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Dealing with a changing marketplace: how do farmers cope?

When agriculture hits the headlines, seldom is it good news for farmers. For instance, September saw Sir Paul McCartney and a host of other celebrities draw attention to the idea of meat-free Mondays. Cutting down on meat consumption may be good news for the planet (the UN estimates that livestock production is the cause of 14.5% of the world’s greenhouse gas emissions), but poses obvious challenges for meat producers. Meanwhile, there was further evidence of how exposed farmers are to changes in world market conditions. Earlier this year, the major New Zealand milk co-operative, Fonterra cut the estimated price it expects to pay its members by 14%. An increase in global milk production coupled with easing demand is putting downward price pressure on the EU – including struggling UK dairy farmers.

These recent developments demonstrate just a handful of the issues faced by farmers, in terms of global market forces, changing consumer attitudes and wider environmental concerns. In any business sector, survival means being able to adapt in the face of change. Agriculture is no different. In the popular imagination, farming is associated more with tradition and continuity than innovation; this said, image can be misleading. In reality, farmers have been quietly adapting and innovating over centuries (for one thing, they’ve had to adapt to meet the needs of a growing population). This process of change continues.

Here are some of the ways UK agriculture is changing.

Re-evaluation of land use

Meat producers face big challenges in terms of sustainability over the long term, with the UN’s Food and Agriculture Organisation suggesting the global livestock sector is “one of the top two or three most significant contributors to the most serious environmental problems, at every scale from local to global”. At the same time, there is mounting evidence that too much meat (especially red meat) is bad for us.

In the long term, simple economics may dictate that less land is used for pasture and animal feed. Land prices are at a premium (last year alone, land values in the UK increased by an estimated 11%) – which means a process of constant evaluation of how best to use the land.

A place for non-food crops?

Some sections of the industry are already turning to non-food crop production. This includes pharmaceutical crops, energy crop farming and the production of crops for specific industrial uses, e.g. hemp, flax and cereal straw. Non-food crops (and biofuels especially) tend to court controversy. There is the argument that a big expansion of the biofuels industry could threaten food security. Against this is the view that biofuels can play a part in reducing greenhouse emissions and have other advantageous consequences – such as enabling the production of high protein animal feed, pure streams of CO2 for the drinks industry, as well as helping to create new jobs.

The proportion of arable land used for bioenergy purposes according to 0.5% (according to experimental statistics from December 2013). Non-food crop production is a niche area, but one where there is scope for growth – especially as policymakers look for a diverse range of ways to meet carbon emissions targets.

Catering for ‘farm staycationers’

To cope with market pressures, many farmers are diversifying to cater for a growing domestic tourism market. The number of people holidaying at home has increased – as has interest in the environment and food production. For instance, reported a 230% increase in inquiries about farm-based holidays over the last three years. To succeed in this area, farms need to offer a quality service, whether in the form of bed & breakfast, purpose built lodges and/or self-catering facilities. Very often this involves planning considerations and putting into place adequate agricultural insurance provisions to cover additional public liability risks. Farms are capable of creating attractive countryside experiences - but this requires thought and investment.   

Few industry sectors face the same level of upheaval and uncertainty as agriculture. The signs are that the face of British farming will continue to change to meet those challenges.