuring of the food and agriculture system. At its heart is a farm income crisis: the price of agricultural produce on the global market has fallen dramatically (prices for primary commodities have fallen by 50% in the last 20 years[8]) and farmers around the world are often not being paid a fair price for what they produce, driving many of them out of business.



Falling farm incomes

Between 1990 and 1995 the value of UK agricultural output skyrocketed as the pound crashed in value (devalued in real terms), mainly as a result of the UK coming out of the European Exchange Rate Mechanism.

Farmers, however, continued to receive world market prices for their produce and the total income from UK farming rose to a high in excess of £5 billion in 1995/6.[9]

Between 1996 and 2000 the pound increased in value against the ecu/euro by approximately 33% and as a consequence farm prices and incomes fell dramatically. The total income from UK farming fell by 70% from its 1996 high to a low of £1.8 billion in 2001/2 in the year of foot and mouth. It has since recovered slightly, rising to £2.36 billion in 2002 and to £3.23 billion in 2003.[10]

Despite the recent recovery, the underlying pattern is of a long-term decline in farm incomes. The total income generated by agriculture has declined in real terms by around 40% over the past 30 years (see figure below).

Annual surveys by Deloitte & Touche show that the average net farm income fell dramatically from £80,000 in 1995/6 to £8,000 in 2000 and to £2,500 during 2001, the year of foot and mouth.[12] The average net farm income has since recovered somewhat, to £10,100 in 2001/2002, and to £12,500 in 2002/3.[13]

But incomes for some, predominantly small farmers, remain well below the minimum wage.[14] 69% of farmers are still reliant on farming as their primary source of income.[15] But an increasing number of farmers now work part-time off the farm, relying on this non-farm income to support their businesses.

It is a widely held belief that farmers are creaming in a fortune through European subsidies. UK farmers received almost £2.6 billion in subsidies under the Common Agricultural Policy (CAP) in 2002.[16]

But because subsidies are production-based (i.e. the more acres of cereals you grow or the more animals you have, the greater the subsidy), the bulk of the subsidy goes to the larger, richer farms.[17] It is commonly stated that within the EU 80% of farm subsidies go to 20% of farmers.

However, the majority of UK farmers (63%) receive less than £5,000 a year in farm subsidies,[18] and some sectors - pigs, poultry and horticulture - receive no subsidies at all (see 'The subsidy myth' section below).

The subsidy myth

Many people ask why, despite receiving massive financial subsidies, farming continues to be in perpetual crisis.

Production subsidies were introduced in the UK by the 1947 Agriculture Act to persuade farmers to increase production and thus ensure national food security. Farmers received a guaranteed price for their produce and were encouraged to plough up pastures, drain wetlands and reclaim moorland and so put more land into production.

Today, subsidies to UK farmers (under the Common Agricultural Policy (CAP)) are meant not only to increase agricultural productivity but also to protect standards of living for farmers and farming communities in the EU and to bring consumers cheap food. However, the farmgate price has fallen so low that subsidies now form a substantial part of farm incomes for many farmers. This so called 'cheap food policy' is in reality a cheap farmgate price policy and it is the corporations that benefit most from these low commodity prices.

Essentially farm subsidies are corporate welfare; public funds in the form of farm subsidies are going straight into the pockets of the corporate traders, processors and retailers and most farmers are not seeing any real benefit. Even the Co-operative Society, the largest farmer in the UK, which receives about £5 million in subsidies, made an overall loss of £0.5 million in 2000.[19] Some farmers, of course, including the so called 'barley barons' of East Anglia, have been happily playing the system and making a great deal of money.[20]

Some argue that subsidies are to blame for the intensification of farming, increased production levels and low commodity prices (also see box 'Why are global agricultural prices so low?'). While subsidies help cushion farmers against low commodity prices, there is no direct relationship between subsidies and production levels.

Evidence from around the world suggests that removal of subsidies and other barriers to international trade does not significantly reduce the overall amount of land in production or production levels, although the mix of crops may change.[21]

It seems in fact that it is low farmgate prices, regardless of whether there are any subsidies available, that encourage farmers to intensify their farming in order to increase production.[22] Paid less, they cram more animals into the same space, obtain more milk output from the same number of cows and more tonnes per acre. UK dairy farmers are currently under extreme price pressure with farmgate milk prices well below the cost of production. There are no direct subsidies for milk production, but farmers have still responded to the income crisis by intensifying.

The most intensive sectors of agriculture in the UK: pigs, poultry and vegetable production receive no production subsidies at all. Whereas, the two most extensive farming sectors, beef and sheep, receive direct production subsidies in the form of headage payments.

Despite the lack of evidence that subsidies actually fuel increased production, attempts to reform the CAP, announced in June 2003, have focused on decoupling or breaking the link between subsidies and production. In future a single payment will be made to farmers which will be linked to compliance with environmental, food safety, animal and plant health and animal welfare standards, as well as a requirement to keep all farmland in good agricultural and environmental condition. The Government has recently decided to base the payment on land area in production rather than on historic subsidies received. Payments based on historic subsidies were favoured by the East Anglian barley barons, who have already benefited handsomely from subsidies, whereas payments based on area of land in production are supported by the Country Land and Business Association, which represents some of the biggest land owners.[23] Either way, the reformed CAP looks set to continue to preferentially support large farmers rather than small farmers.

Critics of the reforms also say they paper over the cracks and do not address the real issue: namely, why are farmgate prices so low that farmers, especially small and family farmers, can't make a fair living?[24]

Without a fair price for their produce, CAP reform may slow the exodus from farming, but will not prevent it.

The bottom line is that many UK farmers don't want to rely on subsidies. What they want is a fair price for producing food.[25]



The declining farm workforce: losing small and family farmers at an alarming rate

In 1939, Britain had almost half a million farms, the majority less than 40 hectares, and employed almost 15% of the population. Since then Britain has lost over a thiord of its farms and the agricultural workforce has been in serious long-term decline. In 2000, there were 303,000 farms in the UK and an agricultural workforce of 557,000 (farmers and farmworkers) - about 2% of the total UK workforce.[26] Part of the loss of labour from the land has been due to the post-war industrialisation of farming: the replacement of farm labour by machinery, the use of chemical fertilisers and synthetic pesticides etc.

However, the pace of loss of farmers and farm workers has accelerated in recent years. Some 87,000 farmers and farm workers left farming in the UK between 1993 and 2001, and a further 18,000 left farming in 2002.[27] There is no sign that this exodus is letting up and the government predicts that by 2005, 25% of the remaining farms in the UK will have gone out of business or merged, with a further 50,000 people forced to leave farming.[28]

UK Farming at a glance...[29]

Number of farms - 303,000

Number of farms under 50 hectares - 225,000

Number of people working in agriculture - 557,000

Average farm size - 56.6 hectares

Number of tenant farmers - 23,000 (18% of all full-time farmers) farming 32% of total productive land.[30]

6,000 landowners (mainly aristocrats, but also large institutions like the National Trust, the Church of England, the Co-op and the Crown) own about 40 million acres of the UK total of 60 million acres. i.e.

70% of the land is owned by 1% of the population.[31]

Government statistics indicate that it is small and medium sized farms that are disappearing while the number of larger farms is increasing.[32] Michael Hart, chair of the Small and Family Farms Alliance says that, 'the government does not recognise the small farmer at all. They see us purely in economic terms and say you're inefficient and must intensify.'[33] Yet small and family farms are at least as productive as larger farms, are more efficient in their use of resources, are better for the environment and contribute more to the local economy and community than do large farms (see box 'Small farms good, big farms bad?' on page 34).

We are told by the agricultural establishment that the fact hat thousands of small and family farmers are being forced off the land each year is an inevitable result of the need to increase the 'efficiency' of UK agriculture plc (See box 'The architects of UK agricultural policy' on page 15). It is implied that those who have failed are victims of their own inefficiency - their inability to compete. The 'rationalisation' of farming - the reduction in the number of farms/farmers and farmworkers and the increase in the size of holdings - is, according to the government and its advisers, the way forward for UK agriculture. They say the only way UK farmers can compete in the global marketplace is to increase their efficiency (i.e. reduce their unit costs of production) by industrialising further and by getting bigger.



The expand or go bust treadmill
'Farmers are just the hamsters in the wheel that powers the expanding agribusiness empire. And government's solution to the farm crisis is for the hamsters to run faster'

Darrin Qualman, National Farmers Union (Canada) [34]

Farmers are on a treadmill created by the technology which drives intensification. As farms become more industrialised and more productive there is the market is oversupplied with food and crop prices fall. Food consumption (at least in industrialised countries) does not increase significantly when prices fall, because there is only so much food those of us who are already sufficiently well fed, can eat. Intensification is thus not driven by the 'pull' of demand for more food, but rather by the 'push' of the availability of new productivity enhancing technology, which effectively forces farmers to intensify in order to keep up. While intensifying production may make sense for an individual farmer, collectively it tends to drive prices and profits down, locking farmers into another round of cost-reducing and output-increasing technology. It is this 'cost price squeeze' - high cost of inputs, low prices for outputs - that is undermining farmers' livelihoods.

There is also a constant pressure to 'get big or get out of farming', in order to take advantage of the benefits of economies of scale and gain increased efficiency and lower production costs. But getting bigger (and more economically efficient) is not necessarily better for farmers. Studies from Canada suggest that, as farms have got larger, although farm output has dramatically increased, incomes have declined. This suggests that expansion does not actually benefit farmers.[35] However, large farms can tolerate lower margins more easily than small farms, so they can afford to sell their produce at lower prices if forced to do so, as they frequently are, by the big processors and supermarkets who buy from them. Even if the per unit price falls, as long as the price is above the cost of production, each unit sold adds to the profit. In the end the only real beneficiaries of the economies of scale of larger farms are the processors and supermarkets.

Agricultural borrowing in UK currently stands at an estimated all-time high of more than £10 billion.[36]

In order to survive in this economic climate, farmers must inject more capital into their businesses to buy more land, more machinery, more animals. In 1999, 64% of farmers borrowed money in order to keep their farms going.[37] Many are now saddled with enormous debts, which they have been unable to repay as farm incomes have fallen.

Faced with falling incomes, more than one quarter of farmers (27%) have been forced to diversify into activities outside food production, [38] including running B&B's, nursing homes, go-kart racing and tea rooms, and converting outbuildings into holiday accommodation or offices for rent. But factors such as farm location, structure of the farm business and the skills of the farmer mean that for many diversification is not an option. Britain's 23,000 tenant farmers find it even more difficult to diversify thanks to falling incomes, continuing obligations to pay rent, poor borrowing power and often restrictive conditions of tenure which prohibit change of use.[39]

Overproduction

Farmers are forever being told on the one hand that they produce too much food. The word 'overproduction' is constantly on the tip of agricultural policy-makers' tongues and overproduction is regularly cited as a reason why farming needs to be 'restructured' and the number of farmers reduced even further. But on the other hand they are also frequently told to get more efficient ie produce more.

What is meant by 'overproduction'? It doesn't mean producing more food than the people in the world can eat. Large numbers of people are hungry. Even larger numbers don't eat as luxuriously as we do in wealthy countries, though given the opportunity, they would no doubt like to.

What economists mean by 'overproduction' is producing more food than the people in the world can buy. Two thirds of people do not have not enough money to afford the shopping basket we in Britain take for granted. All the evidence is that when they do become wealthy enough, then they too aspire to a rich and varied diet.

Many farmers are choosing to leave farming all together. The Countryside Agency predicts that land use will diversify with less and less food production and says that by 2020 the idea that the countryside equals farming may be well and truly buried.[40]

It is true that some farmers own land at a time when land values are sky-rocketing. But this land wealth is largely irrelevant as it can often only be realised by the sale of the property and the consequent loss of livelihood.

The value of the land also has no bearing on the price the farmer gets for the crops. With land prices so high in the UK, there are very few new entrants to farming. As farmers sell up, the land frequently goes out of production and may be bought up for commuter homes or by property developers, for executive housing, business units and golf courses. According to the Royal Institute of Chartered Surveyors half of all farms sold in England go to city people who want a house in the countryside and who do not intend to farm the land.[41] The accompanying farmland is frequently sold off to a neighbouring farmer who wants to increase the size of their holding, thus continuing the trend towards the concentration of UK land ownership into ever fewer hands (see box 'UK farming at a glance')

Comparison of cost of production and farmgate price[46]
  Cost of production Farmgate price
Milk 18-21 pence per litre 18.5 pence per litre
Pork 95p per kg 84p per kg
Bread wheat £95 per tonne £115 per tonne including subsidy
Eggs 45.3p per dozen 27p per dozen
Potatoes £77 per tonne £50-60 per tonne

According to a survey carried out in 2000, 20% of farmers were worried about their futures and did not know what other work they could do, while 7% felt that farming had no future.[42] The impact of gruelling hours (66% of farmers in Britain regularly work over 60 hours a week)[43] and the effect of uncertainties about the future on both farmers' health and the quality of their family's lives are significant. Suicides among farmers currently stand at 59 per year, more than one a week.[44] Whereas 20 years ago farming was a multi-generational business, the average age of UK farmers is currently 59. Not surprisingly, the majority of farmers' children do not want to take over the family farm when their parents retire.

The farm income crisis impacts most heavily on small and family farmers who have very little to cushion themselves against low prices. These farms are now in serious decline. Some small and family farms will survive by adding value; organic farming, processing milk to make cheese, growing herbs for medicinal use etc. But if the trend continues we can expect to see the demise of the majority of small family farms with much of the land that continues to be farmed in the future owned by absentee landlords - insurance companies, pension funds and big farming businesses - and managed by contract farming companies such as Farmcare, Velcourt, Sentry Farming and Booker Agriculture, with nothing but profit in mind. See section 'Contract farming in the US - hired hands on their own land' on page 29 for another possible scenario for UK farming in the future.

Producing more but earning less

Farmers are stuck in a cycle of producing more, but earning less. A survey in 1999 found that UK farmers were earning almost nothing from what they produce. For virtually every commodity in the survey, the farmgate price - the price farmers were paid for their produce - was less than the cost of production.[45]

This trend continues and figures for 2002 for milk and bread wheat show that farmers are still getting paid less than the cost of production.[46]

UK dairy farmers are facing particularly hard times due to the unprofitability caused by the fall in farmgate prices relative to production costs. The farmgate milk price has fallen by over 30% since 1995.[47] In 2002, dairy farmers received an average of 17 pence per litre (ppl) compared to production costs of 18-21ppl.[48 & 49] The majority of farmers are making no profit on the production of milk and some are making considerable losses. As a consequence UK dairy farming is undergoing a massive restructuring. Between 1970 and 2000 the number of dairy farms fell by over 70%.[50] Many of the farmers who have managed to stay afloat have done so by industrialising and intensifying further.

There is a similar story for arable farmers producing bread wheat. UK wheat farmers receive just 4.8p from the sale of the average loaf of white bread (800g) costing 55p. Arable farmers' incomes crashed by 57% between 2000 and 2002. For the average UK cereal farmer working 100-200 hectares the cost of production in 2002 was £119 per tonne, yet the farmgate price was only £72.50 per tonne. Despite receiving an arable area payment (subsidy) of £31 per tonne, many wheat farmers are unable to cover the cost of production, let alone make a profit.[51]

Are these low prices being passed on to consumers?

It might be reasonable to assume that as farmgate prices fall these would translate into lower retail prices, but according to the National Farmers Union there is no evidence that these falling prices are being passed on to consumers at the supermarket checkout.[52] The price paid to farmers and the price paid by consumers have become disconnected; in 1998 a slump in lamb prices at livestock markets was not translated into a reduction in supermarket prices and again in 2001 a slump in milk prices did not reduce the retail price.[53]

The farm-to-retail price spread (the difference between what farmers are paid for the food they produce and what consumers pay for food after processing and marketing) is widening. From 1991/2 the food retail price index rose by 15% while the price received by farmers fell by 9.6%(see figure 'Farmers' share of the retail price').

Like farmers, consumers are experiencing the economic impact of the near monopolistic control of the food system by the big food corporations. This control has weakened the link between farmgate prices and food prices, so that food prices are increasing even as the prices paid to farmers are falling. The gains from lower farmgate prices are being captured by the big food processors and supermarkets, not by farmers or by consumers (also see section 'Corporate Control of the Food System' on page 26).

Supermarket profiteering?

According to Michael Hart, chair of the Small and Family Farms Alliance the increasing gap between farmgate and retail prices is, in some cases, due to 'clear profiteering'.

In 1991 the farmgate price of potatoes was 9p per kg and the retail price was 30p; in 2000 the farmgate price was still 9p per kg but the retail price had increased to 47p per kg; a price increase of 57%. The farmgate price for cauliflowers was 24p in both 1990 and 2000 but the retail price rose from 73p in 1990 to 98p in 2000, a price increase of 35%. These products require no processing other than grading and packing, both of which are done by the farmer. Michael Hart says that the difference between farmgate and retail prices and the increase in the farmgate to retail price differential is due to the supermarkets' excessive profit margins at the expense of farmers.[55]

The web of interlinked crises
'The low farmgate prices being paid to farmers by supermarkets are destroying any chance we have of a sustainable farming system in Britain. Without profitable farming, the environment, landscape and rural communities suffer.'

Michael Hart, chair of the Small and Family Farms Alliance [56]

All industrial sectors sometimes face recession and many decent and hard working people go bankrupt every day. Farming is viewed by many economists like any other industry sector: as a set of resources - land, labour, capital and management - to be made ever more ruthlessly efficient. But farming is much more than this. It does more than just produce food, fibre and oil. As well as having important social, political, cultural and historical dimensions, the health or otherwise of the farming industry has a profound impact on local, national and global economies and ecosystems. This 'multifuctionality' is highlighted by the web of inter-linked crises that make up the farming crisis.

The rural communities' crisis

Farmers and farmworkers are the economic lynch-pins of their communities. As farms have disappeared and as those that remain have grown larger, farming is contributing less and less to the local community. Compared with smaller farms, large farms contribute less to the economic well being of the community because they tend to go outside the community to buy inputs and to sell their produce. Rural communities are losing their viability. There has been a dramatic decline in essential services in rural areas. Fewer than 12,000 rural shops are now left in Britain and at the current rate a further 300 are set to close each year.[57] Wholesalers, the lifeblood of small local shops, are closing at an ever increasing pace,while new registrations of small scale food manufacturers have fallen by 12 per cent.

Eight hundred communities in Britain have no bank left, and over a thousand have only one. In the decade to 2002, Britain lost one third of its bank network.[58] The post office network has contracted by 10% in the past 10 years, with rural areas particularly hard hit. In the first three quarters of 2000, 434 sub post offices (most of which were in rural areas) closed.[59] The local pub is also under threat with six village locals closing every week.[60]

The biggest recent blow to the rural economy came in 2001 with foot and mouth disease literally closing the countryside down, with huge economic cost not only to farming but also to tourism and other parts of the rural economy. The foot and mouth crisis has demonstrated the vulnerability of already fragile rural economies as struggling shops, pubs left without customers and small businesses servicing the agricultural community have been forced to close.

Rural areas are also being sapped of their young people. While the population of rural England (currently 28% of England's population) is growing three times faster than of urban areas,[61] it is retired people and better off families with private cars that are moving in, drawn by the perception that the countryside provides a better quality of life. At the same time there is an exodus of young people and those on lower incomes from the rural community because of the lack of affordable housing and jobs in the countryside.[62]

The ecological crisis

According to the World Resources Institute, modern industrial agriculture has without a doubt resulted in higher yields.[63] But at what environmental cost? The intensification of production, brought about through the development and use of synthetic chemicals, mechanised farm machinery and high yielding hybrid seeds, has devastated the soil, water resources and farmland ecology, causing irreparable damage to agricultural land and raising concerns about long term ecological sustainability and loss of wild biodiversity.[64]

Intensive agriculture appears to have made it possible for us to eat more food more cheaply. But the environmental and social costs accompanying these agricultural methods have not been factored into the price at the supermarket checkout.

Instead these hidden costs are paid through taxes: to clean up the environment, to remedy health problems and to compensate farmers for livestock diseases like BSE and foot and mouth.

Jules Pretty of the University of Essex has estimated that in 1996 the 'hidden' or external costs of industrial farming in the UK amounted to £2.34 billion.[65] Intensive agriculture, in effect, receives a hidden subsidy of £208 per hectare for its polluting behaviour and damage to the environment and to human health, so there is little incentive for farmers to clean up their act. In contrast organic farming costs the taxpayer considerably less, about £88 per hectare.[66] The Environment Agency has also looked at the externalities of industrial agriculture and came up with the figure of £1.5 billion excluding the costs of damage to biodiversity, landscapes and human health.[67]

Total external costs of UK industrial agriculture, 1996 [68]
  £millions
Cleaning up drinking water 231
Damage to wildlife, habitats, hedgerows and drystone walls 124
Emissions of gases 1,113
Soil erosion and organic carbon losses 96
Food poisoning 169
BSE 607
Total £2.34 billion

And these are merely the losses we can put a figure on. As Jules Pretty says, how can we calculate the cost of the loss of a skylark singing on a summer's day or a wild-flower meadow?

In association with the intensification of food production a sophisticated food distribution system has developed which is totally reliant on fossil fuels. The global transportation of food and the 'just in time' national distribution networks of the major supermarkets, in which lorries circle the M25 waiting to rush produce to stores as and when needed, have developed because the stores do not pay the real costs of long distance trade. Food distribution accounts for up to 40 per cent of all UK road freight.[69] In 2000, lorries transported 354 million tonnes of food, animal feed and drink over a total distance of 4,437 million kilometres, an increase of about one third over 10 years ago.[70]

This long distance transportation of food causes air pollution, excess packaging, encourages road building and maintenance, depletes the finite resource of fossil fuel and leads to carbon dioxide emissions which contribute to climate change. Despite air freight causing even more environmental damage than road transport, there is no tax on aviation fuel. This failure to tax aviation fuel is one of the key reasons why the global transportation of food is so cheap.

Powerful lobbying by corporations wanting access to markets also means that they receive huge taxpayer funded subsidies for the development of transport infrastructure (road building and maintenance, airports etc). As with the costs of industrial farming the taxpayer picks up the hidden environmental and social costs of the long distance transportation of food.



The public health crisis
'It is not the role of manufacturing industry to improve the health of the general public or to shoulder the responsibility of ensuring that people live longer, or lead healthier lives'

Tim Fortesque, Secretary General of the Food and Drinks Industries Council UK [71]

For centuries, undernourishment and unsafe water were widespread across Europe. The nineteenth century saw the potato famine in Ireland and was riddled with scares about contaminated food. The twentieth century, through a combination of the industrialisation of agriculture and changing lifestyles resulting from increased incomes, has banished earlier fears of malnutrition and poor sanitation but has exposed consumers to a whole different range of public health and food safety risks.

These concerns range from the use of antibiotics in factory farming to the processing of food with unhealthy levels of salt, sugar and fats and the addition of food additives and preservatives; from high levels of pesticides with carcinogenic or hormone disrupting properties, to the loss of natural flavour and nutritional quality; from uncertainty about the health and environmental risks of genetically engineered crops, to the emergence of new variant Creuzfeldt-Jacob Disease and concerns about the looming obesity crisis.

Food is now plentiful in the developed world but even people who overindulge can only eat so much. This oversupply has created a highly competitive food industry that encourages over-consumption of processed foods and is highly detrimental to public health. The food industry makes proportionately more money from selling processed foods than from more traditional products and two thirds of new food product developments are high in sugar, fats and salt. Consumers frequently can't get accurate, unbiased information about these food products; they instead get disinformation in the form of corporate advertising. The food industry spends enormous amounts of money on advertising in order to shape people's tastes and food preferences. It does everything it can to persuade people to eat more and it preferentially promotes mass-produced processed foods; 70% of the $33 billion annual food advertising budget is used to promote soft drinks, sweets and snacks, while only 2.2% is spent on fruit, vegetables, beans and pulses.[72]

There is now an epidemic of chronic diseases - obesity, diabetes, cardiovascular disease and some cancers - associated with the over-consumption of products high in fats, salt, sugar and refined carbohydrates, and low in fibre. The cost to the UK economy of cardiovascular disease is estimated to be £10 billion a year (including both the costs to the health service and the costs of lost productivity).[73] It is estimated that the obesity crisis (a combination of poor diet and lack of physical activity) could cost the health service £3.6 billion a year by the end of the decade.[74]



The food security crisis

The projected decline of the UK farming sector and the loss of people with the skills and knowledge to farm our countryside is putting the long-term sustainability and security of UK food production at risk. The post-war policy of maintaining food security through growing most of our food within the UK is being abandoned in favour of the idea that food security can be achieved through free trade and purchase of food on the world market. UK farmers currently supply about 62 per cent of our food needs.[75] But the mind-set of the Government and its policy advisers, appears to be that we can abandon much of our food production in the UK, leaving only a few vast agribusinesses to compete on world markets, plus a scattering of small, niche producers.

Some have argued that there is no need to worry about the decline of farming in the UK, that we should instead conserve the countryside for wildlife, leisure and tourism, essentially turning the UK into a theme park. But the rural landscape of the UK is very largely a farmed landscape, created by 5,000 years of agriculture. Hay meadows, pastures and other features of the farmed landscape which have their own special ecology would be lost if the land was no longer farmed.

Where would our food come from otherwise? The only reason the UK can contemplate a shift away from production-oriented agriculture to environmental and amenity land management is because we can buy produce from the other side of the world more cheaply than we can produce it here. More than likely this produce comes from high-input, environmentally-degrading farming in developing countries where vast tracts of land have been given over to producing food, and in particular animal feed, for export to satisfy the needs of industrialised countries. Brazil, for example, has become a major supplier of soya beans for European animal feed, but to do this it has cut down a quarter of its Cerrada plateau forest (approx. 5 million hectares), causing immeasurable environmental damage. It has been estimated that the UK exploits two 'ghost hectares' abroad for every hectare farmed in the UK.[76]

We are able to support our food needs and protect our environment because we are happy to buy commodities that destroy other people's environments, utilise their resources and jeopardise their food security in what Simon Fairlie of the Land is Ours has called 'an objectionable neo-colonialist approach' to global resource use.[77]

And what happens when developing countries become rich enough to afford luxury foods and want to protect their environment? Where will we get our cheap food from then? A more democratic approach to agriculture and the food supply is the idea of 'food sovereignty' or 'food democracy' which emphasises the right of all communities to protect and regulate domestic food production and trade to achieve sustainability, guarantee a livelihood for farmers and ensure that people are fed (see section 'Rebalancing Power in the Food System: Some Ideas' on page 33).



The global context: an even greater farming crisis in the developing world

The farming crisis is not just affecting farmers in the UK, it is a global crisis and plummeting world prices have affected all farmers. But the impact on small farmers in developing countries has been proportionately greater. Three quarters of the world's poorest people (almost one billion people) live in rural areas and most rely on agricultural production for their livelihoods.[78] As the global food system restructures, a combination of dumping of cheap imports and the drive towards export-led production (rather than food for local consumption) has undermined the livelihoods of small farmers and compromised food security. This is driving literally millions of farming families off the land and into cities in search of work (see section 'Trade liberalisation: on balance good or bad for the developing world?' on page 21 for more discussion)

References

[8] Andy Jones (2001) Eating Oil: Food Supply in a Changing Climate SUSTAIN

[9] Total income from farming is calculated by deducting interest payments, net rent and the cost of hired labour from net product; DEFRA Agriculture in the United Kingdom 2002 http://statistics.defra.gov.uk/ esg/publications/auk/2002/chapter2.pdf ; Viewed 6/1/04

[10] DEFRA (2003) Report on the Economic Position of the Farming Industry 2003 http://statistics.defra. gov.uk/esg/reports/repfi.pdf; Viewed 11/2/04

[11] National Farmers Union, UK Agricultural Review, April 2003 www.nfu.org.uk/stellentdev/groups /press/documents/policypositions/ukagriculturalrev _ia3f5dd304-3.hcsp; Viewed 11/2/04

[12] Average net farm income is income after paying outgoings but not salaries for farmer/spouse or other family members; Simon Jeffrey 'Plummeting incomes add to farmers' woes' The Guardian, October 12 2000 www.guardian.co.uk/country/article/ 0,2763,381257,00.html : Viewed 6/1/04; Deloitte & Touche press release, 'Farmers earn less from producing food as low profits bite' October 22 2002 www.deloitte.com/dtt/press_release/0,2309,sid %253D%2526cid%253D6337,00.html; Viewed 6/1/04

[13] DEFRA Agricultural Quick Statistics 2002 http://statistics. defra.gov.uk/esg/quick/agri.asp; Viewed 11/2/04

[14] Robert Harris 'Incomes slowly recovering' Farmers Weekly, January 30 2003 www.fwi.co.uk/article. asp?con=8930&sec=17&hier=17 ; Viewed 6/1/04; Helen Carter and Polly Curtis 'Hill farms teetering on the breadline' Guardian, January 21 2004 www.guardian.co.uk/uk_news/story/0,3604,11 27516,00.html; Viewed 6/1/04

[15] DEFRA (2002) Implications of Changes in the Structure of Agricultural Businesses, DEFRA http://statistics.defra.gov.uk/esg/reports/icsab/defaul t.asp; Viewed 6/1/04

[16] DEFRA Agricultural Quick Statistics 2002 http://statistics. defra.gov.uk/esg/quick/agri.asp; Viewed 11/2/04

[17] Organisation for Economic Cooperation and Development (OECD) (2003) Farm Household Incomes in OECD Countries: Issues and Policy Responses, OECD www.oecd.org/document/ 41/0,2340,en_2649_33727_20694057_1_1_1_ 1,00.html; Viewed 6/1/04

[18] Actionaid (2002) Farmgate:The Developmental Impact of Agricultural Subsidies, Actionaid www.actionaid.org/resources/pdfs/farmgate.pd f; Viewed 6/1/04

[19] Michael Hart, chair of the Small and Family Farms Alliance speaking at the 'On Fertile Ground' Gathering, Oxford, March 2001

[20] Oxfam (2004) Spotlight on Subsidies: Cereal injustice under the CAP in Britain, Oxfam Briefing Paper 55 Oxfam International www.oxfam.org.uk/ what_we_do/issues/trade/downloads/bp55_subsidies. pdf; Viewed 27/1/04

[21] National Farmers Union (Canada) (2000) The Farm Crisis, EU Subsidies and Agribusiness Market Power www.nfu.ca/feb17-brief.htm; Mark Ritchie, Sophia Murphy and Mary Beth Lake (2003) US Dumping on World Agricultural Markets: Can Trade Rules Help Farmers? Institute for Agriculture and Trade Policy www.tradeobservatory.org/library /uploadedfiles/United_States_Dumping_on_World_Ag ricultural_Ma.pdf; Daryll Ray et al (2003) Rethinking US Agricultural Policy: Changing Course to Secure Farmer Livelihoods Worldwide, University of Tennessee http://agpolicy.org/blueprint/ APAC%20Report%208-20-03%20WITH%20COVER. pdf; Viewed 6/1/04

[22] Caroline Lucas, Michael Hart and Colin Hines (2002) Look to the Local: A Better Agriculture is Possible! www.localfoodworks.org/Web/SA/SAWeb.nsf/0/ ef9e48c3b6c31e6280256c33003cd0ee/$FILE/Look%2 0to%20the%20Local.PDF; Viewed 6/1/04

[23] Charlotte Denny, Larry Elliott and Charlotte Moore 'Who gives these wealthy men £1,000 a day each to subsidise their farms? - the taxpayer' Guardian January 22 2004 www.guardian.co.uk/uk_news /story/0,3604,1128389,00.html

[24] FARM (2003) FARM's response to DEFRA's consultation on options for reform of the Common Agricultural Policy, October 2003. www.farm.org.uk/documents/ DEFRA%20consultation%2024_10_03%20resp onse%20final.pdf; Viewed 20/12/04

[25] Pippa Woods (2002) A Better CAP, Family Farmers Association; FARM (2003) FARM's response to DEFRA's consultation on options for reform of the Common Agricultural Policy October 2003. www.farm.org.uk/documents/DEFRA%20consultation% 2024_10_03%20response%20final.pdf; Viewed 20/12/03

[26] DEFRA (2002) Agriculture in the UK 2002 http://statistics. defra.gov.uk/esg/publications/auk/2002/chapter3. pdf; Sustainable Food and farming: working together-the Future DEFRA 2002 Annex B Chart 1 p 35 www.defra.gov.uk/farm/sustain/annexb.pdf; Viewed 6/1/04

[27] DEFRA (2002) Agriculture in the UK 2002 http://statistics. defra.gov.uk/esg/publications/auk/2002/chapter3. pdf; Viewed 6/1/04

[28] Patrick Wintour 'Extent of farm crisis revealed' The Guardian, April 11 2001 www.guardian.co.uk/ footandmouth/story/0,7369,471654,00.html; Viewed 6/1/04

[29] DEFRA (2002) Agriculture in the UK 2002 http://statistics.defra.gov.uk/esg/publications/auk/20 02/chapter3.pdf ; DEFRA Agricultural Census www.defra.gov.uk/esg/work_htm/publications/ cs/farmstats_web/datamap_links/data_menu.ht m ; DEFRA (2003) Report on the Economic Position of the Farming Industry, DEFRA http://statistics.defra.gov.uk/esg/reports/repfi.pdf; Viewed 11/2/04

[30] NFU Press Release 'Tenant Farmers the Facts ' February 2000

[31] Kevin Cahill (2001) Who Owns Britain? The Hidden Facts Behind Land Ownership in the UK and Ireland London:Cannongate

[32] DEFRA (2002) Agriculture in the UK 2002 http://statistics. defra.gov.uk/esg/publications/auk/2002/chapter3. pdf; Viewed 6/1/04

[33] John Vidal 'Bleak future for small farms' The Guardian February 28 2001 www.guardian. co.uk/footandmouth/story/0,7369,444099,00.html; Viewed 6/1/04

[34] National Farmers Union (Canada) (2003) The Farm Crisis, Bigger Farms and the Myths of "Competition" and "Efficiency" www.nfu.ca/briefs/Myths_PREP _PDF_TWO.bri.pdf; Viewed 20/12/03

[35] National Farmers Union of Canada (2003) The farm Crisis, Bigger farms and the Myths of "Competition" and "Efficiency" www.nfu.ca/briefs/Myths_ PREP_PDF_TWO.bri.pdf; Viewed 20/12/03

[36] National Farmers Union, UK Agricultural Review - Farming in Crisis, June 2002

[37] National Farmers Union, Special Report - Farming in Crisis, September 1999

[38] DEFRA (2002) Implications of Changes in the Structure of Agricultural Businesses http://statistics. defra.gov.uk/esg/reports/icsab/default.asp; Viewed 6/1/04

[39] NFU Press Release 'Tenant Farmers the Facts ' February 2000

[40] The Countryside Agency (2003) The State of the Countryside 2020 The Countryside Agency www.countryside.gov.uk/EvidenceAndAnalysis/ state_of_the_countryside_reports/SOCR2020.asp; Viewed 6/1/04

[41] John Vidal 'Farmers are dying out' Guardian, August 7 2003

[42] Countryside Agency (2001) Foot and Mouth Disease; the State of the Countryside Report, http://www. countryside.gov.uk/stateofthecountryside/

[43] National Farmers Union, UK Agricultural Review - Farming in Crisis, June 2002

[44] National Farmers Union, UK Agricultural Review - Farming in Crisis, June 2002

[45] Mike McCarthy, 'Why Britain's Farmers are Making a Loss on Nearly Everything They Grow', The Independent, 28 August 1999

[46] Mike McCarthy, 'Why Britain's Farmers are Making a Loss on Nearly Everything They Grow', The Independent, 28 August 1999

[47] DEFRA February 2004 United Kingdom Milk Prices http://statistics.defra.gov.uk/esg/datasets/milkpr.xls; Viewed 11/2/04

[48] DEFRA February 2004 UK Milk Statistics http://statistics. defra.gov.uk/esg/statnot/prmlkpn.pdf; Viewed 11/2/04

[49] KPMG, 2003, Pricing and Profitability in the British Dairy Chain: A Report to the Milk Development Council www.mdcdatum.org.uk/PDF/ KPMG%20Report.pdf; Viewed 11/2/04

[50] Dairy Industry Newsletter UK Milk Report, 2001

[51] Unpublished work by Corporate Watch on 'Where does the money go in the Food System?

[52] National Farmers Union, UK Agricultural Review - Farming in Crisis, June 2002

[53] Race To The Top, Producers, www.racetothetop. org/indicators/module2/; Viewed 11/2/04

[54] National Farmers Union, UK Agricultural Review, April 2003 www.nfu.org.uk/stellentdev/groups/ press/documents/policypositions/ukagriculturalrev_ia 3f5dd304-3.hcsp; Viewed 11/2/04

[55] Friends of the Earth Media Briefing 'Tesco Exposed' 13th June 2003 www.foe.co.uk/resource/briefings/ tesco_exposed.pdf; Viewed 11/2/04

[56] Friends of the Earth Media Briefing 'Tesco Exposed' 13th June 2003 www.foe.co.uk/resource/briefings/ tesco_exposed.pdf; Viewed 11/2/04

[57] Andrew Simms, Julian Oram, Alex MacGillivray and Joe Drury (2003) Ghost Town Britain: The threat from economic globalisation to livelihoods, liberty and local economic freedom New Economics Foundation www.neweconomics.org/gen/uploads/ghost_to wn.pdf; Viewed 6/1/04

[58] Julian Oram, Molly Conisbee and Andrew Simms (2003) Ghost Town Britain II:Death on the High Street, New Economics Foundation www.neweconomics. org/gen/uploads/2hk0dtqtzv0run55afsofu4515122003114309. pdf: Viewed 31/12/03

[59] Countryside Agency Vital Villages July 2001 Issue Twenty One

[60] Andrew Simms, Julian Oram, Alex MacGillivray and Joe Drury (2003) Ghost Town Britain: The threat from economic globalisation to livelihoods, liberty and local economic freedom, New Economics Foundation www.neweconomics.org/gen/uploads/ghost_to wn.pdf; Viewed 31/12/03

[61] The State of the Countryside 2020 The Countryside Agency 2003 www.countryside.gov.uk/Images/ SoC%2026032003144341_CA138_tcm2-4738.pdf; Viewed 11/2/04

[62] Julie Rugg and Anwen Jones (1999) Getting a job, finding a home: Rural youth transitions The Policy Press www.jrf.org.uk/knowledge/findings/ socialpolicy/n59.asp; Viewed 11/2/04

[63] World Resources Institute (2000) World Resources 2000-2001: People and ecosystems : The fraying web of life

[64] Jeffrey McNeely and Sara Scherr (2003) Ecoagriculture: Strategies to Feed the World and Save Wild Biodiversity, Washington : Island Press

[65] Jules Pretty et al (2000) An assessment of the total external costs of UK agriculture, Agricultural Systems 65 (2) pp.113-136

[66] Jules Pretty 'The True Cost of Intensive Farming' Living Earth, Soil Association (208) Oct-Dec 2000

[67] Environment Agency (2002) Agriculture and Natural Resources: Benefits, Costs and Potential Solutions www.environment-agency.gov.uk/commondata/ 105385/farming_and_ag137.pdf; Viewed 6/1/04

[68] Jules Pretty et al (2000) 'An assessment of the total external costs of UK agriculture', Agricultural Systems 65 (2) pp.113 -136

[69] Andy Jones (2001) 'Eating Oil: Food Supply in a Changing Climate' SUSTAIN

[70] DEFRA (2002) Sustainable Food and Farming: Working Together-the Future, Annex B Economic Analysis and Evidence p43 www.defra.gov.uk/ farm/sustain/annexb.pdf

[71] Quoted in Erik Millstone and Tim Lang (2003) The Atlas of Food: Who Eats What, Where and Why, Brighton : Earthscan

[72] Marion Nestle (2002) Food Politics: How the Food Industry Influences Nutrition and Health University of California Press

[73] DEFRA (2002) Sustainable Food and Farming: Working Together-the Future Annex B Economic Analysis and Evidence p 54 www.defra.gov.uk/ farm/sustain/annexb.pdf; Viewed 6/1/04

[74] Francis Elliott 'Too much TV blamed for "fat Britain" trend' The Independent on Sunday December 28 2003

[75] DEFRA Agricultural Quick Statistics 2002 http://statistics. defra.gov.uk/esg/quick/agri.asp ; Viewed 6/1/04

[76] Tim Lobstein 'Measuring Food by the Mile' www.mcspotlight.org/media/reports/foodmiles. html; Viewed 6/1/04

[77] Simon Fairlie (2001) The End of Agriculture ECOS, Volume 21 - Issue No 3/4 www.ruralfutures. org/frame.htm; Viewed 6/1/04

[78] Kevan Bundell (2002) Forgotten Farmers: Small farmers, trade and sustainable agriculture, Christian Aid www.christian-aid.org.uk/indepth/ 0206farm/farmers.pdf; Viewed 6/1/04