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Peter Cook discusses the economic realities facing
suckler herd farmers in Scotland
James Irvine
Teviot Scientific, Cultybraggan Farm, Comrie,
Perthshire
Filed 03 June 05
©www.land-care.org.uk
Following the depressing annual
general meeting of the NBA Scottish Council (1),
Peter Cook outlined the new economics of keeping suckler cows on
a Scottish farm following the reform of the Common Agricultural
Policy (CAP). Peter recently resigned from his post as senior economist
with the troubled SAC, to operate as an independent consultant.
For Scotland CAP reform means almost
total decoupling of farm subsidy from production. Suckler cows are
central to beef production as these are the cows that produce the
calves that produce quality beef. Scotland has long had an international
reputation for the quality of its livestock breeding, and consequently
for the quality of its beef. Not only has this reputation been based
on good breeding, but also on good stockmanship in all its aspects.
This is now clearly under serious threat.
Figure 1:
Suckler cow and its newborn calf at
Cultybraggan Farm
(To enlarge Click Here)
photo©Kimpton Graphics
It takes two years from the birth
of a calf for it to be finished for the food chain. To produce calves,
a herd of suckler cows has to be maintained and serviced, and that
includes through the Scottish winters. Traditionally, and for good
reason, there are specialist suckler herd farmers who raise calves
until they are weaned from their mothers at about 6 months old or
are kept until they are about a year old. They are then sold on
to a finisher who, depending on the time of year, may have less
expensive feed available, cheaper housing facilities and abundant
straw for winter bedding.
At the quality end of the market
the production of suckler calves is indeed a specialist job, and
so is the finishing of mature cattle for the food chain. The price
the suckler calf producer gets is dependent on what the finisher
gets for his product. With the removal of subsidy payments on the
cow and on the male calves produced, the live weight price for finished
heifers and bullocks would need to be between 250 - 300 pence/Kg
for the enterprise to be profitable. The likelihood of that being
achieved is looking remote. This is on account of the increasing
availability of imports from outwith the EU where labour, veterinary
services and products such as vaccines are all much cheaper. It
is also the generally held view that in these countries the standards
of animal welfare and of environmental regulation are more lax than
in the UK and therefore incur less expense.
Try as he could there was no way that Peter could
make the production of suckler calves a profitable enterprise without
taking a big chunk out of the Single Farm Payment (SFP) that has
replaced CAP subsidy linked to production. But the SFP is scheduled
to be reduced year on year until within a few years it may be gone
altogether. In addition the farm costs involved in meeting the additional
environmental conditions that go with the SFP will also erode this
resource. The 17 items offered by SEERAD in the Land Management
Contracts under tier 2 of CAP reform are of little help to the suckler
calf producer, being predominantly directed towards improving "the
environment" and only a doubtful token supposedly to help improve
animal health and welfare.
Since it does take 2 years to raise a calf from
birth to finish, it is clearly necessary to plan ahead as soon as
possible to take account of the new economic realities.
Peter also posed the question as to what an independent
businessman would think if he took a look at the cattle enterprises
on Scottish farms. He would be perplexed by the high capital investment,
the high labour costs, and the difficulty in identifying high value
markets. His assessment would be that the returns achieved were
absurdly little in comparisonn to the outlay.
Figure 2:
Peter Cook
Independent agricultural economist
leading the discussion following the NBA Scottish Council agm in
Fife
(To enlarge Click Here)
photo©Kimpton Graphics
According to Peter one way forward
was to "redesign the suckler cow". In so doing he highlighted
its present inefficiencies from an economist's point of view, and
how he would like science to produce a better model - as though
it were a form of locomotive. But of course, although theoretically
possible in the long term to alter the breeding this is an immensely
complicated project, especially if the eating quality of the end
product is to be preserved, if not improved. The problem here is
that such bodies as the Meat and Livestock Commission (MLC), Quality
Meat Scotland (QMS), SAC and the breed societies have been dabbling
with this subject for many a year and have failed to come up with
any clear answers that are likely to be effective.
In reality there would appear to be but three
options:
- cattle enterprises should get larger and be
optimally sited for maximum efficiency,
- smaller cattle enterprises should abandon the
struggle,
- keep going if that is what the farmer wanst
to do, and can afford to do on income from his own pocket or from
some other aspect of his company's business.
But is this really what Scotland as a country
should want? Do we really want large cattle enterprises with the
loss of the smaller family farms, remembering that they are at present
among the most efficient in Europe? What would this do to "the
natural heritage" of Scotland? Would "good agricultural
practice" as stipulated by the bureaucrats really make up for
the care of the countryside that Scotland's farmers have achieved
over generations? And where is the staff going to come from to man
these big units, when those coming out of farming are likely to
seek better paid and less arduous work elsewhere? Would Scottish
Natural Heritage (SNH) even care, or indeed even have the knowledge
to know that they should care? In their view cattle are just a secondary
environmental tool to improve "biodiversity", while in
practice it would appear that SNH have little idea how to look after
such livestock (2).
My view is that much of these troubles have been
unnecessarily created by our own governments - both at Westminster
and at Holyrood - with their "green" agendas, which have
become so over-emphasised ("doubly green") as to be counter
to their own aims. Factions within the farming community itself,
such as the Soil Association and other so-called "organic"
organisations, have also contributed to this lamentable situation.
Using the technique of inference, the "organic" movement
(which has little if any science to support it) has unjustifiably
endeavoured to give conventional Scottish farming (which is based
on science) a bad name as being environmentally harmful.
It takes many years to build up a quality suckler
herd. It takes no time to disband it - along with the many advantages
that go with it. Such losses could have major damaging effects on
how Scotland's landscape is managed and how it is appreciated by
those who visit it.
With the Land Reform (Scotland) Act and its associated
Access Code, Agricultural Holdings (Scotland) Act and now the decoupled
Single Farm Payment with cross compliance regulations, Government
has essentially nationalised farms leaving the farmer with little
but the title deeds. Why should he continue to work any more than
the 36 hour week (and all the perks) enjoyed by the multitude of
bureaucrats that control him? That is emphatically not the way Scotland's
countryside - and the landscape that goes with it - has been managed
successfully in the past, and is very unlikely to be a successful
recipe for the future.
©www.land-care.org.uk
References
1. Editorial (2005). The National
Beef Association under threat through personality conflicts within
its own office bearers and with the breed society secretaries.
To be published shortly
2. Editorial (2004). The management
of the SNH suckler herd of Highland cows on the Isle of Rum.
See SOCIAL/ECONOMIC/POLITICAL Homepage, filed 30 Aug 04,
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