Farm Diary: Increasing nervousness over possibility of trade deal with USA

Given that its lambing time, it is vital that dogs are not allowed to chase and attack sheep, which most will, given the chance. Irresponsible owners spoil things for everyone else and its high time they realise that any dog is a threat to sheep and lambs. Crass ignorance has no place in the countryside when it comes to dog attacks.

There is increasing nervousness over the possibility of a trade deal with the USA and the lowering of our welfare standards which would let in US beef and pork. We know this is an issue the Americans are keen to pursue, not least because they don’t like the fact that we consider their systems to be below our high standards. The US is the largest exporter of pork in the world and our market is the only one in which they have less than a 1% share. In contrast, last year we exported £18.62 million of pork products to the USA with minimal tariff.

Post Brexit the beef that comes from the US into the UK has full UK duty on it and the paperwork and bureaucracy is considerable, which has meant that almost none comes in here. They then see Australian beef having much easier access into our markets than they do. This will not go away I fear and the pressure on our government is severe and there is a great deal at stake here.

Contrasting moves in our industry last week, as the NFU distances itself from the Inheritance tax issue and the demonstrations, in order to try and safeguard its lobbying role. Great damage has been done and the NFU relations with Defra and the government are at an all time low. The President, Tom Bradshaw now needs to break the doom and gloom narrative, whilst he acknowledges that some actions have gone too far and at risk of compromising access to government, with many Labour MP’s not engaging, as they fear abuse.

Given the high prices across the board, all the complaining and protesting has seemed rather silly and certainly unprofessional from the NFU. The protestors on the other hand, who live in their own little world and are destined to be disappointed as always. ‘Save British Farming’ reminds me of David Handley and ‘Farmers for Action’; lots of noise and protests, but no change. This time they are aiming to evoke Britain’s war time spirit (!), reminding us all of wartime food insecurity by taking farm machinery from that period to the Liberal club in Whitehall.

Their plan is to persuade farmers to attend with their dogs, so that they can remind everyone of the Great Pet Massacre, which took place at the outset of war and again when the bombs arrived in London and elsewhere. I am not sure this is quite such a good idea as most people are not aware of it, and historians describe it as panic measures, when in fact there was no need for such drastic action. We must learn from history they say, well let’s understand our history first and then learn from it.

A new study shows that 66% of farmers are worried their business will fail if handed over to their children. A further 42% express concern that their children might sell the family business, whilst 32% stated that if they thought a relative might sell, then they would exclude them from their will. This survey was carried out in September last year, before the announcement of Inheritance Tax by the chancellor. The main reason for lack of trust in others to run the business, apart from the often emotional and unrealistic expectation that this millstone needs now to be carried by someone else, was the lack of skills, experience, knowledge dedication.

Farmers also find it difficult to come to terms with the fact that someone else would be in charge of a business built up by them, through hard work and dedication. Farming businesses are unique, the survey stated, they are not just enterprises, they are often multigenerational legacies, often without clear succession planning. Even successful farms can run into trouble when the next generation takes over for many different reasons. There are often disputes as well as disintegration of a family business when it comes to who takes the farm and many run into trouble as there have been no dialogue or discussion about the future.

Farmers think they can go on forever, and it has been a running joke in agriculture that by the time the ‘boy’ is old enough to have the chequebook he is in his sixties. He will then be in turn reluctant to hand it over to his children until he has had his turn at the helm (another 20 years). Farms used to often deny the opportunity for sons to attend college (even agricultural colleges) as they were needed as ‘cheap muscle’ back on the farm. The other fear was that if they went to college, they might not come back! Worse, if they went to agricultural college they might come back with some new ideas.

We have battled with succession in agriculture for decades, and these days children are often educated and go off to live their own lives with their families, leaving the farm without natural succession. The inheritance tax loophole introduced not all that long ago made things far worse, with rising rates of divorce, fear gripped families when marriages took place, and the old man held on to the reigns just in case, and now many have been caught out.

It is ironic that many current farmers are owner occupiers, as a result of severe inheritance taxes (or death duties as they were called then), applied after both World Wars when the country was very short of money. This hit the large estates very hard and many were sold, with tenant farmers often the beneficiaries, buying their farms at very low values as sitting tenants. The landed gentry were very unhappy and many a grand country house, unless the National Trust took them on, were left to deteriorate. So, we have come full circle as it were, with the country in dire need of money once again, punitive taxes are part of the government’s solution.

It is difficult to try and work out how the current government’s policies are going to encourage growth. Friends of ours run a thriving gastro pub in the South East and they employ in total 54 people (all the shifts over 7 days a week). With the rise in national insurance taking place this month, it wipes £100,000 off their bottom line immediately. The thriving business is now far less viable and new ways of operating will need to be found. Otherwise, they will move on and could well move abroad where things are less severe.

There must be thousands of businesses in the same position, and we will find out in the coming months whether the Chancellor has got this right, or will she need to think again? This column has questioned her self-imposed fiscal rules from the start, whilst supporting the need for sound money. Growth needs confidence above anything else and the Labour government policies are causing real problems when it comes to confidence to invest. We must wait and see, but unless things change significantly over the summer, she will need to change course.