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UK government pays farmers to stop farming

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There is not a day that goes by lately, where we are not being warned of a coming large-scale global food shortage crisis, and of the state of farming industries across the world. It would seem, though that the government of the United Kingdom has different ideas about dealing with the impending crisis as it launches a ‘lump sum payment’ scheme for farmers to exit the industry.

As published on the GOV.UK website on 8 February 2022, a Lump Sum Exit Scheme has been introduced, which allows farmers to apply for a one-off taxable payment for choosing to leave or retire from farming.

According to the governments’ Future Farming blog it ran a consultation last year with farmers and experts, where it was determined that the scheme would help to support farmers finding it difficult to retire or leave the industry due to lack of capital. On its blog it states ‘We’re designing the Lump Sum Exit Scheme to enable those who wish to retire or leave the industry to do so in a planned way. By freeing up land, the scheme will also open up opportunities for new entrants and farmers wishing to expand their businesses.’ 

It is expected that farmers, based on a set of eligibility criteria, will be able to apply for the payment from April 2022 until the end of September 2022. The scheme is not expected to open for applications in future years.

The payment will be made once the farmer has met the scheme rules, including transferring out their agricultural land (with some exceptions) with lump sum payments set to begin to be made from November 2022. Farmers who apply for and receive the lump sum payment will be required to transfer out of their land through sale, or surrender farming rights and plant the land with trees under a Woodland Creation Scheme.

While the scheme may be seen as a lifeline to some farmers who can no longer viably conduct farming activities under the impacts of the pandemic and ever-increasing prices of fertilizer, fuel, and stock feed, it does little to help smaller farming businesses wanting to survive in the industry.

In a report by UK news, The New Statesman it believes that the UK is sleepwalking into a food crisis as the industry is still reeling from the impacts of the pandemic, which has led to vast labour shortages, and industry-specific crises. The news outlet further reported that due to industry impacts, food has been left to rot in fields and a huge backlog of livestock, particularly pigs, have had to be slaughtered. Farmers are having to think twice about what they produce.

According to a report on 29 March 2022 by the Environment, Food and Rural Affairs Committee, ‘The food and farming sector is a key part of the UK economy. It’s the largest manufacturing sector, and contributed some £127 billion, which is 6.7% of national Gross Value Added (GVA). During 2021, the sector faced a number of unprecedented challenges as it adapted to the circumstances created by the covid-19 pandemic, the imposition of checks and controls on exports from Great Britain to the European Union, and challenging issues around cost and timeliness, for example in relation to energy, fertilisers, carbon dioxide availability, packaging and shipping. However, the single biggest factor affecting the sector has been labour shortages.’

The report indicates that the Committee found clear evidence that labour shortages affected the food and farming industry – threatening food security, the welfare of animals and the mental health of those working in the sector, with the number of vacancies in August 2021 estimated to be 500,000 out of 4.1 million roles in the sector.It went on to note, ‘The food sector is the UK’s largest manufacturing sector but faces permanent shrinkage if a failure to address its acute labour shortages leads to wage rises, price increases, reduced competitiveness and, ultimately, food production being exported abroad and increased imports.’

Of the schemes currently published on the GOV.UK site and administered by the by the Rural Payments Agency (RPA) on behalf of the Department for Environment, Food and Rural Affairs (Defra), there are none available that specifically assist existing farmers who wish to remain in the farming industry despite current challenges.

Grants on offer such as The Sustainable Farming Incentive pilot scheme, Local Nature Recovery and Landscape Recovery, and The Farming Investment Fund (FIF) offer financial incentives for farmers to manage their land in an environmentally sustainable way or improve their farms and equipment to bring about environmental benefits, but the grants on offer appear to fall short of supporting farmers with relation to the issues of increased operating costs. Despite the UK farming crisis and the Committee’s findings, rather than being assisted to remain in the industry, UK farmers are being paid to exit it.

Sadly, this is a situation being faced by farmers globally, with several current crises abruptly and negatively impacting the industry. As farmers struggle to overcome the challenges of running and maintaining viable agricultural interests; often unsuccessfully; their businesses and land become susceptible to bank repossessions and to land grabs by wealthy investors.

In the United States of America, the situation does not appear to be any better, as vital farming land is being amassed by ‘the few.’ As reported in 2021, software developer and business magnate Bill Gates was the biggest owner of farmland in the US owning over 240,000 acres of agricultural land across 18 states. This has been regarded as an unusual investment option by a someone who has never shown any remote interest in farming. When asked about his motives for land purchases on Reddit, Gates said seed science and biofuel development were major drivers of the acquisitions. He added that the investment group he controls; [Cascade Holdings] who is a shareholder in plant-based protein companies Beyond Meat and Impossible Foods as well as agricultural equipment maker John Deere; chose to do it.

It does not bode well for any country facing a farming and global food crisis when masses of key primary production land is owned by ‘the few’ who’s intention is to divert land use to pursue interests other than produce and meat based food production, or when governments are paying farmers to exit the industry rather than assisting them to remain in the industry.

And surely, if ‘pandemic-caused’ labour shortages are to be cited as the main reason for the current farming crisis in the UK it would make better sense to install financial schemes to address the issue and assist farmers to continue contributing to global food production.

Up until January 2021 the UK government previously offered a small grants Countryside Productivity Scheme funded by the European Agricultural Fund for Rural Development (EAFRD), to assist farmers and forestry sectors to purchase equipment, improve productivity in and help create jobs and rural economy growth. Payments under the scheme, however, are no longer available and the scheme has not been reinstated.

Considering the warnings echoing around the world, the question must be asked – why are world governments not doing more to support the farming industry to ensure its future in the face of imminent food shortages.

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