Best foot forward as show leaps out of stalls

Published on Thursday 25 June 2009 21:54

YESTERDAY'S launch of the 225th Royal Highland Show at Ingliston saw the occasion attract one of the largest crowds for many years.

The mood was upbeat, with many smiling faces and a general sense of anticipation that the farming industry may be on the brink of a much more positive era, despite the global recession.

However, the fact is that while demand for food is set to increase, production in Scotland, and throughout much of the EU, is in decline.

The root cause of this trend lies with the 2003 reforms of the Common Agricultural Policy (CAP), which "decoupled" subsidy payments from levels of production.

Farmers were then permitted to collect the Single Farm Payment (SFP) almost regardless of how much more, or more frequently less, they produced.

Six years ago Ross Finnie, Holyrood's agriculture minister at the time, returned from Brussels hailing the deal he had secured as being particularly suited to Scotland's farmers.

Many agreed at the time, but subsequent events have cast a shadow on that jubilation – with numbers of both cattle and sheep in serious decline.

Jim McLaren, the president of NFU Scotland, gave just the briefest of hints yesterday that there may have to be a major re-think as the industry moves towards the next reforms of the CAP, which are likely to become effective in 2013.

He said: "Although 2013 may seem distant, the reality is that timetables are incredibly tight and the work that takes place in the coming six months will shape Scottish farming for many years."

The attitude of the Scottish Government to CAP reform is liable to be influenced by the report of Brian Pack, the recently retired chief executive of ANM Group, one of the largest farmer-owned businesses in the UK.

Pack, an economist by profession, is reputed to have expressed his reservations over the 2003 CAP reforms.

He indicated that production would continue to decline if there was no link between production and support.

He may well have been proved correct. One leading auction mart on the border between Scotland and England reported that over the past year it had sold an extra 136,000 sheep than in the previous 12 months.

That sounds like good business, but of that total, 14,000 head were reckoned to be potential breeding stock that were instead sold for slaughter.

A rival auctioneer said: "We are seeing this all the time – it's the silent dispersal of the sheep industry."

Much could also be said of the beef sector and many of the major processors now fear that they are close to losing "critical mass".

However, there is a huge disparity between the Scottish view and that prevalent in England.

Scottish farmers are well supported, to the tune of over 450 million a year.

The Scottish Government contends that this is money well spent: not so Whitehall and the UK Treasury.

The perceived plan in London is very much one of getting rid of all support for all farmers as soon as possible

But McLaren thinks otherwise. He said: "A one size does not fit for everyone, and it is clear that Scotland needs to have a louder voice.

"As time moves on, basing public support on decisions made almost a decade ago becomes more difficult to justify."

McLaren has sense on his side of the fence; some farmers are receiving only 6p per hectare as the basis for their SFP cheques, while others, with little justi- fication, may be harvesting as much as 3,900 for a similar area of land.

McLaren clearly understands that this cannot continue.

He added: "There are going to be a lot of changes in the next few years, but we at NFUS believe that the whole question of food supply must be seriously addressed."