COVID-19 and farming – A bitter harvest?

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An image of a farming landscape in Ireland

 

2020 was already set to be a challenging year for farmers across the UK. Having finally reached an agreed Withdrawal Agreement with the EU, the UK is set to formally leave the EU at the end of the current transitional period in December 2020.  As a result of this decision, the UK and each of the devolved administrations were facing major changes in terms of how they would be supporting farmers outside the current Common Agricultural Policy (CAP) framework. There were concerns amongst some local stakeholders around the impacts that such moves would have on the nature and viability of agriculture here.

As it has turned out, the plague on all our houses, COVID-19, has made an already challenging year even more challenging. Farming is a volatile industry at the best of times and COVID-19 has brought new challenges for local producers. The introduction of the UK lockdown on 23 March 2020 had a direct and almost immediate impact on the market and demand for many kinds of farm produce across the UK. The shutting down of the hospitality sector in all of its myriad forms in particular had a massive and immediate impact on prices for beef and lamb in particular. DAERA market data for 2019 and 2020 highlights the drop in prices for different classes of beef this year, and more particularly since week 13 which began on 23 March. The Ulster Farmers’ Union has lodged their concerns around the price reductions for lamb and beef and have provided a practical assessment of their impacts on farm incomes. According to UFU analysis published on the 10th of April 2020, the recent falls in the price of beef and lamb would have equated to individual farmers seeing a loss of £76 on a 380kg U-3 grade steer carcass and a loss of £14.30 on a 22kg lamb carcass. It should be said that the latest DAERA market data for this week does, however, suggest a slight recovery in sheep prices but a continuing decline in beef prices.

The impacts on pork and chicken from COVID-19 do not appear to be as profound at this stage with market data highlighting relative stability in the price of chicken and pork since the lockdown began on 23 March. Whilst the price of pork is performing better than that recorded during 2019 the price for chicken is lower in 2020 than it was in 2019.

With regard to milk prices, there is a lack of official data on the impact on COVID-19 on local milk prices at present. Major milk processors are however either planning to or actually making cuts to the price that they pay to their producers as a result of reduced demand and over supply. Lakeland Dairies for example, which is one of the largest processors  in Northern Ireland, acted to cut their March base price to 23.75p/litre, a cut of 1.5p/litre when compared to the February price. It remains unclear at this time if the price for milk produced in April will be higher or lower than the February figure.

In addition to the impacts on the price for their produce, farmers have also seen considerable disruption to the day to day operation of their businesses. The closure of livestock marts, suspensions of bovine TB testing and farm inspections, and changes to working practices or product ranges offered by agricultural suppliers have all presented challenges. The suspension of bovine TB testing in particular has been viewed by some as concerning as it is effectively meaning that farmers operating under animal movement restrictions due to positive tests have no way out of that status. An additional, wider fear is that without testing the disease incidence across Northern Ireland may rise sharply, post lockdown. This fear is based on the rise in bovine TB incidence that was experienced in GB following the suspension of testing during the 2001 Foot and Mouth disease outbreak.

The horticultural, and more particularly fruit sectors, within Northern Ireland could also be vulnerable to COVID-19 in relation to their ability to access seasonal labour during the busy harvest periods later in 2020. Existing COVID-19 measures on movement both into and within Northern Ireland could well present challenges here similar to those being experienced in GB.

Whilst the picture may appear bleak, now is perhaps a more pertinent time than ever to remember the words of the late Canadian journalist Brian Brett, who famously quipped that farming is a profession of hope. So where is the hope for farmers in this current crisis? The following observations may provide some grounds for optimism.

Financial support or relief

Local farmers can currently apply for the UK Government’s Self-employment Income Support Scheme, and farmers who meet the eligibility criteria will receive a taxable grant worth up to 80% of their average trading profit in previous years. HMRC will pay this, capped at £2,500 a month, for a period of three months and this will be paid in one instalment. In addition, UK farmers will also be able to apply for the so called Bounce Back Loan Scheme which is due to be launched by Chancellor Rishi Sunak on the 4th of May. The loan scheme will enable small and medium-sized businesses to borrow between £2,000 and £50,000 over a 6 year period with no fees or interest being charged in the first 12 months.

The EU is also bringing forward a support scheme that will potentially have indirect benefits for local farmers. EU proposals include support for so called private storage aid. This will effectively mean that dairy (skimmed milk powder, butter, cheese) and meat (beef, sheep and goat meat) products can be temporarily withdrawn from the market for a minimum of 2 to 3 months, and a maximum period of 5 to 6 months. The purpose of this scheme is to reduce over supply and bring price stability. Indications are that the UK will be able to avail of this support up until October.

A growing public awareness of the value of local food producers

Whilst the public focus has often been on the frontline staff in the NHS there has also been a growing realisation of the role that food producers make to the functioning of society. Shortages for certain goods and having to queue either in person or online to purchase them has seen many people looking for alternative ways to secure their food. Many local producers are responding to this need whether it be in the form of goat meat boxes posted from North Antrim, freshly picked vegetable boxes from Saintfield or milk and cheese delivered to your door in County Armagh. Whilst the adoption of such approaches will not suit every farm business, there is an opportunity for all food producers here to build upon both the success of these approaches in terms of their showcasing of local food and the public’s growing awareness of the enhanced services that these local producers have brought. Whilst price will always be a key motivator for consumers, COVID-19 has definitely brought a growing awareness of the value of provenance and service that local food producers will hopefully benefit from.

A growing sense of the need for UK future food policy to address issues around food security and the functioning of the food supply chain

The UK Agriculture Bill is currently making its way through Parliament; this is designed to provide a legislative framework for agriculture, and more specifically, agricultural support schemes across the UK as the UK leaves the EU. It contains provisions relating to food security and the functioning of the food supply chain. The COVID-19 pandemic has put these provisions in stark relief, and could potentially lead to both greater scrutiny of the provisions and any associated powers. Such moves may be significant as they could potentially address some of the concerns that have existed around the validity of the provisions in terms of their scope and resources. Additionally, and in direct response to COVID-19, the Agriculture, Environment and Rural Affairs Committee at Westminster has initiated a Committee Inquiry into COVID-19 and food supply that is going to look at how disruptions in the food supply chain should be managed. The Committee will initially identify current problems and strategies for mitigating potential risks.

In concert, these developments are potentially providing a real opportunity for farmers to both highlight their contribution to food security and the functioning of food supply chain at a time when both are being extensively tested within the public eye. In particular, there may not be a better time for farmers to effectively register concerns that they have had around the functioning of the supply chain and the role and power of producers, processors and retailers within it.

 


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