Arable sector's thoughts turn to a profitable spring …

Published on Sunday 2 March 2008 20:46

Sulphur has increased 300 per cent in two months but soaring cost of fertiliser bites deep

HERE we are in March already, one of the busiest periods in the farming calendar and no doubt arable farmers will be itching to begin sowing spring barley. The prospects appear enticing, with forward prices suggesting that there will be some profit in this crop after years of struggling to break even.

However, some seed barley is costing in excess of 400 per tonne. But fertiliser bills are more horrendous still. There are essentially three components of compound fertilisers – nitrogen, potash and phosphate, or N, P and K to most farmers. Nitrogen promotes foliar growth, but as it is largely based on oil, it has become increasingly expensive.

Potash is also soaring in price, largely as a result of a major mine in Russia being put out of production through flooding and it might take up to three years to restore that facility.

But the most worrying factor is the soaring cost of phosphate. The price of sulphur, an essential raw material in phosphate fertilisers, has increased by 300 per cent in two months and may go still higher. China, formerly a substantial exporter of phosphate, has imposed a ban on that trade to meet the burgeoning demand for its domestic market.

However, more worrying is the forecast that Brazil will this year tear up an additional 1.5 million acres of grassland to grow maize for the biofuels industry, with a predicted 100,000 tonnes of phosphate being diverted from the European market as a result.

In practical terms, for the UK arable farmer this means the cost of growing a single tonne of wheat is perilously close to 100 a tonne and that could go still higher if fuel prices move upwards again.

The arable farmer has no option other than to use fertilisers to grow decent crops. But the livestock producer can go some way to circumvent added costs. He can step up the clover content of grass seed mixtures – clover fixes nitrogen from the atmosphere. Another approach is to make far better use of slurry and farmyard waste. At the recent Scottish conference of the Royal Agricultural Societies, Jim Brown from North Lanarkshire detailed how he plans to follow this path. Jim, who gave up dairying just over 18 months ago, is now a very large beef producer. In the past, he would purchase at least 150 tonnes of fertiliser each year.

He reckoned the cost would be about 15 per acre, but at current values this would have jumped to 30 per acre. The Brown solution for 2008 is to buy just 15 tonnes of fertiliser and invest 70,000 in a slurry store. Hopefully, the business will be able to operate in future with no artificial fertiliser. That 70,000 will not take long to recoup.

If the farmer needs seed and fertiliser to grow crops, then he also requires labour – an increasingly scarce commodity. Thumbing through the classified pages of a farming magazine, I was struck by the number of adverts seeking skilled workers.

It made me think a shortage of labour might soon have a serious impact on productivity. Much has changed in the relationship between employers and staff over 100 years. Those with long memories will still recall workers being referred to as farm servants. Can there have been anything more demeaning?

Skimming through the late Dr Robert Shirra Gibb's eminently readable A Farmer's Fifty Years in Lauderdale, I was struck by the chapter relating to how he engaged his staff on becoming the tenant of Boon Farm in 1872.

The business was conducted at the "hiring market" in Earlston and involved those seeking employment hanging around until they were offered a position. It all sounds little better than a cattle market, but this was the system practised in Scotland until well into the 20th century. For many it was little better than serfdom.

Thankfully times moved on rapidly, especially after the 1939-45 war, but I still venture the opinion it is only in the past 30 years that the contribution of the agricultural labour force has come to be truly appreciated. Farmers can buy larger equipment, use machinery rings and provide stock workers with ATVs (all terrain vehicles), but labour remains an integral part of the industry.

For the most part today's agricultural technicians are highly skilled and supremely adaptable. That is why I believe that the retention of the Scottish Agricultural Wages Board is an anachronism and that it should be consigned to history with immediate effect.