ELMS Gets Going
Over the last two years, the UK government has replaced the rambling edifice of the European Common Agricultural Policy (CAP) with the new Environmental Land Management Schemes (ELMS). This new dispensation is billed as being eco-friendly in so far as it gives farmers the option to be paid for land which they take out of production and give over to nature. In Scotland and Wales, the devolved administrations offer something more akin to the CAP, based on direct subsidies to farmers for particular agricultural goods.
The figures suggest, however, that farmers in England are spurning the eco-grants, preferring to focus on their core activity of food production. By Christmas last year, only 1,000 farmers in England had signed up for the £2.4bn environmental scheme since June. This is prompting a review of the policy at DEFRA.
ELMS does not pay eco-friendly farmers on the basis of the acreage of land given over to wildlife or woodland but in accordance with a variety of metrics, including soil health, air quality and pollution levels in local watercourses. In economic terms, the Sustainable Farming Incentive (SFI) – which is the most accessible scheme within ELMS – offers insufficient financial incentives to farmers at a time when food prices, and thus their revenues, are soaring. Farmers can receive £22 a hectare under the scheme (so long as they demonstrate increased soil quality); but the same hectare in East Anglia planted with sugar beet could yield £4,000 in the current market.
To put that in context, Savills estimates that at the end of September last year, farmland in East Anglia – pasture and arable – traded at an average of £22,600 per hectare. That figure was up 11.2 per cent on the same time last year and more than the national average of £18,800 per hectare.
The happy medium, many modern farmers think, is to surround a productive field with a 10-metre-wide margin of specially planted flowers and vegetables favoured by bees, other insects and birds. Intensive farming can be framed by intensive nature. Dave Goulson, professor of biology at the University of Sussex, has conducted pioneering research on how good farming practices can benefit insect biodiversity. He regards this as a critical and neglected field given the role of insects in pollination. Goulson has founded the Bumblebee Conservation Trust which advises farmers on how to help these remarkable insects flourish.
During Liz Truss’s brief occupancy of Downing Street, the government pledged to review ELMS. But environmental campaigners fear that its environmental impact will be watered down if rewilding and tree-planting are not incentivised further. Truss wanted to create new investment zones in which planning laws and environmental protections would be relaxed.
The Royal Society for the Protection of Birds (RSPB), the National Trust and the Woodland Trust described these proposals as “an attack on nature”. That is itself political. Conservationists like Matt (Lord) Ridley believed the proposed policy was about “the need to balance conservation with human needs at a time of rising food prices and a shortage of affordable housing”. Nothing has been said about these investment zones by Rishi Sunak’s government, as far as I am aware.
The SFI also entails time-consuming paperwork, keeping time-poor farmers away from their fields. Jeremy Clarkson, the popular writer and broadcaster turned farmer, and Ian (Lord) Botham, a legendary cricketer who now owns a grouse moor and campaigns on agricultural issues, are both demanding that farmers be freed from the “bureaucratic bulldozer of red tape”. They were the lead signatories to a letter submitted to DEFRA in October, co-signed by 4,716 farmers and gamekeepers, including the eminent campaigner Jamie Blackett. They expressed disgust with the “mountain of regulations” that beset those who manage the countryside.
Furthermore, farmers are having to spend tens of thousands of pounds on CCTV systems and other security equipment to protect themselves against criminal gangs which operate in the countryside. The word is that county police forces are failing to investigate rural crimes adequately; therefore, the criminals calculate that they can get away it. An estimated £40m of farm machinery was stolen from farms last year. Crop theft, diesel theft, burglary, fly-tipping and illegal hare coursing are constant sources of heartache for British farmers.
In this challenging environment, Lloyds Bank is piloting a scheme to offer farmers advice on how to make their businesses “more economically and environmentally sustainable”. The bank is offering loans of up to £50,000 for investment in projects which make farms more environmentally sustainable. The cost of running a farm rose by about one third last year due to massive increases in the ‘three Fs’ – fuel, fertilizer and feedstock. Input cost inflation for livestock farmers last year was about 30 percent. We should not be surprised if meat and dairy producers pass that on to consumers.
As for fuel, it was announced last week that the British company Bennamann Energy Ltd has adapted a tractor to run on slurry. The New Holland T7 tractor might help farmers to become energy independent. New Holland is a subsidiary of CNH Industrial which bought a stake in Cornwall-based Bennamann in March 2021. The technology captures methane from cow manure and then treats and compresses it for use as liquid fuel. The tractor’s fuel tank keeps the methane as liquid at minus 162 Celsius. Potentially, this not only means that farmers can stop burning diesel but also that they can reduce methane emissions attributed to cattle.
The Scourge of Food Waste
Another reason why food prices are rising is that, as a nation, we waste so much of it.
Before Christmas, reports circulated that some farmers were burning produce because a shortage of pickers – undoubtedly caused by Brexit − resulted in vegetables rotting in the fields. Some of this food was burned in anaerobic digesters which generate energy in the form of biogas, a compound of methane and carbon dioxide (CO2). Farmers benefit from about £750m of UK government subsidies a year to install and run anaerobic digestion plants, though Germany and Italy are much more significant producers and users of biogas than the UK.
Food waste occurring on farms – about seven percent of all food produced − is not included in the official estimates of total food waste. Some farmers have started to open their farms to volunteers who pick up leftover crops and distribute them to food banks in a practice known as “gleaning”. So, it is difficult to estimate just how much food is going to waste down on the farm – though a figure of three million tonnes is mooted.
British homes, industry and the hospitality sector throw away an estimated 10 million tonnes of food every year, according to the Waste and Resources Action Programme (WRAP), a government-funded body with charitable status, tasked to reduce food waste in 2000. That’s about £20bn of food purchases thrown out or about 156 kilograms of food per person per year. And only about two percent of that waste is composted – the rest ending up in landfill or in incinerators. A House of Commons DEFRA Committee report in 2017 reckoned that over 60 percent of this waste was “avoidable” in so far as it was still edible or could have been fed to animals. In the UK, feeding waste food to pigs and poultry has been banned since the 2001 foot-and-mouth animal pandemic. We are a wilfully wasteful society.
Food retailers – especially the major supermarket chains – claim to have a good record on food waste. But commentators like Tim Lang, author of Feeding Britain and professor of food policy at City, University of London, claim that retailers are adept at pushing food waste down the supply chain by rejecting wonky vegetables, for example, which are as nutritious as their symmetrical counterparts. They can also impose contracts on suppliers with weak price leverage. To their credit, however, UK supermarkets are now active suppliers of “sell-by” date foods to food banks and other social outlets, according to FareShare. The “best before”on foods is now disfavoured for obvious reasons.
Trade bodies like the Sustainable Restaurants Association are also encouraging best practice to minimise food waste in the hospitality sector. International studies show that consumers in low-income countries waste much less food than those in high-income countries. Surprise, surprise. That suggests that, far from being too expensive in the UK and elsewhere, food is so cheap that it is not valued. As Tim Lang writes, the problem in the 21st century is not that there is too little food – but rather too much.
Globally, there is an estimated $1trn of food waste per year, resulting in huge environmental degradation. If all food waste could be composted, then we could reduce the use of fertilisers, the run-off from which, with its high nitrogen content, is harmful to watercourses. We are paying a high price for food waste.
Trees Matter Too
A society that does not cherish trees is doomed. Sadly, our trees are under attack from an increasing number of pests and diseases such as ash die-back, oak processionary moth, canker stain, Massaria disease in plane trees and horse-chestnut leaf miner − not forgetting phytophthora which attacks larch trees.
Such tree diseases are often attributed to climate change. Yet higher levels of CO2 undoubtedly favour tree growth, since CO2 stimulates photosynthesis. A study from Ohio State University found that average tree-trunk volume in the US is 29 percent up on 30 years ago. Some European studies have confirmed that trees are growing taller.
Higher levels of CO2 are probably responsible for the increasing frequency of “mast years” when fruit yields are abundant. The conventional wisdom was that mast years occur once every five to 10 years in the UK; yet 2020 was a mast year and so was 2022. Mast years typically follow a warm, dry spring. The previous summer temperature is also a factor. Last year English oak trees were observed to bear exceptional crops of acorns.
Trees, together with wetlands, offer the most important natural carbon sinks. An estimated 13 percent of all global carbon emissions are sucked out of the atmosphere by forests. And yet local councils have declared war on trees, arguing that their root systems burst through pavements and that their leaves obscure road signs. Salting suburban roads in winter is also inimical to trees.
The tree diseases now being observed were all imported from abroad. As a member of the EU, our biosecurity was lax. Now, we should stop blaming climate change and focus on biosecurity.
Alternative Models
In Australia and New Zealand, agricultural subsidies and state control of agriculture were abandoned 40 years ago. After the UK joined the EU and ceased to be the principal customer for Australian and New Zealand agricultural products, both countries chose to change the model completely. Some corporations and institutional investors piled into farming but there are still vibrant, family-run farms in both countries. There is a consensus that farming should be directed by farmers rather than bureaucrats. As a result, New Zealand has become the “larder of Asia”.
It was interesting that last October the former environment secretary, George Eustace MP, claimed that the free trade deal signed between the UK and Australia in July 2021, “gave away far too much for too little”. This was a broadside against Truss, who negotiated the deal when trade secretary under Boris Johnson. He added: “We did not actually need to give Australia nor New Zealand full liberalisation of beef and sheep. It was not in our economic interest to do so”.
The UK imports about 40 percent of all the food and drink it consumes; but about 60 percent of food and drink served by the hospitality industry is imported. It is extraordinary that our near neighbours the Dutch are second only to the US in terms of the volume of agricultural exports, given the size of their country. The Dutch, historically, have taught us a lot. It was Dutch expertise that pioneered the drainage of the Fens in Cambridgeshire, Norfolk and Lincolnshire back in the 1650s, when Sir Cornelius Vermuyden drained the Great Ouse basin and built a network of sluices that remain today. The drainage of the Fens allowed England to become self-sufficient in grain.
Food security should be at the top of the agenda along with energy security, national security – and biosecurity too.
PS
Just as we thought things might just get a tiny bit better, this was another awful week for the UK.
Excess deaths are running at over 1,000 per week − the highest level for a half a century. Virgin Orbit’s bid to launch eight satellites from Spaceport Cornwall ended in ignominious failure. Teachers have already walked out in Scotland with their co-professionals to follow suit in England shortly. Ambulance crews went on strike, again. Waiting figures for accident and emergency services were described as “apocalyptic”, with 600,000 people waiting for more than four hours for treatment in the first week of the year. The Royal Mail was held to ransom by cybercriminals.
Prince Harry’s ‘grudge-fest’ reached ‘peak whinge’ with much of the US media in a lather of anti-British sentiment. Britishvolt, the start-up from nowhere which was going to catapult the UK into the front line of EV production, was sold for about four percent of its estimated value one year ago. It is still without a proven technology, let alone a factory. The Church of England, while drastically reducing the number of vicars on cost grounds, is allocating £100m to a fund to redress the consequences of slavery. About three million people endured Christmas in the dark because their pay-as-you-go smart meters were not topped up, even though British power-distribution companies are sitting on multiple billions of customer prepayments. The UK, having been de facto leader of the Ukrainian resistance under Johnson, followed the French and German lead on supplying tanks to Ukraine – 12 in all.
When the wheels fall off the car, it is tempting to blame the current driver, forgetting its previous drivers and owners and its entire service history. But don’t expect the passengers to empathise with the person at the steering wheel.
I wrote two weeks ago that Coronation Day (6 May) will be joyous. But my natural optimism is being tested.
Listed companies cited in this article which merit analysis:
- Lloyds Bank PLC (LON:LLOY)
- CNH Industrial NV (BIT:CNHV)