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Farmers View 20th
August 2008
About a year ago just now, farmers all over
the country were beginning to get light headed over the
dizzy heights that grain prices were achieving. Many an
observer, including my self, wanted to believe that the
farming industry had come to the end of a particularly long
and dark tunnel and that we had reached one of these points
where, after a long period of stability, everything was
changing, and this time it was for the better.
The twelve months, which have passed since,
have been a roller coaster ride delivering hope for some,
false hope for a few and despair for a others. One thing is
obvious, that things have changed and farmers need to
understand exactly how.
There is no doubt that the 2007 mid term
review of the Common Agriculture Policy was a vital change
to the way our industry is treated by government. No longer
would we be a ‘closed’ market where world prices had no
impact on what was happening in Europe. It was also vital
that the sectors of the farming industry that had become
separated from the real world of supply and demand
economics, should move closer to the market place.
The first problem this presents is
volatility. Anyone with grain to sell today will be aware
that prices can go down as well as up! Although well up on
the dark days of five years ago, current grain prices are no
match for those of the mid 1980’s. I predict that this
situation is only the first of many in the future where one
commodity or another may rise to a price peak then fall away
once again. Farmers will need to learn to read the signals
of the world market in the absence of the rigidity of
Europe.
The second problem is distortion. While we
are all suffering as a result of energy prices at the
moment, anyone who has to buy grain to feed livestock,
especially pigs or poultry, has taken a double hit in the
past year. Any business, which is buying one farming
commodity, and selling another, is exposed to market
volatility at both sides, multiplying the risk accordingly.
Farmers will have to live within the ‘boom and bust’ cycle
previously only familiar to those in the unsubsidised
sectors.
There will however, be real opportunities in
this new landscape. The traditional strengths of the
Scottish farmer could pay real dividends in this new
environment. Cutting costs by using less fuel and fertiliser
is not beyond the ingenuity of the current generation,
especially if they listen and learn from those who went
before them. This is not strictly about turning the clock
back however; it is something which every other industry is
currently addressing under the name of efficiency.
There is one other area where Scottish
farming’s traditional strengths could be about to put us in
a strong position. Our richly deserved reputation for
producing quality beef precedes us right around the world.
The indications are that at UK, European and world level,
beef is a commodity in shortening supply. Our product is not
only of the highest quality; it is also, after a long and
painful process, free from any doubts which might undermine
its reputation. We have something to sell and the world is
ready to buy it.
Previous Scottish farming Ministers have in
the past been very quick to use export bans or restrictions
on the export market to generate a quick burst of publicity
for themselves or their government. All to often they were
unable to do anything tangible for the Scottish beef
industry. An opportunity exists today for a Scottish
Minister to invest a little time and taxpayers money to help
the industry to re-establish its rightful place as a giant
in the beef export markets.
If Scotland’s government are ready to commit
to increasing support for an export drive, then Scotland’s
farmers are ready and willing to play their part in what
could be a success story of historic proportions.
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