Banks: Current position cannot continue

Blogger Gerald Banks.
Blogger Gerald Banks.

Governments must recognise that for a sustainable agricultural industry across the UK and EU, the current position cannot continue.

Monday, September 7, was a remarkable weather day across most of Scotland. But, rather than rising at the crack of dawn to get into their combine harvesters, eight NFU Scotland Directors and three members of staff boarded flights to London to meet Westminster MPs on their first day back in parliament after the long summer recess.

It was no mistake that Monday was also the day of the COPA-led farmer demonstrations, where 6,000 farmers and 2,000 tractors took to the streets of Brussels whilst an extraordinary Agriculture Council meeting took place. Whilst the NFUS Presidential team met the UK’s agricultural ministers in the EU corridors of power, over the course of the day the NFUS delegation at Westminster met with over a quarter of Scotland’s 59 MPs, as well as the Secretary of State for Scotland, David Mundell MP.

The message was that, despite the headlines putting a lot of emphasis on the current problems in the dairy industry, there is in fact no sector of Scottish and UK agriculture that has been left untouched by the ‘perfect storm’ of a global market downturn, poor summer growing season and an uncertain future of support due to CAP reform. These issues have been compounded by a dysfunctional supply chain that allows large retailers to squeeze primary producers, and ultimately hinder the long-term viability of Scottish and British farms to produce food.

However, these meetings weren’t just about communicating the problems our industry is currently facing. The focus must also be on providing solutions, so we can achieve the bright future for Scottish agriculture that NFU Scotland and its members strive for every day.

Support – Politicians must support farmers through the implementation of realistic policies that do not over-burden food producers with unnecessary regulation. The Scottish Government should also do everything within its power to deliver 100 per cent direct payments into bank accounts by December. Similarly, UK ministers must recognise the diverse systems of CAP implementation amongst the four parts of the UK and ensure that any administrative controls set by Europe fit the unique circumstances of the devolved nations. Fundamentally, this support is essential for the survival of many farming businesses as well as all of the upstream and downstream rural businesses and services they employ.

During our meetings on Monday, NFUS also received confirmation that our Secretary of State for Scotland will facilitate a meeting with Farming Minister George Eustice to begin talks on a review of the budget allocation of Pillar 1 support across the devolved administrations, to address the so-called convergence dividend issue.

Transparency – The UK Government’s Groceries Supply Chain Code of Practice has the potential to promote transparency and fairness throughout the supply chain, but it has not been effective to date. Relations are still breaking down from farm to fork, and without significant strengthening of the Groceries Code Adjudicator’s powers to give her real ‘bite’, retailers will continue to take advantage of price swings through cynical and unclear pricing policies.

At our meetings on Monday, we encouraged MPs to speak with retailers as well as the Groceries Code Adjudicator in order to collate a positive case for the UK Government to implement policies that will promote transparency throughout the supply chain.

Promotion – Scottish and UK farmers are proud to produce a fantastic premium product, but there are huge issues when selling this produce in a commodity market. The Scottish and UK rhetoric on exports, branding and growth has not matched up with the level of promotion funds going to the UK, and this needs to change.

UK Government should draw down EU promotion funds in order to meet this end, as well as engaging and integrating UK Trade and Investment with the Scottish trade promotion bodies, in order to open and promote Scottish produce in new and emerging export markets.

Intervention – Where there is little sign of recovery in commodity markets, particularly in the dairy market currently, pressure should be put on the European Commission to review intervention price floors. This is expected to be (at worst) a cost-neutral move and it could be pre-financed from the EU budget using existing super-levy funding.

There will be no silver bullet that will solve this crisis overnight, but our message to politicians at Scottish, UK and EU level is that collaboration is key. They must work together and they must work with us. Now is the time for governments to realise that a fundamental shift is required in order to secure the future of our industry, and food security.