Farm productivity is the key challenge
The Government should switch its focus from bio-diversity and concentrate on farm productivity if it wants to make the most of British agriculture’s potential as an engine for growth, NFU President Peter Kendall said today.
Speaking at the Agricultural Industries Confederation’s (AIC) annual conference at Peterborough, Mr Kendall warned that a combination of many years of low profits and chronic underinvestment in production-related research and development had left the productivity of British farming lagging behind its major overseas competitors.
"This current situation must be turned around if the industry is to make its full contribution to rebalancing the economy and getting the country back on to the path to growth," he argued.
Mr Kendall also questioned the Government’s stance on CAP reform.
"Defra Secretary of State Caroline Spelman said on Monday in Brussels that she wanted the Commission to be aware of the impact of its reform proposals on Wales, Scotland and Northern Ireland. No mention of England, you will note.
"What we, or the Government, cannot afford to see is English farmers used as guinea pigs in some sort of Darwinian experiment in whether the withdrawal of agricultural support kills or cures. We are happy to move towards reform as fast as the rest of Europe, and no faster.
"Even as it is, we face the prospect of seeing an area the size of Northamptonshire mothballed, and almost half the arable farmers in the country having their crop rotations disrupted, and yet still Defra ministers seem to remain interested in transferring money away from food production and towards the environment.
"The point is we haven’t got a bio-diversity crisis in this country. Most of the key environmental indicators have been moving in the right direction and almost 70 per cent of farmland is covered by an agri-environment scheme.
"However, what we do have is a productivity crisis. Wheat yields have been flat-lining for 25 years, and we have been falling behind competitors like the USA, Spain and Denmark, where Governments have been prepared to invest in production-related research.
"British agriculture has the potential to be an engine for growth in the economy. In the past five years we have increased output from £15 to £20 billion a year, while acknowledging some of this will be due to currency gains. Our gross value added has been rising by 6.2 per cent year on year. Food exports this year will show their seventh successive annual increase. In the first half of this year, they reached £5.8 billion, up by 13 per cent on the same period in 2010, and making food and drink the fourth largest exporting sector.
"These are not the figures of some sort of cottage industry, pottering around on the fringes of the economy. They are the figures of a major national industry, for which any other sector of the economy would give their eye teeth; figures which, for the wider economy, George Osborne can only dream of.
"And the really great thing about them is that they are the sort of figures that we can carry on delivering, provided the frameworks are in place to encourage farmers to invest and equip them with the tools to achieve sustainable growth."
