The Lords have published a report on ‘agricultural resilience’. Catherine Paice reports
The 12 peers on the House of Lords energy and environment sub-committee have produced a 70-page report on price volatility and agricultural resilience. With 29 pieces of written evidence in the three-month window for submissions (to February this year), oral evidence from 22 witnesses, and some farm visits, could they come up with any fresh ideas for managing risk?
Committee chair Baroness Scott of Needham Market (Lib Dem), said: “We believe that income support for farmers in the UK and in the wider EU should continue as the conditions for agriculture are more challenging than in many other major producing countries. Nevertheless, public money should not be used to simply prop up inefficient farmers.”
All farmers now have to cope with volatile international markets – and work out what they can manage, in terms of risk, and what needs the help of new frameworks and skills.
One of the report’s first conclusions is that despite increased volatility in agricultural prices, overall price volatility is no higher than at other times: “In our opinion, adverse effects at farm level are caused more by unanticipated periods of sustained low prices than by an increase in levels of price volatility.”
Secondly, it concluded that although lessons could be learnt from the US and Canadian approaches to insurance schemes, these should not replace the provision of direct income support through the CAP – sometimes, and for specific purposes.
The peers are more positive about the elusive development of financial instruments to manage risk (and the report recommends government policy should ensure training for farmers). It seems likely that something will happen, but it could be a year or more before they are of practical assistance, and the report calls for the Government to work more with the private sector in developing tools that could be accessed now under Pillar 2 of the CAP.
financial instruments for farmers and to work more closely with member state governments and agricultural bodies to disseminate their work.
Tenant farmers come in for particular consideration: “We recommend the UK Government encourages tenant farmers seeking to diversify and strengthen their resilience. Government should also investigate the impact of short-term tenancies on the ability of farmers to make necessary investments,” the report says.
It highlights the need for better understanding of the risk management ‘toolkits’ available – through Pillar 2 of the CAP, government intervention, Rural Development Programmes and the European Investment Bank – and for the Government to come off the fence in deciding which to support and promote.