Farming Today

[marshlander]

Farming today this morning (bbc) had items about the consequences of the high cost of grain/fuel.

One organic dairy farmer said shortages of organic milk/milk products are predicted this winter even though there's been a downturn of 8% in organic purchases. He said some farms are returning to non organic as the premium for organic grain is now 90% - when he converted to organic in 2000 it was 20%.

Another farmer said he wasn't going to grow anything next next year even with wheat at £110 per tonne as fuel and labour were costing him more! He will still get a payment for leaving his fields empty.

How are we going to return to local food when our farmers say they can't afford to grow it?

[Ratty]

I just can't get my head around farmers being paid for fields laying fallow. Just got my fortnightly organic veg box and its going up by 50p, which is fair enough given all the fuel price hikes.

[Rod in Japan]

How are we going to return to local food when our farmers say they can't afford to grow it?

1. Grow it ourselves.
2. Get to know our local farmers and offer them more for their produce than they ask.

Farmers really need to be cut loose from the government teat so that they learn to profit again like normal business people.

[ina]

They can't just do nothing with their fields and get paid for it; either it's set-aside, which is restricted to a certain percentage of their land (although with the current shortage of just about everything, I don't know how far that's still relevant), or they have to show that they are applying "proper farming practice" to get any payments.

[DominicJ]

Most of our (Europes) Farms are much much to small to be profitable, without government subsidy and a captive market most would go under. No bad thing, it would force the industry to modernise, but the Government wont allow that, not here, and certainly not in france.
Dafyd Jones and his 25 acres of sheep simply cant compete with Consolidiated Kiwi Farming Corporation and its 25,000 acres.

[The Riff-Raff Element]

It is an interesting little conundrum isn’t it?

Large scale mechanised farming produced cheap food not because it was an inherently efficient way of using land per se but because the high cost inputs (labour) could be minimised in return for maximising the low cost inputs: fuel, agrochemicals and borrowed capital.

Now the paradigm has shifted. Oil is expensive (even if everyone is getting excited about the price having dropped below $120 per bbl), so are agrochemicals and credit is no longer cheap or easy.

The world changes, old dogmas fall by the wayside and farming will have to adapt. I suspect the ideal “shape” for farms in the next few years is going to be not dissimilar to that between the wars: couple of hundred acres, mixed agriculture, family run, with minimum inputs and not too far from its markets. Anything too big, too energy intensive will simply perish.

[Rod in Japan]

On the contrary DomJ, small diversified farms are inherently more profitable. However, the farmer is required to have strong marketing skills.

[Mrs Moustoir]

I agree Rodinjapan - especially if those smaller farms join together in co-operatives as they do here. Sharing skills and negotiating with suppliers as a bigger unit.

[DominicJ]

Rod in Japan, the facts would seem to disagree with you, since small farms are only profitable with mass subsidy, even with them, most of our farms are on the border line of profitability, unless they can create a niche product.
Selling Wasdale Fell lamb is inherintly more profitable than selling Lamb, but the marklet is much smaller.
Selling Supercars is much more profitable than selling supermini's, but Noble arent going to be replacing Toyota anytime soon.

Mrs M, you mean like if they acted like a big farm? :p

Its just numbers. A big farm can buy a machine for a specific task because it can run that machine 24/7.
A small farm cant, it has to use small less efficient equipment, that isnt specialised. A big farm can afford 10 different tractors for 10 different tasks, a small farm can only afford the one, and has to use it for tasks that it is capable of doing, but not as well as the specialist, even then, its likely to have down time when it isnt doing anything.

[ina]

Dominic, we are not talking about financial profitability here. From what I hear out of the research quarter, small farms can produce a lot more per area unit. It may, at the current cost of the various types of input, not be viable - but terms are changing...

[Rod in Japan]

Rod in Japan, the facts would seem to disagree with you, since small farms are only profitable with mass subsidy, even with them, most of our farms are on the border line of profitability, unless they can create a niche product.

Nothing is profitable with a subsidy. That's a contradiction in terms. Nevertheless, there are small farms in all the developed countries that reject the govt. teat and still turn a decent profit.

Selling Wasdale Fell lamb is inherintly more profitable than selling Lamb, but the marklet is much smaller.

That doesn't matter. If the Wasdale Fell Lamb is profitable, it turns a profit, and doesn't require a subsidy. The market for translation that I can reach on my own is tiny, but because my overheads are zero, I get to keep more of my profit than big translation agencies.

Selling Supercars is much more profitable than selling supermini's, but Noble arent going to be replacing Toyota anytime soon.

It doesn't matter. You just prove that small is more profitable than big. How many people at Noble (never heard of them, but whatever) are dying of overwork? It's endemic at Toyota...

Mrs M, you mean like if they acted like a big farm? :p

No, you missed the point again. They act like a big farm to their upstream, while acting like a small farm to their downstream. The difference is crucial. They set their own downstream prices, while forcing the upstream to accept their price too. The big farmers you're talking about can't do either.

Its just numbers. A big farm can buy a machine for a specific task because it can run that machine 24/7.

The big farm is in debt. It can't function at all without the machine, and is thereby unable to respond nimbly in the marketplace. Farming is not an industry. Just as some translators foolishly give bulk discounts, some farmers foolishly buy industrial equipment. Might as well buy a drill for your foot.

A big farm can afford 10 different tractors for 10 different tasks, a small farm can only afford the one, and has to use it for tasks that it is capable of doing, but not as well as the specialist, even then, its likely to have down time when it isnt doing anything.

The tractor factor is no doubt important for farmers, but if the big farmer has ceded all his marketing to the supermarkets and food processors and thereby lost control of his pricing, the only difference it will make is to the size of debt.

The facts show that small, diverse farms employ more people, more enjoyably, without going into debt. The big farms are a temporary anomaly.

[The Riff-Raff Element]

Its just numbers. A big farm can buy a machine for a specific task because it can run that machine 24/7.

A small farm cant, it has to use small less efficient equipment, that isnt specialised. A big farm can afford 10 different tractors for 10 different tasks, a small farm can only afford the one, and has to use it for tasks that it is capable of doing, but not as well as the specialist, even then, its likely to have down time when it isnt doing anything.

As far as primary function goes, a tractor is a tractor is a tractor. It is the things that it tows that change the function and there is far a greater range of these at the small end of the scale than for the big boys, simply because small tractors are used in more niches.

Small tractors are cheap to buy and cheap to fuel. Big tractors will do the same job in half the time but cost considerably more to buy (some of the John Derre monsters used for maize farming here cost over €100k, but a Kubota compact can be had for €10k) and use much more than twice the fuel. Which, like I said, is fine if labour is expensive but fuel and cost of capital are cheap. Turn it around and the Kubota suddenly looks like a smarter deal. It is just a numbers game, after all.

And it's not just about money: farming is also about security. The utter fallacy that globalising agriculture was good because it was cheap was amply demonstrated when the US decided to turn its “surplus” corn into gasoline substitute. Normally this would be exported at dumping prices to Mexico (and others), and the Mexicans – in the spirit of the Market – had stopped growing this staple and replaced it with cut flowers and avocado pears for the rich gringos to the North.

Net result: food riots in Mexico. Ridiculous.

Agricultural policy must be regional. It is foolhardy in the extreme to base food supply on external inputs that are not in ones control. So, in the case of Europe, don’t buy soya from the Argentine, don’t buy maize from the US and minimise the amount of oil used in farming. The only things that we should be importing from other regions are the small-volume exotics that we can do without at a pinch. Common sense, really.

And if that means the farming in Europe requires subsidy then so be it. Self-sufficiency in staple foodstuffs is a hedge against insecurity elsewhere. And hedges are never free.

[contadino]

I think you're talking at cross purposes. It's not the size of a farm that makes it financially viable (or not), it's the level of diversity. Monocultural farms are less able to take a financial hit when something goes wrong (be it a disease, a market fluctuation, or volatility in the price of an input.) Highly diverse, debt-free farms are better able to ride the waves.

Subsidies are a great way to lower the entry level into farming (I wouldn't have been able to switch to being an olive farmer without mine), but for larger concerns they're just another way of shifting tax into company coffers.

[contadino]

As far as primary function goes, a tractor is a tractor is a tractor. It is the things that it tows that change the function and there is far a greater range of these at the small end of the scale than for the big boys, simply because small tractors are used in more niches.

No, you're way off the mark there. Tractors are just like any other product - they're designed for specific jobs. Nobody in their right mind would get narrow 10hp tractor, designed for working between rows of vines, and use it for working a 50ha field of wheat. Nobody would get a 200hp tractor on elevation tyres and work a 1 in 5 hill.

[The Riff-Raff Element]

As far as primary function goes, a tractor is a tractor is a tractor. It is the things that it tows that change the function and there is far a greater range of these at the small end of the scale than for the big boys, simply because small tractors are used in more niches.

No, you're way off the mark there. Tractors are just like any other product - they're designed for specific jobs. Nobody in their right mind would get narrow 10hp tractor, designed for working between rows of vines, and use it for working a 50ha field of wheat. Nobody would get a 200hp tractor on elevation tyres and work a 1 in 5 hill.

They are, however, the same in that they all pull things. And ignoring the extremes you cite - valid as they are, I agree - a 45hp tractor can do practically any job that a 200hp can. It would do it more slowly, doubtless, but do it, it would.