Not only do we have new, less generous subsidy and agri environment schemes to adapt to, but we are also in the grip of dismal farmgate commodity prices.
I don’t produce milk, thank goodness. But I do produce wheat, barley, oilseed rape, peas, beans, potatoes, beef and lamb and that’s quite enough unprofitable production to be getting on with.
Wheat and barley prices are currently £20 per tonne less than at this time last year, while rape is £40 per tonne down, with other arable commodity prices also in the doldrums. Finished cattle prices have recovered a little in recent months but remain miles below the cost of production. Sheep are currently the only bright spot on my farm if £80 a head for a finished lamb can really be considered a bright spot when it doesn’t pay a shepherd’s wage for one working day.
But I doubt whether the disastrous economics of modern UK farming will be fully reflected in the government’s official total income from farming (TIFF) figures for 2015 when they are eventually published. For some time now this annual statistic has become more and more of a fantasy and less and less to do with what is actually happening on farms.
The crucial sleight of hand of TIFF is in its Orwellian title. Included in TIFF is £3.2 billion that is paid out annually to UK farmers in the form of the single farm payment (SFP) (that is decoupled and therefore nothing to do with farming) and more than £1 billion a year that farmers earn from diversified activities but which TIFF treats as “inseparable non agricultural activities.” (I have no idea why any non-farming activities are “inseparable” from farming because my accountant is always insistent that any diversified income, like horse liveries or a telephone mast, are stated in a separate income column in my annual farm accounts.)
If the SFP and “inseparable non agricultural activities” had been removed from TIFF for 2013 (the last year that the TIFF figure is available) it would have shown that instead of average farm income for that year being £23,000 per farmer it was more like £5,000. It’s worth remembering that in 2013 wheat prices reached £220 per tonne, oilseed rape was £380 per tonne and even milk was well over 30 pence per litre.
Just what the real TIFF currently is for UK farmers I dread to think as the average farmer is almost certainly recording a net loss on production. All in all, unless we see a quick recovery in farm gate commodity prices, 2015 looks like being a truly vintage year for those of us who enjoy a good grumble.