Monday, 25 August 2008

A perfect storm

While the media are obsessed at the ability of a few athletes to run/ 
swim/ cycle/ dive/ sail/ jump a little bit better than someone else, 
they are completely ignoring the real world of deaths still going on 
in Georgia at the hands of the Russians, of economic crisis, of 'head-
in-the-sand' politicians.  They look the other way from the Chinese 
whose homes were expropriated without compensation to build the Birds 
nest complex, they ignore the fact that vast tracts of northern China 
have had their water supplies diverted to Beijing and their power 
stations shut down (and their industry with it) to keep Beijing full 
of smog.

Now go out in the country here and see what is happening to our 
harvest.  You don't have to be an agricultural expert to see 
flattened wheat with fungus growing on its sodden ears.  The 
'Greenies' with their carbon footprint fetish will somehow blame it 
it on us for not  building more totem poles shaped as wind generators.

Our weather is behaving as it often does - unpredictably.  It's now 
in a cold and wet phase.  That makes for food shortages and thanks to 
the EU's insane Agricultural Policies it will be difficult to get 
imports at a reasonable price to make up the domestic shortfa`ll.

Still i suppose we could melt down all those 19 gold medals and buy 
some wheat from somewhere.

xxxxxxxxxxxx cs
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EUREFERENDUM Blog   25.8.08
A perfect storm

One of the (many) stories sitting on my files to do was an article 
picked up from the front page of The Yorkshire Post on Saturday,- - - 
- -  on the dire state of the UK wheat harvest.

Coincidentally, the story was picked up yesterday by the Mail on 
Sunday and thence by Watts up with that.

This invaluable blog, quite rightly, got excited by the headline to 
the Mail which proclaimed, "Awful August has delayed this year's 
harvest but global warming is not to blame" - a distinct contrast to 
The Daily Telegraph piece in early July which did indeed seek to pin 
the wet weather on global warming.

But, while we can rejoice in sense returning to at least one 
newspaper, behind both the stories of a bad harvest lies a disturbing 
picture that could have serious consequences for British arable 
farming - and thus the rest of us - amounting almost to a perfect storm.

The particular problem, as we pointed out in our last piece, is not 
so much quantity but quality, especially with the wheat crop which 
has deteriorated severely as a result of the bad weather.

As The Yorkshire Post reports, this means that much of the crop will 
be fit only for animal feed. Yorkshire farmers alone could take a 
"hit" of £10 million as their produce is downgraded.

If that gives temporary relief to hard-pressed livestock farmers, who 
have seen feed prices escalate to record levels, it is bad news for 
consumers as high protein wheat for bread-making will have to be 
imported in some quantity, at a premium of £20 per metric ton.

However, the problem for farmers may be even worse than the headlines 
suggest, as events elsewhere in the world take shape. Here, the 
situation in the Ukraine is of special interest. The region, on the 
one hand has enjoyed a record harvest, up to 43 million tons from 
29.3 million last year, with expectations of exporting a surplus of 
17.5 million tons during the coming year. On the other hand, the crop 
has suffered what is described as "insect-related" problems, which is 
forcing about 70 percent of it to be used for animal feed.

This surplus on the world market is expected to drive down prices of 
feed wheat, creating an abysmal situation for British farmers. At a 
time when input costs - from diesel and fertiliser to labour - are 
all rising, they are now reconciled to prices which are unlikely to 
cover the costs of producing the harvest.

Small wonder, the YP is retailing sentiment from farmers that many of 
them will drop out of wheat next season. Some experts are saying this 
could lead to a shortage next year.

It is here, of course, that an agricultural support system could make 
the difference. Where prices have been driven below the cost of 
production, there is a classic role for farming subsidies, if for no 
other reason than to ensure the availability of supplies in the 
following season and to take the edge of shortage-induced price 
increases.

However, now that the EU - which has sole competence over our 
agriculture policy - has opted out of production support and is 
looking to cut subsidies over the next budgetary period, farmers are 
on their own. They are looking at reduced prices, increased costs and 
less state support.

Perversely, the cut in support will not filter back into reduced EU 
contributions or lower taxes as the EU has siphoned off some of the 
subsidies to pay for its vanity project, the Galileo satellite 
navigation system, while it is also proposing to hand upwards of $1 
billion to developing countries to promote farming there - reducing, 
incidentally, export opportunities for British farmers.

The net result of all this is that British consumers will still be 
paying huge sums for an agricultural support system, but one that no 
longer functions, while also paying inflated costs for their bread 
and other wheat-containing foods, costs which are set to go up even 
further next year.

Somehow, this is not quite what either farmers or consumers expected 
when we first joined the EEC but, as the implications of yet another 
failed policy sink in, one wonders whether the farmers will finally 
see the light and round against the EU, which is now doing nothing 
but add to their woes.
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Posted by Richard North