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SEERAD fails to show at CAP reform seminar -
allegedly because they still do not know the rules that will apply
James Irvine
Teviot Scientific, Cultybraggan Farm, Comrie,
Perthshire
Filed 09 Feb 05
©www.land-care.org.uk
Kemira GrowHow in conjunction with accountancy
firm Campbell Dallas held a seminar on Common Agricultural Policy
(CAP) reform in Perth on Wednesday 2nd February 2005 - one month
into the new regime of Single Farm Payments (SFP) and when farmers
have to make important business decisions.
But the first announcement from the chair was
to say that, although the Scottish Executive Environment and Rural
Affairs Department (SEERAD) had agreed to provide a speaker, no
such speaker had turned up. The delegates were told that SEERAD's
reason for no-show was that new rules were about to be announced
by the Scottish Executive, and as yet SEERAD did not know what they
were. SEERAD did not wish to confuse or mislead anyone so they preferred
to stay away.
My initial reaction was to reflect on the advice
repeatedly given by SEERAD that farmers should become more efficient
(1). This is not well received when they
themselves, together with their colleagues in London and Brussels,
apparently cannot get their own act together within a realistic
timescale relevant to the highly practical business of farming.
Seasons do not wait for any politician - nor anyone else, including
farmers.
My second reaction was to recall the comment of
a delegate at a previous meeting: "If another salaried guy
gets up and tells farmers to be more efficient I will kick his ****"
(metaphorically of course).
My fourth reaction was to join with many of the
delegates with a loud boo! - aimed at SEERAD, not the organisers
of the seminar who were much appreciated.
Peter Cook, Independent Agricultural Consultant
CAP REFORM: Disaster or Opportunity?
In the absence of SEERAD Peter Cook gallantly
stood in.
In his introduction the chairman informed delegates
that Peter had now left the staff of the Scottish Agricultural College
(SAC) where he was head of the rural business section. He is now
an independent agricultural consultant based in his native Aberdeenshire.
Always good for a splendid joke to start things
off (even if a touch risqué for 10.30 am), Peter gave his
current assessment of farming under CAP reform. As he clearly was
also not privy to the new rules, he stressed that an awful lot of
what is known about agricultural cross compliance was based on someone
in authority making subjective judgements. That would involve a
great deal of trust as to the integrity, knowledge and the judgement
of those in authority.
Although he did not say so, farmers are losing
trust in SEERAD officials rather rapidly in view of their intransigence
and over willingness to penalise. This is especially so when the
information they require is fully available to them through their
own data bases or through those of related government departments,
although not strictly on the piece of paper from the farmer that
they would like by a stipulated date. SEERAD and their colleagues
in DEFRA and the British Cattle Movement Service (BCMS) have lost
masses of trust by insisting on the letter of the law rather than
its principle. BCMS in particular is notorious for making mistakes
and for penalising others who do. So why should we trust them further?
After all, the more money SEERAD can claw back from farmers the
more they will be able to spend on other things - closer to the
political hearts of their bosses - through their "reserve"
funds or whatever.
Peter, although ever good company, was not in
upbeat mode about farming, resorting to comments such as:
"we will have to find a way round it",
"we will have to get cattle to behave like sheep so that
their offspring can go straight off the hill to the finishers
within a matter of months, but unfortunately it takes 2 years
to mature a calf",
"there doesn't seem to be any future for barley".
He thought there might be a migration of livestock
from the more remote highland areas, as there was no longer any
incentive to keep them there. He reckoned that the historic system
of calculating SFP would change to a universal flat rate based on
area sometime after 2008, but I wonder if he is right. There was
no mention of the views expressed by Brian Pack, chief executive
of Aberdeen Northern Marts Ltd, at a meeting of accountants last
September that subsidies related to production may well need to
come back (2). There did not seem to be
much confidence that the supermarkets would get round to paying
a price to UK farmers for their produce that would leave the farmers
with something to live on or even cover their costs - this in spite
of the assertions of Robert Forster of the National Beef Association
(NBA) and John Kinnaird of NFU Scotland that it was incumbent of
the supermarkets to do so.
When Peter Cook was asked if he thought there
was a future for quality Scottish beef he talked of the risk of
the supply falling below a critical mass when the services necessary
to process the product were not economically viable. In one of his
powerpoint slides the word recoupling was used in the context of
just how adamantly the French were opposed to decoupling. This is
no longer a Common Agricultural Policy but a conspicuously Uncommon
one and, in my view, a sure recipe for future strife within the
EU.
Perhaps now that Peter is released from the political
pressures incumbent on being a member of the SAC, he could speak
his mind more freely. His presentation was the better for it. There
was none of the bluster that characterised the SAC Outlook Conference
held some months back (1). Anyway it would not have worked
in the presence on the platform of a firm of accountants who are
well aware of the score for farming in Scotland.
The title of his talk was well chosen: "CAP
reform - Disaster or Opportunity?". From what he said there
appeared to be little in the way of credible opportunity and he
did not pretend otherwise.
Craig Wilson, Risk Management, Clydesdale Bank
The main message here was to consider taking the
Single Farm Payment in euros instead of £sterling. The payment
is calculated in euros. If a farmer opts to be paid in sterling
the conversion is determined on the average exchange rate on a particular
month. If that calculation resulted in a poor exchange rate it could
impact on the value of the payment in sterling very significantly.
He argued that taking the payment in euros gave the farmer more
control as to when to convert it into sterling.
He also talked about converting a bank overdraft
from sterling to euros, when the interest rate would currently drop
by some 2%. Although it sounded all very plausible, there may be
a reluctance among farmers to try and struggle with the intricacies
of money markets when they already have more than enough on their
plates. Money men are notoriously clever people, perhaps just a
bit too clever for the rest of us - but he could have a point.
Andy Ritchie, partner Campbell Dallas, Perth
He had important things to say about the tax implications
of the Single Farm Payment and how these depended on how the farm
was set up: for example as a partnership or as a Company. The accounting
year end could also be important. The message was loud and clear:
speak to your accountant to ensure that the SFP can be utilised
to the maximum.
Comment
The timing of the seminar for the beginning of
February was good and there were useful messages to be gained from
it, but the decision of SEERAD not to keep their commitment - allegedly
because they did not have the necessary information - was lamentable.
In effect Scottish agriculture is a division of
a much bigger organisation, namely Brussels plc. In terms of efficiency
it is abundantly apparent that the board of directors of Brussels
plc are highly inefficient in terms of how they make decisions and
how they communicate these decisions to their various divisions
in the form of Member States. In the real world of business such
a board of directors would have been sacked by the shareholders
long ago, or the firm would have gone under.
Perhaps it was as well that apparently no one
at the seminar was aware - or they did not let on - that the Scottish
Executive had just published its own figures for the financial projections
for Scottish agriculture for 2005. An overall drop in net income
from farming compared to 2004 was forecast at a staggering 47% (Figure
1). CAP reform - a disaster or an opportunity?
Figure 1:
SEERAD's forecast estimate for Net Farm Incomes
for 2004/2005 compared to earlier years
CLICK HERE TO VIEW -
pdf
Put aside the SEERAD bluster to which we have
become so accustomed and just look at what their own figures are
predicting. What chance a thriving Scottish farming industry? Put
these figures into the context of the Scottish Executive's much
heralded "Forward Strategy for Scottish Agriculture"
(3) and see how false it is. It would also
be worth checking how many of those who participated in that glossy
picture document are still farming.
The Scottish Executive should get real, instead
of pandering to what they consider to be a populist lobby for the
environment (promoted through such bodies as Environment LINK (4)
and by the tunnel vision of Scottish Natural Heritage). If there
is not a thriving farming industry the Scottish Executive can say
goodbye to a great deal of quality environment. No amount of short-term
grants or government control through land management contracts will
save it.
This Scottish Executive has a lot to answer for:
loss of Scotland's fishing industry,
loss of Scotland's manufacturing industry and
now the imminent loss of Scotland's farming industry.
Others in Europe flourish while we fail. The Scottish
Executive are lost in a 'green' ideological dream that can only
have negligible impact on their pet obsession, global warming. Don't
they know that it is a competitive world out there, and that they
cannot put it to rights (as they see it) all on their own. They
may be leaders in the subject, but unfortunately they are leading
us down the wrong track.
©www.land-care.org.uk
References
1. Irvine, James (2005). SAC Outlook
Conference, "Benefiting from change" Murrayfield Stadium,
Edinburgh. 16th November 2004
See SOCIAL/ECONOMIC/POLITICAL Homepage, filed Jan 05, www.land-care.org.uk
Click
Here to View
2 Andrews, David (2004). SFP 'famine'
shortages could force subsidies U-turn says Pack.
Scottish Farmer, vol 112, No 5639, Sept 18:p1.
The press release in its original form from ANM Group Ltd may be
read on
http://www.goanm.co.uk/group/pressreleases/group/pressgroupsept04.htm
For further comment on Brian Pack's speech
See SOCIAL/ECONOMIC/POLITICAL Homepage, filed 20 Sep 04,
www.land-care.org.uk Click
Here to View
3. Scottish Executive (2001),
Forward Strategy for Scottish Agriculture. Click
Here to View
4. Irvine, James (2004). Concerns
about the validity of statements on the condition of SSSIs in Scotland
made by members of Environment LINK. Review and comment on a case
study presented by Kirsty Macleod at People TOO conference, Perth.
29th October, 2004.
See SOCIAL/ECONOMIC/POLITICAL Homepage, filed 17 Nov 04,
www.land-care.org.uk Click
Here to View
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