“We must act within two years to save family farms” 

The stark comments were made as cross-party MPs questioned Baroness Batters on her recent Farming Profitability Review, published just before Christmas.

Her report made 57 recommendations to government, including changes to planning laws; greater access to private finance; and improving supply chain fairness with food retailers.

During the evidence session, the former NFU president stressed the need for farmers and civil servants to work together on developing a long-term strategic plan – rather than the continual “writing of press releases”.

She noted that the average 140ha farm would need a profitability margin of £34,500 to be on a par with median household earnings. Currently, industry analysis shows over 50% of farms fall below this. 

She quoted stark figures that of the top performing farms, only 8% are profitable for five years in a row. 

“From my point of view, there is enormous nervousness that mid-performing farming businesses are fragile right now.” She believes we have two years to save the family farming structure we have in this country.  

“All I am saying is: this is a moment. If we don’t change, in two years’ time you will start to see a very different farming sector. Do we want large-scale monoculture farming operations? Who wants that? If you want it, yes, you are on a road to getting that. If you don’t want it, you need to change and to put these recommendations in place.”

‘Only’ 0.6% of GDP

The Treasury’s perception that agriculture is ‘only worth 0.6% of GDP’ is a particularly damaging and misleading one, Batters told the committee – and she wants to re-establish its true value.

This 0.6% does not factor in the raw ingredients grown here, the machinery dealerships, farm vets, agronomists, schools and pubs in rural areas – not to mention road cleaning in winter and putting out wildfires in summer.  

During the six months she had to work on her report, she hoped to come up with a figure, but was unable to. “That is extraordinary in itself – that we do not know the value of all the businesses that are here and that are involved with the raw ingredients. 

“Other countries could tell you that. New Zealand could tell you that. Ireland could tell you that. We can’t, and that shows you why we need to do it.”

Her first ask of Defra is to recalculate the figure with the ONS – and she believes they will come up with a very different figure – one that will make the Treasury view agriculture as an exciting sector.

Undermining our own producers 

The lack of connection between government departments, such as Defra and the Department for Business and Trade, was noted during the evidence session.  

Batters noted in particular the animal welfare regulations brought in during the last parliament – requiring lower stocking densities and slower growing birds. 

“I’m appalled at the situation we’re in. It’s not rocket science that if you lower stocking densities, and you want a slower growing bird to deliver animal welfare, you need a larger building.”

She said producers have been undermined at a time when there is growing demand for affordable proteins. 

“We are now importing more poultry meat off the back of this legislation and regulation. It can be solved immediately with a planning framework that will allow permitted development rights to increase building size by 1,000 square meters.

“That could be done tomorrow, and should have been done in the first instance in the last parliament when the legislation went through. Not only are we penalising our own farmers, we are not doing justice to animal welfare and environmental protection.”

A key issue is that Defra is responsible for process, and the MHCLG (Ministry of Housing, Communities and Local Government) is responsible for leadership, and none of it is joined up, she shared. “It’s appalling how much it is holding us back, disadvantaging consumers and sucking in more imports.” 

However, Defra appears to be on the trail of addressing this, she said.

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SFI closure

MPs quizzed the former NFU president on her views about the sudden closure of the SFI last year – which she believes was “set up to fail”. 

“If you have a scheme that is open-ended and demand-led you have no idea what demand will be, so you have no idea of the value that will be demanded. So I can understand why the Treasury would be frustrated by that.”

However, she said the SFI can be a good scheme, and as it is the scheme, we need to make it work – but funding is lacking. To meet environmental targets, a budget of £4bn would be required, which is unlikely to happen. 

In her review, Batters was not able to comment on the accessibility of some schemes, such as Landscape Recovery, to smaller farms. But during the evidence session, she shared: “The larger you are, the bigger a recipient you will be. In my opinion, that is wrong.”

She recommends landscape recovery across the whole of England, to avoid what she describes as “diamonds in paper crowns”. 

Another challenge is around decision making, with large landowners such as the National Trust pulling down huge sums of public money, but those decisions are being made by the landowner, not the tenant. This is something she believes needs to change.

“Landscape recovery is great, but let us have landscape recovery for all of England, not some of it,” she added.

Milk prices

Rapidly falling milk prices in recent months prompted a discussion on how market volatility could be addressed.

Batters stressed the importance of market monitoring, adding that we must manage supply and demand much better, and invest in drying facilities to produce dried milk – or we will continue to face these issues.

“[Defra] does not have the budget to deal with a market failure situation,” she said. “[…] We do not have a plan for how we manage risk in a market failure situation or in a disease situation, and we should have. 

“One of the challenges of saying that we are going to follow the environmental route alone and allow the market to provide in the food-producing area is that it does not allow you to do that. That is why there is a need to bring food into all of this.”

Focus on food production

MPs questioned Batters on her decision not to include diversification in her report, which she says she stands by – as diversification is not for every farm, and she wanted to focus on food production. 

“I did not want my recommendations to say: ‘Farming is not looking profitable in some areas, so they should look at diversification’. I think that is wrong. I think we want to be able to expect that farmers can earn a living and enough money to reinvest in a business.”

She says it’s essential to bring food production into the scope of the SFI, rather than focusing only on environmental goods – it’s not a case of either/or. 

“We know there is a demand for more plant-based proteins. The Food Foundation is talking about more peas and beans. Well, that should be part of the SFI.”

The government is set to reply to the Farm Profitability Review in full later in the year. 

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