Farmers braced for turmoil and change as crises grip industry

Around 200 farmers and farm professionals packed the Suffolk Farming Conference at Trinity Park, Ipswich, on Thursday, March 3, to look at what the future holds for the industry.

A massive rise in the price of wheat should have been a cause for celebration – but farmers were also deeply concerned about the plight of Ukraine, and more widely, the after-effects of the global pandemic and Brexit and a huge UK farm policy shift which was leaving many farmers unclear about their future path.

They reflected on the many humanitarian and trade implications of the Russian invasion – and the multiple challenges and crises to beset the UK sector even before the potentially hugely damaging fallout from war in the East.

Rather than cutting red tape, Brexit appeared to have created its own bureaucratic mountain, the UK pig industry was in a dire state and farming and the food supply chain was in the middle of a labour and costs crisis, delegates heard.

Meanwhile, farmers were fearful that UK food production was being sacrificed as post-Brexit trade deals potentially opened the floodgates to cheap imports.

And they expressed anger and dismay at the UK’s political leaders for the industry’s current plight.

With workshops in the afternoon across a range of topics, the aim of the conference was to help chart a way ahead for farmers at a particularly testing time.

Delegates peruse the programme at the Suffolk Farming Conference, an event organised by Suffolk Agricultural Association and farming co-op Fram Farmers for their members (Image: Archant)

Farmers’ own view of the wheat and oilseed rape price windfall was that they would need all the good luck they could get in order to keep their heads above water – but that this was only a temporary reprieve.

In a pre-recorded video address to the conference, National Farmers’ Union (NFU) president Minette Batters described the new UK farm policy as “the greatest change since 1947” for farmers. The NFU was putting forward “oven-ready” solutions, but there were problems with the government’s plans, she suggested.

She tore into the budget breakdown for a new “public money for public goods” UK farm subsidy system set to allocate 35% of the budget to less than 5% of the land as part of a landscape recovery programme - and she also likened carbon credits in their current form to “the wild west”.

Speaker Jonathan Lane, head of grain trading at food processing and commodities multinational ADM, added to the sense of foreboding as he laid out the current situation for global crops.

With ADM’s own employees in Ukraine now fighting the Russians rather than trading grain, the Chinese stockpiling corn and weather fears looming over America, he painted a gloomy picture.

Combined, Russia and Ukraine made up nearly a third of the global wheat trade, he said. An estimated 20m to 25m tonnes of committed grain was expected to come out of that region between now and harvest. “If that doesn’t come out, these gaps have to be filled from somewhere,” he said. The invasion was “likely to create unstable markets for some time,” he added.

There was drought in the US last year and La Nina was threatening this year’s growing season in a key crop area. All this was adding to uncertainty about supply. There was also a steady decline in European wheat production.

“It’s still a perilous situation for the world – we cannot afford to have any crop failures in the US or South America,” he warned. At the same time, the pig sector would shrink as the sow herd was cut.

“Food price inflation is going to have to come,” he said.

ADM’s chief economist and global strategist Marc Ostwald pointed out that the pandemic had an enormous impact on the global economy and “brutally exposed” a lot of its weaknesses. The war in Europe only exacerbated the fundamental change it had wrought, he suggested. Trillions of dollars had been released as world banks reacted to the crisis but he questioned how much was going into the real economy, rather than being “spun around”.

The UK economy after 2022 was likely to need a lot of support, he said. Rather than reining in spending, it needed to look at how countries like China invested in vital infrastructure during economic dips so that they could hit the ground running after a recession. The labour market in the UK post-Brexit was “incredibly tight” and this would have a number of implications, including for wages, he said.

He argued against complacency on a number of fronts from supply chains to movement of people, and on a reliance on a handful of Asian countries for semi-conductors for a “just-in-time” production set-up. “We need to have a major, major rethink,” he said.

In the UK, exports to the EU were down 12%, while exports to non-EU countries was down 6%, suggesting that the 6% difference may be down to Brexit. Meanwhile, inflationary problems related to non-discretionary areas such as food and energy, he said.

And at this vital time, leadership was lacking – but a change of prime minister either from within or outside the Conservative party was unlikely to change things for the better, he suspected. “In the UK, we have 650 people who are servants of their own ego,” he said.