Farmers and rural landowners must get ’match-fit’ to face the pressures of economics, climate change, retail, and Brexit, a Government trade adviser and former director of Waitrose told farmers.
“Everything we know is about to change – there is no time to lose to prepare to be match-fit in a new global game,” Lord Price told 500 landowners and farmers at the CLA’s rural business conference.
“I would suggest you will face more competition, lower [farmgate] prices and lower subsidies,” he said.
Lord Price laid out four emerging factors that would force change.
“The country and treasury is not flush with cash - you might want to factor that in,” he said.
National debt was now 85 per cent of GDP (35 per cent before the 2008 financial crisis) and whoever won the General Election would increase the deficit.
In the context of public concern over public service underfunding, immigration and a widening gap between rich and poor, how much money land would get was open to question.
Lord Price predicted retailers would start to introduce carbon footprint labelling and Government might then see this as an opportunity to introduce taxes on certain foods, such as red meat. However, he said carbon capture and demand for green brands offered opportunities.
The most likely Brexit outcomes would result in the UK not applying tariffs to imports, to keep the country fed and food prices down.
“Your competition will no longer be the farmer next door, it will be farmers in Mexico, the US [and elsewhere],” said Lord Price.
“In the future the UK will have truly global competition - and of course global opportunity.”
Impact of a changing farm support mechanisms
The UK was ’at the foothills’ of what could happen with online shopping, said Lord Price.
But margins in online food shopping were smaller, so this could put downward pressure on farm gate prices, he said.
Sir Peter Kendall, AHDB chairman, said: "[Lord Price] was clear – and he is someone who has been at the heart of retail and trade – we are now entering a global marketplace and his prediction is we will face lower prices and less support.
“We have been spoilt by a large domestic market – we have to develop a mindset seen in large exporting countries, like the Netherlands.
“We need to come together as an industry with collective ambition. We need to accept the challenges, acknowledge that our production is low, and start measuring and benchmarking.
Mr Kendall said Government support to encourage benchmarking and push exports was essential, pointing to the Dutch having a dozen trade mission staff in Beijing and the UK having only one.
“We are at a tipping point,” said Mr Kendall.
“If we are going to be a global player, we will need be very different.”
CLA president Mark Bridgeman urged members to embrace change and said success now did ’not guarantee success in the future.’
Farmers think green economy holds biggest economic opportunity
A POLL of 500 farmers and landowners has found more than 50 per cent think carbon trading and environmental goods hold the biggest opportunity for the rural economy.
About a quarter thought UK tourism offered the biggest opportunity, with around 10 per cent saying renewable energy was the sector to invest in.
The poll was conducted live at the CLA rural business conference in Westminster.
Speaking there, Lord Price, former trade adviser and managing director of Waitrose, said carbon capture would offer a ’huge opportunity’, while Lady Sondes of the Lees Court Estate, said bio-plastics made from UK grown corn and potatoes was a big untapped market for British growers.
“Success today is no guarantee of success tomorrow,” said Mark Bridgeman, CLA president. “We must embrace innovation and change.”
The conference heard from businesses doing things differently, including a company manufacturing fertiliser by capturing waste carbon, and an estate producing alternative non-food crops for industries such as pharmaceuticals.