The spell of warm, dry settled weather over recent weeks has allowed spring crop plantings to progress almost uninterrupted, in contrast to last autumn. Despite the Covid-19 lockdown affecting much of society, spring forage and arable field work is well underway.
Farmers and their suppliers have worked hard to achieve this throughout the pandemic restrictions. But in the medium term, farm cash flows will suffer both from the disease control measures as food service markets restructure and from the December 31st Brexit deadline.
Defra’s Total Income From Farming figures already tell us that the average farm is unprofitable without the Basic Payment support provided through the EU. Many farming businesses already rely on the income generated from diversified rural activities to enhance their farming cashflows – the Foot & Mouth disease outbreak in 2001 showed that tourism was worth 8 times as much to rural economies than agriculture.
But the Coronavirus lockdown restrictions have curtailed many of these diversifications – from farm tourism and events to children’s play farms – while putting pressure on farm shops and commercial property rentals. Even as the lockdown starts to lift, it will take time to return to previous activity levels.
To add to these losses, the phased seven-year reduction of direct farm support starts from 2021, with ministers adamant there can be no delay, even though details of the replacement Environmental Land Management scheme remain vague. As feared, the final reading of the Agriculture Bill in the House of Commons last week saw the large Conservative majority reject a number of amendments, including a delay in the support cuts and protection for UK agriculture against food imports made to lower standards.
The trade negotiations with the EU, the UK’s largest market for agricultural exports, are rapidly running out of time, as coronavirus soaks up government attention and resources. At the same time, trade talks with the US are starting. The UK is in a weak position against an increasingly embattled and unpredictable Trump administration which, in an election year, is unlikely to give anything away despite its earlier talk of ‘great trade deals’.
Brexit timetables were already tight, even before Covid-19 struck. The industry needs an extended period of negotiations to allow for its agricultural interests to be properly defended and for farm businesses to plan their way through this period of great uncertainty and change.