At last week’s uplands conference at Newton Rigg, speaker after speaker pointed out that upland farming wasn’t really profitable. Different speakers, and different participants, drew different lessons from this.
One of the best speakers at the conference was Neil Heseltine. I’m told he’s a good-looking young man (it’s difficult for me to tell) but I can tell you he is a very good speaker.
Neil told us that he is a sheep-farmer from Malham in Yorkshire. He obviously loves his sheep. We saw images of his sheep in various stages of shorn, partly shorn and unshorn (Shaun the Sheep anyone?). We saw his sheep winning prizes at the local show. We got to know his sheep. Neil is a sheep farmer.
When Neil told us about the economics of his farm things looked a little different. The gross margin (to simplify – profit) on Neil’s sheep enterprise was less than £500 a year. That’s for all of his sheep – not per sheep. All that work and love that went into sheep produced only c£500 income for Neil and his family. Wow!
Neil has some cattle too. He obviously isn’t quite as enraptured by cattle as he is sheep. I think he told us that the cattle mooch around the hills a bit, need a bit of help sometimes when calving, but basically just get on with it. The gross margin from the cattle mooching around was £11,500. But Neil is a sheep farmer. That’s how he, cleverly, portrayed himself in this talk and where his heart is.
There are a couple of things I would mention here.
First, Neil’s story rang bells with me. I would probably describe myself not as a sheep-farmer but as a writer. I spend most of my time writing books and articles – oh yes, and blogs. I love it and that’s what I want to do. I’m not complaining. But when I do my tax returns every year it is brought home to me that I earn most of my meagre income (though I really am not complaining) from consultancy. The work I do, almost exclusively for wildlife NGOs, is my main source of income. Consultancy is my herd of cattle, and books, blogs and articles are my sheep.
And that brings me on to my second point. Money isn’t everything. If Neil wants to be a sheep farmer with a few cattle on the side that’s fine by me. He might be richer if he shifted a little more towards the cattle (if that is feasible) but it’s not really my business. If I were totally focussed on maximising my income I would be chasing consultancy money, and not have turned down lucrative offers from people (companies) that I do not wish to work for.
Another of the speakers, Robert Sullivan from Strutt and Parker, told a similar tale for upland farming overall. His point, or at least the point I took away, was that profits on upland farming are low. It’s not surprising is it, trying to grow anything at the top of a hill on poor soils is difficult? Robert also pointed out that there is a lot of variability in gross margins which must partly be due to different circumstances of farm size, topography and location but is also due to a wide variety of skills and varying efficiency amongst farmers. The ‘best’ farmers are much better than the ‘worst’ farmers in turning a profit. That is, if they make any profit at all on farming.
The truth is that many upland farms don’t actually make any profit at all from farming. How do they survive then? They survive because they receive income support from you and me through the single farm payment and, if they choose, they get money by signing up to agri-environment schemes and are paid for trying to produce wildlife as a public good. Most of the income of a typical upland farm comes from payments from the taxpayer, not from producing food.
I’m totally happy with that. I like the idea of my taxes, and those of a nurse in Newcastle, and those of a guy with dreadlocks in Brixton Station Road, going to Neil and others to produce the type of upland that we want. I noticed the lack of nurses and dreadlocks in the room in Newton Rigg – there was quite a lot of tweed, though.
Neil’s talk, of course, mentioned that grants and subsidies were a bigger earner for him than either sheep or cattle. This topic came up quite often in the conference, but no-one, until I, said that what this means is that upland farmers are working for the taxpayer – me, you, a nurse in Newcastle and the guy with dreadlocks on Brixton Station Road.
Some of the conversation around the conference, not the talks, but the chat, was along the lines of ‘We farmers are doing a great job, give us more money and take away the red tape’. I can understand that point of view. Farmers would be less keen on this point of view ‘We taxpayers are doing a great job keeping you in profit even though some of us are pretty strapped for cash right now. We are paying quite a bit to help you maintain your lifestyles. We’d like a bit more return on our investment. And, actually, a bit less moaning and a bit more thanks, please’.
I guess, since the word ‘balance’ was used such a lot in the conference (although there were some pretty unbalanced examples of its use), that the middle ground is something like this ‘We want the uplands to be populated and productive. They are important to us in so many ways – mainly not crudely economic ways. Those of us who live in towns are paying for the activities that happen in the uplands through our purchases, and through being tourists, but to a very large extent through direct income support and environmental grants. Land owners need to recognise that everyone has a say in how the uplands look and what goes on in them because everyone is paying for those activities. Let’s work out a future for the uplands that is equitable and productive for all. I think that may require some changes, and a move towards rewarding land owners for ecosystem services should be part of that readjustment.’.
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Mark. Good article (indeed the kind I enjoy most from you) and I would agree with much of it. But there’s something we all need to be careful with. Net Farm Income is an interesting concept but it does not equal your income as a writer/consultant. If your business paid for your salary, the mortgage on your home, the fuel and depreciation costs of your vehicle and a salary for a family member to do your books, what you would have left is your ‘Net Avery Income’. So, when people quote NFI as evidence of poverty, be careful in believing that. Equally, if you take from this data that hill farming as a whole is unviable because of generally low NFI then that would not be true. There is great variability in farm incomes and lobby groups often quote the extremes to suit their case. Many medium and large hill farms are very profitable and my hunch is they would be so without subsidies. So the arguments some writers make that if you got rid of CAP payments no-one would farm the uplands is, to me, simplistic. But I do agree with your analysis that whilst such a large proportion of hill farm income is down to subsidy, we as a nation need something back in return.
Jim
Jim – thank you. You know what you are talking about and so I value your comment.
4000 years ago on the side of a hill called Tarnmonath at 1000 ft which I see from my house was arable farming. It was there because the soil could produce crops and also because it was safer high up for the people doing the farming than in the valley bottom. Our uplands are now a disaster due to mis management.
oh and a substantial and almost entirely natural change in climate.
A very good article Mark – many thanks.
The externalised costs of certain upland farming operations rarely get mentioned enough in this debate, certainly not by those arguing in favour of less regulation and increased pillar one support!
Jim Dixon is absolutely spot-on with a number of his points, NFI can be very misleading and some upland farms are very profitable.
It would be interesting to hear from advocates of complete rewilding in the uplands as to exactly how they would go about cleansing large areas of Britain of human habitation. I don’t think removing subsidies/grants would do it although it would certainly change the way things were run. Ultimately there wold have to be a legal framework in place to remove people from their homes and ban them from returning. This would have to be enforced by the state with the ultimate sanction of violence and is all state law. You would also I think have to demolish farm houses and buildings because otherwise people would probably just keep moving back into them. Imagine the parties you could have! I think you would also need to remove roads although that wold also make access for law enforcement harder.
And what about walkers, birdwatchers, hunters – and Mark Avery? 😛 Would these people be allowed in or not? On foot or in vehicles and if so what vehicles? Bikes? 4*4s? Disabled vehicles?
I wonder of total re wildling would lead to a wildlife paradise – or some kind of war zone.
I think you’re slightly caricaturing rewilding here. While rewilding zones would aim for a low overall human impact, I don’t think anybody is proposing clearances and exclusion.
Rewilding surely wouldn’t require the forced removal of people – just a change in emphasis in terms of what land use is allowed/promoted by law and by tax support, together with a change in gamekeepers’ and farmers’ attitudes. In Somiedo National Park in Asturias people have farmed cattle for hundreds of years and are proud of their history being amongst the first in Spain to support the ownership of cattle by non-nobility, but they live and farm alongside a thriving population of bears, as well as wolves, martens, genets, foxes, badgers and other smaller mustelids, not to mention the eagles and vultures. Imagine that at Malham.
Having said that, if you believe that rewilded uplands could serve a greater good for the nation than maintaining upland farms (and I think a case can be made for this in terms of our collective need for wild places to capture the imagination and improve our quality of life, as well as their improved capacity to lock up carbon and mitigate flooding) then why not use compulsory purchases as happens when we need a new road or railway line?
Giles,
People have been moved out of their houses and farms for canals, railways, roads, motorways, airports, reservoirs etc., with some protest maybe, but largely without a breakdown of society (perhaps excepting the exclusion of the poor indigenous human population from the fertile, profitable parts of Ireland in the 1800s). Anyway, Mark didn’t mention rewilding. And if rewilding is a more ecologically sustainable way of managing uplands, it does not mean that people have to be moved off the land – they would just have to learn to live with the changes – after all some of them (e.g. farmers) could be being paid to implement some of the changes.
Well to me re wilding entails the restoring of large areas of the country to a pristine ecosystem untouched by man not one with roads, footpaths, bridleways tourists, farms, electricity, houses, hotels, pubs, shops wind farms &c (but presumably just no farmers). That sounds more like an upland suburbia to me!
If we are talking about striking a different balance between human activities and natural processes then that’s an entirely different thing in my book because you’ve basically accepted that there has to be such a balance (which I for one do).
To me conservation is all about diversity and mosaics, let’s have more trees but also let’s keep open spaces and let’s have man with a central position in the landscape and not excluded from it.
“People have been moved out of their houses and farms for canals, railways, roads, “. That’s true but if rewildlng was a adopted as I characterise it this would be something way above that and more akin to ethnic cleansing such as during the highland clearances. If it’s decided to9 build an airport where I love now I at least have the opportunity to go and live somewhere similar. A complete exclusion of people from living and farming on the uplands would be destroying an entire way of life and getting rid of people’s heritage.
i’m not absolutely certain but I think the expression is “Aunt Sally”.
Why don’t we ignore this distraction and discuss the issue of getting some heart into the uplands?
I’d like someone like Jim Dixon to suggest what might happen in the uplands if I agitated to put an end to land managers in the uplands dipping their hand into my pocket and leave me to spend that on what I value.
Giles,
Interesting comment, although I suspect it was rather tongue-in-cheek! I have heard similar concerns expressed by others, most recently by an upland sheep farmer who had very strong views on George Monbiot and his book ‘Feral’. It transpired he hadn’t actually read ‘Feral’ and his view of ‘Feral’ and the concept of rewilding was based on erroneous second hand information passed on by those of a similar tendentious disposition.
I’m not arguing one way or another for rewilding; it may work in remote parts of Scotland or Wales, perhaps not in more densely populated upland areas such as the Peak District, but it does strike me that those implacably opposed to the concept of rewilding are trying to promote the notion that rewilding is an imperialist policy that will be imposed on unwilling landowners. A modern day equivalent of the Highland Clearances if you like.
George Monbiot, who I assume can be regarded as a proponent of total rewilding, does make it quite clear rewilding should not be imposed upon landowners, in fact he’s quite explicit about this.
The following quotation has been lifted from Moonbat.com:
‘The only thing preventing a faster rewilding in the European Union is public money. Farming is sustained on infertile land (by and large, the uplands) through the taxpayer’s munificence. Without our help, almost all hill-farming would cease immediately. I’m not calling for that, but I do think it’s time the farm subsidy system stopped forcing farmers to destroy wildlife.’
‘At the moment, to claim their single farm payments, farmers must prevent “the encroachment of unwanted vegetation on agricultural land”. They don’t have to produce anything: they merely have to keep the land in “agricultural condition”, which means bare. I propose two changes to the subsidy regime. The first is to cap the amount of land for which farmers can claim money at 100 hectares (250 acres). It’s outrageous that the biggest farmers harvest millions every year from much poorer taxpayers, by dint of possessing so much land. A cap would give small farmers an advantage over large. The second is to remove the agricultural condition rule.’
The effect of these changes would be to ensure that hill farmers with a powerful attachment to the land and its culture, language and traditions would still farm (and continue to reduce their income by keeping loss-making sheep and cattle). Absentee ranchers who are in it only for the subsidies would find that they were better off taking the money and allowing the land to rewild.’
http://www.monbiot.com/2013/05/27/a-manifesto-for-rewilding-the-world/
The guy with dreadlocks in Brixton Station Road – did he get there on the Clapham Omnibus?
….I’ll get my coat
“upland farmers are working for the taxpayer … … We’d like a bit more return on our investment ”
Is this required of other recipients of income support?
Filbert – No reason why not. I ran 24 unemployed folk on a job creation scheme taking folk out of town into the countryside. Majority loved it and achieved lots of skills like stone walling, tree management and fencing. The countryside needs these schemes now. Even farmers could benefit from them!!
Filbert,have you heard that joke that all conservationists really like farmers and they do not discriminate against them,they criticise all other recipients of their tax payers money.
What is really funny is that they talk about nurses etc paying these taxes and getting little back but it always seems the conservationists doing the complaining,do they think the nurses etc are incapable of complaining so they will do it for them.
When we get the very very small minority of conservationists in their rightful place ruling the world what a wonderful place it will be.Everything will be perfect.
“Filbert,have you heard” – I have now.
“Everything will be perfect” – just like in the Sears-Roebuck Catalogue
http://www.youtube.com/watch?v=VtTlCywIuoE
I’ve seen the film – weird and strangely compelling. I tend to avoid religion as it tends to bring out the worst in people, but being a fan of Jim White I watched it. Excellent soundtrack.
“strangely compelling”
There’s something about dereliction and a frailed banjo …
Harry Crews is worth a read – I liked “The Mulching of America” – but I’m not sure Ottle is ready for “Feast of Snakes”.
“I’m not sure Ottle is ready for “Feast of Snakes””
Another decade or two perhaps….but then again we do dereliction and the ukulele rather well, so one nevers knows!
Earnest again the usual anti subsidy and oh isn’t it all dreadful tail (with a bit of George Mombiot twist this time). It’s all so ill informed and just uses the lowest common denominator ie farmers own land thus they must be rich therefore the subsidy is obviously a manifest social injustice. However if you could somehow return UK farming to some idilic rural past where farmers were simple folk farming a small patch somehow everything would be okay. This is so far from reality it’s almost painful to hear time and time again.
The fact is that western agriculture is subsidised for mainly political and socioeconomic reasons and despite some counties such as the UK wishing that agriculture was more market orientated that remains a political decision. The failure of the GATT talks has meant that any trading block which removed production subsidies leaves it’s agricultural sector open to predation by cheaper subsidised imports. To date none have gone down this route however the UK has through various mechanisms managed to reduce direct payments to farmers for non environmental activities more than most.
The idea that these payments somehow line the pockets of some sort of elite landowning class is ridiculous. All agricultural inputs reflect the subsidy element received, do you honestly think that supermarket buyers or fertiliser manufactures discount the subsidy from their calculations.
You also say that payments should be capped to 250 acre farms and by thus I am assuming you are referring to the lowland rate for arable and mixed farms. If you can find any viable 100ha farms in the UK I’d be surprised. You are totally out of touch with the reality of current business in this sector today. A viable unit is in excess of 2500 acres and most are twice this area. The majority of arable land is farmed under various contract farming arrangements and the family farm of a few acres is I’m afraid a distant memory. All your social enginering would achieve is to accelerate this process.
Again you have provided more proof that the knowledge gap between those involved in primary food production and the rest of the population has never been wider and the lack of understanding and knowledge shown by people like Mr Mombiot is truly terrifying.
“You also say”
I think EM was quoting from GM
Julian,
Many thanks – great rant!
Pimms O’clock was it? Or perhaps you had left your reading glasses in the tractor cab?
Perhaps you may care to re-read my comment and that note that I was quoting George Monbiot in response to Giles comment regarding proponents of rewilding.
It’s rather ironic that I was using GM’s quote as an example of how many of those opposed to rewilding are prone to misinterpret, often quite deliberately, the arguments put forward by those in favour of rewilding, only to then be misinterpreted by yourself.
Within your entertaining rant you do make some good points that I’m fully in agreement with, particularly re GATT or WTO as it’s now called (keep up!). There is precious little the EU can do unless the US and others agree to follow suit. The majority of lowland farmers that I speak to and deal with on a regular basis wish that there was a no need for subsidies; they would willingly surrender all support payments providing their overseas competitors agreed to do the same. I can’t see it happening in my lifetime though.
For what it’s worth I’m not particularly in favour of capping payments, capping based on farm size always strikes me as being more to do with politics of envy than economics or the environment. I’m in favour of supporting farms that produce food for the nation whilst also doing their bit for the environment, whether that be through provision of habitat for farmland biodiversity, resource protection or the provision of ecosystem services. The size of the farm is largely irrelevant providing they are doing the job that we ask them to do.
“…do you honestly think that supermarket buyers or fertiliser manufactures discount the subsidy from their calculations” No – not for a single minute.
“If you can find any viable 100 ha farms in the UK I’d be surprised” I’m happy to defer to your knowledge of the arable sector, but I have to take issue with your on this regarding the livestock sector – particularly dairy. I have in front me the unaudited financial statements for y/e 2012 & 2013 for two dairy farms; a 97ha tenanted farm and 87 ha part owned, part-rented farm.
Let’s take the least profitable of the two businesses, the 97 ha tenanted farm, the net-profit over last the previous two financials years (y/e 2012 & 2013), averages £49.9K. These figures aren’t boosted by cheap family labour either as is often the case in the livestock sector as the accounts show of a figure of £28k for wages. Nor do the accounts mask a lack of investment, as they include sensible investment in farm infrastructure, including finance payments for a new shed and a slurry tower. Within the farm’s ‘unviable’ 97 hectares they also manage to find space for 2.5 hectares of wild bird seed mix plots and nearly 8 hectares of wet grassland with raised water levels which is managed for wading birds, that’s over 10% of the area of the farm.
The more profitable but smaller farm, recorded an average net profit of £73.4 k. Not viable? , I don’t think so Julian. Do I begrudge these farms their support payments? – No, not one bit.
“You are totally out of touch with the reality of current business in this sector today.” Thanks – but with regard to the dairy sector, I’ll bounce that one back to you old bean.
Turning to SDA farms, I do think a different approach is required to the one we currently have. We need to think along much different lines to SDA than we do to the lowland sector. The present system is just not working, have you seen just how run down and lacking in investment many of these farms are? The average age of an upland farmer is 60, where is the next generation of SDA farmers going to come from?
Personally I’m in favour of further increasing support payments to SDA farms, providing there is a significant emphasis on the provision of eco-system services. Overall it would save me, you, the nurse in Newcastle, and the chap with dreadlocks in Brixton Station Road, a hell of a lot of money and we’d get a better environment at the same time.
It seems utterly absurd that the Water companies in many parts of the UK are forced to spend millions cleaning up the damage to drinking water caused by unsustainable and in the main largely unprofitable SDA farming practices. I’ve not even mentioned the cost of flooding….
“GATT or WTO”
The name needed changing to GDTT, so they chose WTO as it was less damning
Of course there is another side to this that those who carry on about the payments farmers get from their taxes never seem to consider as it does not suit them.
How about those of us that during our farming lifetime paid or will pay many times more tax than we received in payments,did we get any thanks from the recipients of our tax payments?.You bet we didn’t,more likely we carried on getting a kicking for providing a substantial amount of what the 60 million inhabitants ate.
plus ça change, plus c’est la même chose …
When the farmer comes to town
With his wagon broken down,
The farmer is the man who feeds them all.
If you’ll only look and see,
I am sure you will agree,
The farmer is the man who feeds them all.
The farmer is the man (x2)
Lives on credit till the fall,
Then they take him by the hand,
And they lead him from the land,
And the middleman’s the man who gets it all.
When the lawyer hangs around
While the butcher cuts a pound,
The farmer is the man who feeds them all.
And the preacher and the cook
Go a-strolling down the brook,
The farmer is the man who feeds them alt.
The farmer is the man (x2)
Lives on credit till the fall.
With the interest rate so high,
It’s a wonder he don’t die;
The banker is the man who gets it all.
When the banker says he’s broke,
And the merchant’s up in smoke,
The farmer is the man who feeds them all.
It would put them to the test
If the farmer took a rest.
The farmer is the man who feeds them all.
The farmer is the man (x2)
Lives on credit till the fall,
His clothes are wearing thin,
His condition is a sin;
He’s forgot that he’s the man who feeds them all.
Fiddlin’ John Carson 1923
http://www.youtube.com/watch?v=-wFmr0QvVHk
“How about those of us that during our farming lifetime paid or will pay many times more tax than we received in payments”
Sounds impressive Dennis, but I do wonder if maybe you’ve fallen into the old dairy farmers trap of forgetting to account for Intervention ?
Dear Earnest, good reply ! I’d take you on as far as the viability of the milk sector goes as I suspect Farmers For Action would, it’s been deversated by imports and TB and I can believe that it makes any case at all for capping payments. Yes there are exceptions to any rule (for instance sometimes I have a G&t rather than Pims).
I note your point about your views on GMonb and echo your reservations. I find him rather quick to always go for the easy answer, not a deep thinker like yourself ! I also find his class viewpoint on everything rather tiresome especially as he’s a public school boy wouldn’t you know.
“he’s a public school boy”
It’s about time he left and got a job
Julian,
A decent G & T knocks a glass of Pims into a cocked hat wouldn’t you agree ?
Milk sector – at the moment the variance in profitability amongst dairy farms is really quite staggering and that’s largely down to two main factors; the type of contract and the ability of the farmer, the latter point being something Mark rightly mentions to in his piece above. One things for sure, the abolition of milk quota next April is really going to seperate the sheep from the goats!
Earnest I’m not up to speed on that one re quotas but I will watch with interest. Will UKIP bring back the Milk Marketing Board ! Maybe FFA and UKIP should join forces after all the fuel strikes nearly did for Tony Blair when the farmers joined in, now there’s a thought to ponder over a Pims !