Back to HOMEPAGE Lloyds TSB Farmers' questions and answers
Royal Highland Show
26th June 09
James Irvine
Editor: www.land-care.org.uk
Field 29 Jun 09
©www.land-care.org.uk
The annual event of Farmers' Question Time, organised by Lloyds TSB Scotland, took place in the presence of an invited audience in the impressive Ingliston House at the Royal Highland Show, Edinburgh on Friday 26th June 2009.
The event, which has become a tradition at the Show, is the brain child of Professor Donald MacRae, economist to Lloyds TSB Scotland and who has a seat on the Board of the Scottish division of Lloyds TSB. He is a member of a family that runs a farm in the North East of Scotland, where Donald spends some of his summer holidays driving the combine harvester.
Equally traditional is the composition of the panel charged with answering the Farmers' Questions. The two permanent fixtures, in addition to Donald MacRae as chairman, are Brian Pack and Maitland Mackie. The other two permanent members are the current Minister for Rural Affairs and the Environment (or whatever the current name of the equivalent government department is in fashion at the time) and the President of NFU Scotland. This year, as last, that meant Richard Lochhead and Jim McLaren, respectfully.
Figure 1:
Four of the five members of the panel at Lloyds TSB Farmers' Questions and Answers
at this year's Royal Highland Show at Ingliston.
The name labels are set obliquely opposite the person, with BrIan Pack missing from the picture.
From left to right: Richard Lochhead, Professor Donald MacRae, Jim McLaren and Maitland Mackie
See figure 2 for Brian Pack
To enlarge photo Click Here
(Photo ©Kimpton Graphics)
Brian Pack recently retired from being Chief Executive of ANM Group Ltd. He has been awarded many accolades for his services to the food industry. Maitland Mackie is founder of the successful farming and ice cream business in Aberdeenshire. Known for his ideas, that can vary from the good to the nonsensical, not everyone would agree with the Chairman's introductory remark that "he is becoming the elder statesman of Scotland's farming industry."
The form is that the invited audience are asked if they would like to submit questions in advance of the meeting. Professor MacRae then decides which are selected. Members of the Panel, without prior knowledge of the questions, are asked to respond. Rarely is there much chance for the questioner or anyone else to respond to what the panel opines. It is largely a matter of listening to what "the great and the good" have to say on a range of matters.
While some comments are enlightening, others are tinged with a degree of self-indulgent pontification. Perhaps too often, any attempt at a serious and useful debate is deflected by some interjection of irrelevant humour. May be the meeting is aimed at having an erudite social jolly, rather than making a serious effort to face the major challenges of the day. But perhaps it does give some insight as to how the Minister operates. Who is he listening to? Is he consistent in what he says to different groups at different times? Or does his drift vary according to who happens to be there? He is a politician after all.
For me, and possibly for many others, the purpose in attending is try to work out what the odds might be for a sector of the farming industry, such as hill suckler herds, to be viable or not this winter. Such is the current crazy lack of coherent policies generated between the EC, the EU, Defra and the partially devolved Scottish Government, that essential forward planning within the industry simply cannot be achieved. Planning for the years ahead is key to success or failure. No amount of encouragement to be more efficient can make up for such a fundamental flaw.
Richard Lochhead was introduced by the Chairman has being rated the most popular rural minister among farmers last year in the Lloyds TSB opinion survey. Will Mr Lochhead continue to be held in such high esteem as the reality of his party's policies become apparent? Or will his earlier championing of Scotland's farming industry fall by the wayside, along with so much else (1).
There was a wide range of questions selected this year, each in a different farming category. Then there was a jolly that took up about as much time as the others. But if you are sitting pretty as a key figure in a longstanding successful enterprise, or indeed of a major enterprise that has failed such as Lloyds TSB/HBOS with its massive government bale out, who is bothered too much?
Bankers: are they taking advantage of their clients to restore their own funds?
With the host being a banker, what would the cosy coterie of the panel have to say? Mackie, Pack and the Minister apparently had no problems with the banks. No, the bankers were not ripping off the farmers. They were entitled to earn their crust (some crust!). Their driving force was to look after their shareholders. It was left to Jim McLaren to remind everyone that the shareholders of Scotland's leading banks are the public as taxpayers. That comment went down very well with the assembled farmers.
NFUS had been doing a survey among its members asking for evidence of problems with the banks, such as higher arrangement fees, difficulty in getting credit, etc. Did this lead to Jim McLaren making the interesting suggestion that farmers should organise their own co-operative bank? After all, that is how banks started in the first place. There would be none of this gambling in casino-like fashion with folk's life earnings and sound business management plans. That raised the eyebrows of the banker chairman. Sounds a good idea to me. There will no doubt be plenty redundant bankers to help. We would just want the dull ones who are prepared to handle money in a safe and secure manner: such as only lending what they have in their own kitty, instead of bundling up debts in undefined packages and trading them off without traceability between banks at inflated libor interest rates.
Rural planning
While there was wide agreement that the planning laws, and the administration that goes with them, are burdensome in the extreme, there seems little prospect of much significant change in the foreseeable future. Promises, promises and more promises: as ever.
Wind Farms
The questioner was not happy about the way planning permission was being granted that seriously affected the lives of people living close to them. Sadly she did not get much sympathy from the panel, who seemed to think that the harsh winners and losers principle was fine. That is, if you were a loser that was just too bad. The Minister gave an unconvincing account of how carefully the planners consider such matters.
This gave Maitland Mackie the chance to sound off about the merits of windfarms. How farmers should take ownership from the commercial sharks that want to pay farmers peanuts while they get into the big money. But this was yet another of Maitland Mackie's grand plans that folded. Mackie waxed lyrical about the possibility of storing electricity. Oh yes, and how is that to be? He waxed enthusiastic about how they pay for themselves in such and such a time, with or without subsidy. The trouble is that few may believe him. He may be right, or he may not. It is difficult to know with Maitland Mackie.
The Minister spoke enthusiastically about the crazy targets of the Scottish Parliament where his party, the SNP, runs a minority government. By decree, 40% percent of Scotland's energy has to come from renewables by 2020 and 80% be 2040, along with an emphatic no to the nuclear option. Scotland seems set to ruin its current disastrous economy even more, by having idealistic but grotesque ambitions to lead the world in reducing climate change. Presumably the idea is that this would make such an impression on China, on India and on other major industrial countries that they will follow Scotland's minuscule contribution, while at the same time witnessing Scotland's economic self destruction.
Meanwhile the cost of energy is set to rise as taxes are applied to fund these over ambitious targets. This looks like yet another altruistic SNP policy that will, hopefully sooner rather than later, hit the dust. Word has it that even the Danes have given up on more wind farms, in preference to 'clean' open cast coal mining.
On the rare occasion that the Chair asked for a comment from the audience, he got more than he bargained for. A lady articulated her justifiable fury with vigour and at some length.
Scotland's upland livestock farming
The Chairman announced that he had received a particularly large number of questions on this subject, including one from myself. While I have no idea how the other questions were phrased, it did appear that he may have chosen the most benign. Namely:
" How can Scotland's cattle and sheep industry be stimulated?"
This lead to a somewhat rambling set of responses from the panel. The auctioneer seemed to think things were not too bad because of the high prices currently being achieved (and therefore presumably higher commission receipts). But these higher prices are not matching the higher costs of production, or the acute shortage of skilled labour.
The Minister claimed that he and his team had thought long and hard about the matter, but in fact he had come up with little more than "a sticking plaster" in his recent Statement at Holyrood on the subject (as described by The Scottish Farmer). The Minister had deferred the problem to his friend and mentor Brian Pack to come up with a report by the end of the year. This of course will be too late for many upland livestock farmers. They have to decide whether they can afford to keep their livestock over the coming winter (2).
The question I had submitted was aimed at focusing attention to where it matters. Namely:
"Does the panel think that the recent measures announced by the Minister will make a significant difference to the continuing decline of beef suckler herds in Scotland's uplands? NFUS claimed that, with no top slicing of Article 68 payments, a split in the farming industry has been avoided, but the reality is that a whole section of Scotland's farming industry may be lost. Have the Minister's actions been too little, too late?"
Figure 2:
Brian Pack, the fifth member of the Panel
To enlarge photo Click Here
(Photo ©Kimpton Graphics) I happened to be sitting next to a member of the Minster's team of civil servants. He too stressed that the team had deliberated long and hard over the matter. But such prolonged contemplation apparently did not include consulting with the Scottish Association of Meat Wholesalers (3), the National Sheep Association Scotland, nor National Beef Association Scotland.
Jim McLaren escaped my challenge and woffled a bit about the need to support "active farming". When asked by the Chairman if be meant a return to payments coupled to production, he simply said that he did not like to use such words. I ruefully remember spelling out some years back the consequences of total decoupling if that was how the CAP was to be revised. These consequences have now come to pass with a vengeance. I also recall stressing the need for a beef calf scheme, and the profound opposition I got for my pains. Now there is clamour that it must be retained and increased.
It is sad to see Scotland's iconic beef industry being undermined by cumbersome and misguided bureaucracy, with the malaise spread throughout the EC, the EU, Defra and the Scottish Parliament.
New entrants to farming and the availability (or non-availability) of farm tenancies
Here we were treated to more fancy ideas from Maitland Mackie about older farmers being pensioned off. As the age of most Scottish farmers is fairly advanced, would there be enough new entrants prepared to take their place? NFUS said it was keen on schemes for new entrants. It was also keen on relaxation of the existing highly unsatisfactory farm tenancy legislation, which came about because the NFUS and the landowners could not reach agreement back in 2003. With the result that the then Minister for rural matters, Ross Finnie, produced legislation that was the worst of both worlds.
Richard Lochhead, the current Minister, then piped up with a somewhat remarkable statement, arguing against too much relaxation of government control on farm tenancies. He reminded the gathering "where things had come from". He likened the landowners pre-2003 as being akin to modern supermarkets - a few in control of the many. Was this a revealing sign of a serious chip on the shoulder, integral to an underlying socialist agenda of the SNP? One had hoped that the SNP had left behind that destructive attitude so widely put into practice by their predecessor in government, the Labour/LibDem coalition.
It was left to Brian Pack to make the most sensible comment on the subject. Young people will find tenancies for themselves if they look for them, and that they will not be attracted into the farming unless the industry is seen to be profitable.
Joke
There cannot be a meeting of farmers without a joke. When asked what he would like as a retiring present, Brian Pack replied that he would like a blue movie. He would view it in reverse, so that the woman was seen to give the money back. No wonder he has been such a successful business man.
Perhaps less of a joke was the persistent antics of Maitland Mackie to promote his own company when supposedly giving wise advice to us lesser mortals. Just how did that packet of Mackie's crisps find its way to such prominent display in Figure 1?
Then of course there was the prominent display of the sponsor's slogan, also clearly visible in Figure 1. "We are proud to support you ..whatever your journey" it proclaims. But the fact is that London based Lloyds TSB made a disastrous decision to take over the rapidly collapsing giant Halifax Bank of Scotland (HBOS). Through sheer greed, with the opportunity to bypass the Monopolies Commission, Lloyds TSB failed to competently check the liabilities of HBOS. They ended up by being effectively nationalised. Their current driver is as the first questioner implied. It is to pay off of their main shareholder, the taxpayer, so that they can return to their independent ways (huge salaries and massive bonuses for the top brass) as soon as possible. Unfortunately, it would seem that the taxpayer is the one who is likely to have to pay for this exercise, through higher charges one way or another.
I thought economists with distinguished academic credentials were supposed to recognise that unsustainable bubbles can burst. Their failure to do so has resulted in Scotland losing the core of its previously highly trusted and successful financial sector. Scotland will be one of the countries within Europe worst affected by the current financial crisis. Scotland has to concentrate on getting its economy back in order, and give up on altruistic schemes that will only add to its financial woes.
I wonder if I will be invited back next year. Possibly not.
©www.land-care.org.uk
References
1. Linklater, Magnus (2009). Alex Salmond enters summer recess with rivals still on defensive.
See HOMEPAGE, filed 29 Jun 09, www.land-care.org.uk Click Here to View
2. Irvine, James (2009). Richard Lochhead makes disappointing statement on the future of Scottish farming.
See HOMEPAGE, filed 10 Jun 09, www.land-care.org.uk Click Here to View
3. Irvine, James (2009). "Scotland stays on track for major decline in beef and lamb production" says Allan Jess,
SAMW president
See HOMEPAGE, filed 12 Jun 09, www.land-care.org.uk Click Here to View
Finis
Figure 2:
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