Farmers take concerns over economic crisis to Holyrood

Allan Bowie has called for support from farmers
Allan Bowie has called for support from farmers
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A major rally to highlight the deepening economic crisis in Scotland’s countryside is to take place at the Scottish Parliament next week.

NFU Scotland yesterday called on all sectors of the industry – including young farmers, new entrants, crofters and the members of the supply trades – to join them at the event at 11am next Thursday.

The union said that with prices for virtually every farm commodity on the floor and having endured the wettest winter on record, Scottish farmers and crofters want all Scottish MSPs ahead of the May election to understand that the farming industry’s position as the cornerstone of the whole rural community is under threat.

NFUS president Allan Bowie said that the key driver behind the current crash crisis was the Scottish Government’s failure to deliver support payments to farmers and crofters because of its £180 million investment in a flawed IT delivery system that was “not fit for purpose”.

READ MORE: NFUS warns about slow rate of payment processing

“We want our MSPs to recognise the scale of the problem, the potential impact on jobs in the wider rural economy and the need for Scottish Government to take urgent and drastic action to resolve the IT and payment issue.

“The decision to ask farmers to come off farm at this time of year is not one that we take lightly but such is the seriousness of the situation that we feel it merits taking our concerns directly to the politicians,” said Bowie.

‘Cutting costs essential’ as commodity prices stagnate

With little hope of any major improvements in commodity prices in the short to medium term, farmers need to concentrate on controlling costs, a leading farming consultant asserted yesterday.

Graham Redman of farm business consultancy Andersons told a Scottish seminar that ensuring rents were reduced at the next round of negotiations was an important area where savings could be made.

“Rents have started to fall from their recent levels,” he said. “Ensuring that they get the best deal possible at the next round of rent discussion will be important for producers looking to get through the next few years.”

Redman said that while there had been a tendency for farmers to bid rents up in the past, often simply to spread fixed costs, this was no longer the case.

“And if the numbers can’t be made to stack up we are hearing increasing reports of people walking away from the deal – a factor which could send the rental spiral in the opposite direction.”

Addressing the Brexit issue, his fellow partner in the business, Richard King, said that while many of the questions farmers – and the rest of the population – were asking about life outside the EU would only be answered if the country voted to leave, he warned that even then there would be no quick answers.

“If the country did vote in favour of the Brexit option, don’t think that things will change immediately after the referendum. It’s likely that there will be at least two years of discussions before things are sorted out – and possibly much longer.”

READ MORE: Calum Kerr demands answers from Defra over Brexit impact

King said that with the current EU budget agreed up until 2020, this might set the time line if the country voted to leave.

However, he admitted that during this period there would be great uncertainty for all – but especially for those in the farming sector.

He said that if the uncertainty lead to a significant weakening of Sterling against the euro this could lead to a spike in commodity prices and support levels for UK farmers.

“However, it is likely that the euro will also suffer should the UK vote to leave so this effect might be minimised.”

On the possible support measures for farmers outside the EU, he said that while the UK’s spend on agriculture was £3.3 billion, it was possible there could be a net saving of £8.6bn to the UK by leaving the EU – but it was unlikely that this would be used for farming.

Admitting that devolved administrations could chose to be more supportive of their farming industries, he said that the devolved administrations would need to find farm support cash from their own budgets.