Lesley Riddoch: Co-op should hedge bets on farms

The Co-operative group is to sell its farms to shore up its banking business. Picture: Reutrers
The Co-operative group is to sell its farms to shore up its banking business. Picture: Reutrers
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AN enlightened approach is needed when dealing with the sale of Co-op properties, writes Lesley Riddoch

The typical Scottish hedge once contained hawthorn, beech, wild rose and hazel, birds, bees and biodiversity. Then the banking crash forced a new, alien meaning into our lives. Now Scotland could restore loss of environmental habitat, social value and linguistic meaning in one fell swoop. Indeed – this week there are two chances to evict failed bankers, their outlook and vocabulary from public life and start to put land, small-scale farming, local food supply chains and ecological food production back at its centre.

Admittedly – the first move is a long shot. Scots with money and clout could respond boldly to news that the Co-op means to sell 15 farms to bail out its collapsed banking operations. The Scottish Government, campaigners and ethical investors could combine to offer a price for the Co-op’s three Scottish farms and lease or sell them to new entrants – or existing tenant farmers – as a Scottish social enterprise, co-operative or workers’ buyout.

The second move could take place when the rural affairs committee meets at Holyrood to consider subsidies paid under the Common Agricultural Policy. It could call on the Scottish Government to immediately end the outrageous practice of slipper farming where “farmers” – sometimes without land, animals or even farms – receive millions in subsidy.

Holyrood could also switch funding to encourage new entrants into small-scale farms paid solely on the strength what they produce. And production could be widened to include grassland, carbon gas reduction, market gardening, agri-forestry, weekend huts and cabins, education for teachers, children and members of the public and greater biodiversity through the reinstatement of the humble hedge.

Let me declare an interest. Last year, horrified by yet another misselling scandal at Lloyds TSB, I switched to the Co-op Bank. It was a good move. One number got straight through to friendly staff, the online banking system was simple and paying in cheques easier than ever via the local post office. I even liked the fact I was asked 20 questions to establish if I was an ethically sound customer. Then – disaster. Under the stewardship of chairman Paul Flowers the Co-op bank had developed a £1.5 billion hole in its finances and a rescue plan approved in December effectively handed control to city investors and hedge funds. Now the Co-op is to axe 4,000 jobs by 2017, sell farms and possibly 750 pharmacies to cover its banking losses.

As one tweeter commented online: “Sadly the Co-op lost its ethos a while back. They tried to be a competitor to corporate business, forgot their customers, gave up on the ‘divvy’ and priced themselves out of the grocery sector. The Rochdale Pioneers would be miffed to see this ending.”

But does it have to end this way?

If Co-op farmland is snaffled up by agri-business, the UK will not just have lost the largest enterprise run on co-operative or mutual lines in the UK with millions of members and tens of thousands of activists on local boards. It will also have lost land controlled by a company with better than average ideas about stewardship, and a democratic ownership structure.

As one commentator put it: “Why not sell the bank to finance the farms?”

Why not encourage those with cash to invest in a dead cert – a genuine co-operative running three Scottish farms? After all, prices may fluctuate – especially since speculators have moved their gambling activities from financial products to commodity markets – and everyone needs food. But the new owners of the Co-operative Group haven’t revealed if the Scottish farms are owned or leased and are adamant they won’t break up this “integrated UK business”.

Why not? If the Co-op was serious about getting the best price for shareholders it would subdivide its land into manageable smallholdings. When this has happened, local people have bought shares of £500 each – in the knowledge farming investments get a better return than any bank. In fact the Co-op bank itself could offer a savings account secured on the strength of its land. But the way it is now run, it won’t.

The expectation is that a multinational juggernaut will snaffle up the farms, once the lynchpin of the Co-op’s food business, and farms will become yet another disposable asset in branch economy Britain.

That’s a particular shame because Co-op farms pride themselves on helping wildlife and biodiversity, with eight farming apprenticeships, college training and education work. Last year 65,000 children visited Co-op farms – its one near Jedburgh has been particularly popular. That’s vital work. Half of pupils sampled in Glasgow recently didn’t know eggs come from hens. In Norway, by contrast, kindergarten co-locate with farms so children grow up feeding and caring for animals and grow crops like tomatoes to raise school funds. How sad such an idyllic vision remains a pipe dream in Scotland.

But it doesn’t have to be that way.

Councils, pension funds and housing associations invest in land as a long-term hedge against inflation – if they took a more enlightened approach, Scotland could take a big step forward.

Indeed, farming reform is long overdue.

Some farmers have sold farms but kept subsidies, while some subsidy “entitlements” have been sold to investors who are not farmers. Food campaigners such as Nourish Scotland maintain no competitive farming business should be dependent on annual, no-strings-attached public subsidy. They want a total cap on payments over €150,000 £123,000) a year – as Northern Ireland has done – and a switch of funding to smaller family farms to boost the local economy and social fabric because they are more likely to sell in short, direct supply chains, tend to have higher biodiversity and productivity per acre and create more jobs.

Wales is set to switch 15 per cent of CAP funding this way, England will shift 12 per cent, but the Scottish Government currently aims for just 9.5 per cent. Why?

The burgeoning growth of interest in allotments and food cooperatives suggests Scots want to get on to the land and grow their own. Land reform would make that possible, but meantime the Co-op could get good headlines by giving a Scottish social enterprise time to work up a bid. And the Scottish Government could change subsidy payments to encourage new entrants and transform food production.

Or we can hedge our bets and allow the juggernaut of “ae been” to crush innovation. It really is up to us.