Tuesday, 2 June 2009

Going it alone

This chart struck me as being very counter-intuitive.

With the growth of world trade, it might be reasonable to think that UK would become more dependent on food produced overseas. In fact, since 1970 the proportion of domestically produced food has actually increased.

Food self-sufficicency peaked in 1991 when three quarters of food demand was produced by domestic farms. Self-sufficiency has fallen since then, but it still remains over 60 percent, which is surprising for a country with such a high population density.

Why did UK self-sufficiency increase so quickly and then decline. Has anyone ever met a farmer who didn't think food production should be subsidized? During the 1980s, the EU's common agricultural policy was extremely generous to any farmer who over produced. More recently, the scheme has become less generous. Farmers have responded by cutting back production.

It is always about incentives.

21 comments:

RF said...

CAP, PAC or whatever it is called. It is a license to steal from taxpayers.

Anonymous said...

I wonder if the incentives were more to do with the high inflation of the late 70's and 80's.

Over production was a delayed after effect of high food prices.

dearieme said...

Is the legend arsy-versy?

Anonymous said...

Farmers now have a payment regardless of production and hence activities which do not pay without subsidy are being stopped resulting in falling production at home and an increase in imports. Food prices are low world wide at the moment and falling production may be a seriously bad outcome of present policies as relying on imports at a time of falling production is risky.

Anonymous said...

AC: "Why did UK self-sufficiency increase so quickly and then decline."

'Set aside'

When did the EU or its intermediary in the UK, DEFRA, introduce set aside for agricultural land?

Betcha!

Alice Cook said...

Anonymous,

I am from the city, what do I know about set-aside?

Before I looked at the data, I thought that farming went the way of manufacturing.

I was wrong. Notwithstanding the occasional mad cow, farming appears to be alive and well in the UK.

Alice

Anonymous said...

AC: "Notwithstanding the occasional mad cow, "

Do you mean Edwina Currie? She who almost single handedly destroyed the British poultry industry with her hysterical policies on Salmonella?

AC: "farming appears to be alive and well in the UK."

Yes, we need British farmers to get back to farming the land rather than the government subsidy system.

That means destroying the CAP or leaving the EU.

By the way:

http://en.wikipedia.org/wiki/Set-aside

Alice Cook said...

Anonymous,

I will educate myself in set-aside.

But doesn't destroying the CAP means destroying rural France?

Alice

Anonymous said...

So we are told Alice. The people demand cheap food, but also want food security. We have to find a compromise position which achieves both aims.

If the Average household is chucking out, what was it up to 1/3 was it of the food they buy? , then perhaps the graph really shows a stable contribution from our home sector to a growing overall demand, a lot of which is being binned. A disease of affluence perhaps? I see the curve ticking up a bit at the end, as the recession begins perhaps?

Anonymous said...

Alice Cook: "But doesn't destroying the CAP means destroying rural France?"

Suppose it does, which I doubt*, I would have thought the influx of foreign British part time residents would more effectively destroy rural France. But suppose it does, why should the British food shopper pay more tax (which is what the CAP represents) so that rural France should have it easy? If the French people think that Rural France warrents 'saving' then they should pay for it. Otherwise they might do better to make their farms more efficient.

*Rural France has been there a very long time you know, it has survived war, occupation, bloody Revolution and all without a penny subsidy from Britain.

Personally, if you are going to go all sloppy about a country, why not Italy or even at a push, Spain?

Anonymous said...

There are many farmers out there who would like to see the CAP system finished. Why wouldn't they, when they can earn more from farming land than having it in seaside?. It would mean that a far greater transparency and, once the dust settles, realistic pricing. The French would moan like hell but thats hardly news.

Farmers have not been treated well by the supermarkets and the consumer in general. Often there is an assumption that they will go on and on selling at below the cost of production. Meanwhile food has been though long periods where the consumer has spent smaller and smaller proportion of their income on food (compared to ANY time in human history).

This financial crunch might finally break the CAP but will the EU ever get the audit it deserves?

Anonymous said...

I'm confused!

In WW2 we barely managed to feed the nation, and that was with everyone growing veg, owning chickens etc.

Now we have a much bigger population, with greater consumption, with little home produce and farmers setting land aside. Ok yields have increased due to chemical fertilisers, and pesticides, but even so the figures look a bit optimistic.

sobers said...

As a farmer I'll dare to stick my head above the parapet.

The subsidy farmers get is really a subsidy for the consumer. Without it, the vast majority of farmers in the EU would not be profitable. Without profit they would cease farming. Reduced supply equals higher prices in the shops. The subsidy ensures plentiful supplies of food reach the supermarket 24/7/365. In a nation as crowded as ours, making sure there is food in the nation's bellies is crucial. A few weeks with no food in Tesco would probably result in riots.

Historically food prices see-sawed violently. Because you can't increase production at the touch of a button (you can only harvest what you sow 10 months earlier, and cattle take 2+ years to reach maturity for slaughter), there are good harvests (plenty of supply, low prices) and bad harvests (low supply, high prices). The CAP subsidies artificially increase supply, meaning the boom and bust years are smoothed out, at lower overall prices.

Now it could be argued 'get rid of the subsidy, let the farmers go bust, and we'll import cheap food from abroad'. This entirely do-able. There are however a few drawbacks. One, you are then reliant on 3rd parties to feed your nation. In the same way we are reliant on the Middle East for our oil. You would be open to suppliers unilaterally demanding higher prices. Second, not all foods are easily transported long distances, fresh milk for example. Thirdly you would have no control over the welfare and environmental conditions your food was prepared under. Finally, you have to pay for it by producing something else instead that the world wants.

Most UK farmers would be prepared to see subsidies go, if there was a level playing field. If there were the same requirements on welfare etc on imports as home grown produce. What they could not cope with is no subsidy, but having to comply with strict welfare and environmental rules that raise costs but do not apply to imports.

Oh, and yes set-aside did come in in compulsory form in 1991/2 (it was voluntary from about 1989 I think).

Patrat said...

Any understanding of post-WWII agriculture has to start with the 1939-1945 wartime experience when the UK approached starvation at one point.

The 1947 Agriculture Act set the scene for the next 3 decades with technology, agro-chemicals and breeding giving increasing yields until the problems with the Common Agricultural Policy and the various 'mountains and lakes' gave rise to a significant change in policy over production.

Anonymous said...

Sobers: "The subsidy ensures plentiful supplies of food reach the supermarket 24/7/365. "

Mechanisation and intensive farming do that, subsidies ensure that the price signals of the market are frustrated. That just ends up with farmers producing more of what might not be wanted and causing the real market price to fall further.

Just recently we were hearing of sheep being worth (oh! I don't know £10) at market, did subsidy help in that instance?

Are you really saying the small family run farms in for example France should survive at the expense of the more intensively run farms, in say, Britain?

Sobers: "A few weeks with no food in Tesco would probably result in riots."

Yes, I wonder how many people actually have a store of dried, long life or preserved food. It only takes a minor disruption of supply for the queues to form, panic shoppers and as you say, riots.

I wonder if JIT when applied to food is altogether a good ides?

sobers said...

@Patrat: I remember seeing a program on TV about the Post War period, and the Marshall Plan, that said that in circa 1947 the country was so broke the govt drew up plans to implement starvation rations, we had so little food in stock, and no money to buy it with abroad. Fortunately they managed to get by somehow but it was a close thing.

@Anonymous07:44: Farming wouldn't be able to afford the mechanisation and new technologies that increase production, without the stability of income that subsidies supply. We would go back to more basic, less intensive small scale production methods. Good for the environment and wildlife maybe, but not good for yields, or the consumer (higher prices).

As for subsidies masking market forces, that is no longer the case. CAP subsidies are no longer tied to production. Prices are determined by supply and demand, hence the £10 lambs you mention, and the fact they are now £70-80 each. The subsidy allows the farmer to continue production in the low years, when otherwise he'd go bust.

electro-kevin said...

"Yes, I wonder how many people actually have a store of dried, long life or preserved food. It only takes a minor disruption of supply for the queues to form, panic shoppers and as you say, riots." Anon at 7.44

Err... well I do, actually. And friends think I'm a total nutcase. "There's no need to panic buy, Kev." But that's my point exactly - I'm not panicking. I have a month's store which is used and replenished on a use-by basis so nothing is wasted. (Water would most likely be in short supply too so I go for tinned foods myself.)

My concern is not with some biblical catastrophe, but with a disruption in JIT supply. The idea of shelves being empty within three days is sobering and I wonder what contingencies any readers with Special Forces experience are making (in fact I already know the opinion of one)

The idea of fighting chavs over a bun in the Tescos car park is unappealing. So now I can tell them to 'bog off !' with some confidence.

Every little helps.

;-)

Patrat said...

Sobers:

There was a recent three-part series on BBC4, called Mud, Sweat & Tractors: The Story of Agriculture, that detailed post-War agriculture and explained the changes in dairy, tomatoes & strawberries, wheat, and beef. The 1947 Act seemed central in allowing for planning and investment which along with technological change, lead to the post-War agricultural revolution.

What seems to be in danger of being forgotten is national food security; free markets certainly do not provide in times of emergency and significant shortages.

sobers said...

@ Patrat: precisely - the 1947 act introduced guaranteed prices for produce for the first time, giving farmers the incentive to buy new machinery, expand their farm sizes, and generally increase efficiency. Without that there would never have been the massive increase in production over the last 60 years.

I also agree that food security is important - again another reason why maintaining a national food production capability is vital. Without the subsidies, all our cereals would come from Canada or Australia, our meat from Brazil, Argentina and New Zealand.

Like Electro Kevin, I keep a supply of canned goods in hand. If the JIT deliveries failed for any reason I wouldn't want to take my chances in Sainsburys carpark with the rest of the population.

Half The Story said...

I see this also fell during New Labour time in power.

Anonymous said...

You don't seem to be reading the comment by the farmer, who makes the point that food is subsidised to induce over-supply in order to avoid the consequences of bad harvests.
The consequence then, of leaving food production to the market place, i.e. unsubsidised, would be that when there were bad harvests we wouldn't have enough to eat.
Not having enough to eat is bad, so let's leave the subsidies in place.