Skip to main content

Sustainable Farming Scheme -- the wrong target!

Policymakers have busy days, where consultations of those affected by a change in policy are given a short time to make their case as to why a specific policy change is a good or a bad idea. Good or bad policy, they receive the same treatment, policymakers will receive virtually the same public outcry -- because in parliamentary hearings, you only hear from those who complain, who will be negatively affected by a change in policy.

I've mentioned that in farming there are several factors; first, you have to find a market where demand will justify the effort, for most farmers, the demand segment has been taken care of by forces outside the farming community (aka wholesalers and supermarkets). In turn, the wholesalers (which represent the bulk of the demand for farmer's products) see how the market evolves.  Changes take multiple years, just look at the shift in the type of potatoes consumed in the UK, what was favoured in 1970 hardly exists now, and I cannot think of a more "staple" vegetable.  In the 1990, it was all about lean meats, so the cattle had to go to slaughter earlier and be very lean (the two are not mutually exclusive), and for the past decade, there has been a shift back to meat with higher fat content.  All these changes in demand were accommodated by farmers, but it took years.  None of these changes were driven by the farmers, it was demand-driven.

The Welsh government,  has decided to introduce SFS (Sustainable Farming Scheme) the laudable idea is that farmers would be rewarded for planting somehow "sustainable" crops.  You know what is a sustainable crop for a farmer:  A crop he can sell! That's it.

Unless the Welsh government decides to act as a 100% intermediary and buys the entire crop, farmers will resist.  Introducing new varieties of crops is complicated, we should know, we do it all the time, you would think we would be pro SFS, but we work in a subset of the industrial farming sector.  Our market is very different than what the average farmer faces because we sell to restaurants and hotels who understand the pitfalls and benefits of new varieties (e.g. our new very fragile grape tomatoes).

Moreover, it takes a huge amount of planning.   Soil has to be optimized for every crop, and the shift from one type of vegetable also means that soil composition has to be altered, I'm exaggerating a little bit.  Farmers will decide two or three years ahead how and if they want to modify crops.  Our farm is planting wheat this year, but we are only doing this because we have spare land, that has, by coincidence, the right soil composition, and the futures prices were three times what they were two years ago.  We locked in 100% of our costs and 50% of our projected profits. For the crop, we will plant in a few weeks.  This is incredibly unusual.  This is not planning.  

Planning is what our biologist and ecologist do, where they will do a soil analysis, add different levels of soil nutrients, grow the test plant, and measure the soil depletion at the end of the season.  That alone takes at least a growing season -- which is another issue, our biologist will also test and verify how the new variety deals with pests.  All these thing occur before we plant "industrial sized" quantities, we will also test with our consumers (restaurants) new variety and see what kind of demand we have.  

This is why what the Welsh are considering is idiotic, they are targeting the wrong group.  if you want farmers to change their crops you have to convince their consumers, anything else will lead to the bankruptcy of these local farmers, and increased imports of foodstuff that consumers want to buy.

I mean it sounds obvious, no?

Note:  My point is that farmers' planting decisions will be based on what the market wants because its the market that buys their products.  if they produce goods that the market doesn't want they they will go bust. No government stick or carrot can change that


Comments

Popular posts from this blog

what people get wrong about tariffs

 The issue is simple. What percentage of the economy is dependent on tariff goods? The truth, is that the US economy is far more closed than people understand. People genuinely believe that all manufacturing has ceased to exist in the United States all given to China on the altar of woke policy the truth can be further from That statement. Only about 15% of US GDP is related to foreign trade. Of that amount, slightly more than half is from Canada in Mexico. And half of that is energy. What that means, is that about 7% of US GDP is tariff dependent. The proof in the pudding, is how little money tariff generates. People think that 30 or 50 billion is a lot it’s not in an economy that has $3 trillion. The impact on the US economy will be less visible but not absent. Inflation hasn’t occurred yet first because tests have hardly started to bite, but more importantly it’s such a small percent of the economy. Now certain things are critical. The rare earth metals from China were critical....

The end of Tesla?

 it takes a special kind of idiot, to think that he can antagonize his entire customer base, and think that it will not impact his business. When Elon Musk went to work for Donald Trump, and created the doge department, he antagonized every liberal, and these people represent 90% of his client base.That’s not a brilliant move. Now Elon Musk is worth hundreds of billions of dollar, so he shouldn’t care a great deal, however, he needs to care because of several other issues. The cyber truck has been a disaster, most have had to be recalled because of defective glue, it’s not a truck, it’s not a car, it’s noisy, relatively uncomfortable, but great as a development platform. What Tesla has learned in making car manufacturing more seamless is truly amazing. The problem was that Elon Musk was so pissed with the Democrats, and with Joe Biden, in particular because of some slight, which were just plain stupid too. By the way, that he decided to support with hundreds of millions of dollar, ...

Demographics

 I am preparing a kind of family tree for our children so that they know where they came from.  In my family I am the only survivor, although my brother and sister died recently they were both in their seventies (a story I told already).    It was a fun process, but it provided more than that.  First, I married relatively young I was 26 when I married and nearly 30 when our first child was born.   I was looking at my ancestors.  On my mother's side, she had 6 siblings, Four died before the age of 30, two in war, and two from illnesses.  Only she and a single sister survived.   The two boys had a child each but they died in WWII, and the other sister died as an infant.   what is interesting is that every one of my mother's siblings had children in their early 20s.   I know that my mom was hardly 20 when my brother was born.    What is remarkable is that among our friends, we are the only ones to have fou...