Starmer Should Read Kipling Before It's Too Late

His government is on collision course with some angry farmers...

This government has a penchant for launching ill-conceived ideological attacks on whole sections of society for no particularly important gain. Destroying agriculture to raise  just £1.8 billion by 2030 is idiocy. £300 million a year is a rounding error on the government’s bloated £1,000 billion budget. It won’t increase the quality or quantum of public service one jot. It farmers pass on the cost to consumers – which they will seek to do – it might add a bit to food price inflation. Another hit for "working people” and another own goal for Reeves.

Westminster and Whitehall now face angry farmers descending on them next week. Inevitably Two Tier Keir and his flunky Kahn won’t allow them the freedom to protest that they accord the antisemitic Palestinian lobby, or indeed the BLM and JSO cretins. However somewhere in the depths of the Cabinet Office the civil contingency planners should be sweating.

Farmers own heavy machinery. Stopping 10 tons of tractor towing 20 tons of manure in a muck spreader is difficult (unless you have a tank). Despite police threats of arrest, the grass on Parliament Square might yet get a nitrogen boost. So might other locations. Some farmers are talking about withholding produce (which will hurt their cash flow) or not taking sewage sludge to spread on their fields (which would degrade their soil). However these are  not major threats to the government, so are unlikely to force policy change.

Senior contingency planners will remember the spontaneous fuel tanker driver strike that so terrified Tony Blair. Incensed at fuel price rises, tanker drivers and farmers blockaded fuel refineries. The country nearly ran out of fuel – parts did – and troops were deployed with fuel tankers. The unions (not Blair) managed to get drivers working and the blockaders withdrew.

The UK’s  supermarkets rely upon continual  deliveries of refrigerated and frozen food by HGVs – I know, I drive one of them. Imagine if angry farmers blockaded the supermarkets’ chilled and frozen food distribution centres.  Within 24 hours there would be no more milk, meat or other perishables on the shelves, nor any replenishment of the frozen food aisles. The threat of shortages would lead to panic buying and the shelves would empty almost immediately.

The armed forces have no refrigerated food trailers, nor many of the HGV1 drivers necessary to move them.  As Marie Antoinette found out the hard way, a hungry population gets rid of its leaders. Reeves and Starmer would either have to back down, and quickly, or face riots and looting on a scale that would make the summer’s disturbances seem trivial.

The taxation problems are the tip of the iceberg. British farming is in a bad way. Farmland is very expensive, even simple pasture costs around £10,000 an acre. It can perhaps be rented out for £100 an acre, a return of 1% in a world where the UK government pays 5% and inflation runs at 3%. If the landowners chose to farm the land themselves they could, perhaps, support three sheep and their lambs on that acre, although they would also need a building and machinery to harvest fodder for the winter. Raising livestock is marginal at best.

A decade ago I used to raise a few pigs. I bought them as 12 week old weaners, raised them for about four months, slaughtered and butchered them. Friends bought quarter pigs at £10 per kg (which was the price of a leg of pork in our local Tesco). The income from selling three and a half carcasses covered all the input costs (excluding housing and labour) of raising four, so my gross margin was 12.5%. Fine for a bit of fun and a year’s pork, but impossibly low for any production or manufacturing business.

Today that pork joint costs just £6 per kilo. Had the price kept pace with inflation it would cost £14 per kilo. In real terms the supermarket retail price of pork has fallen by more than 50%. Good news for the consumer, good news for the supermarket. Not so great for the farmer.

While the pork market is notoriously volatile (one sow can rear two litters of ten or more piglets a year), the wheat market isn’t, barring financial crashes and invasions of Ukraine. Like most arable crops wheat is harvested once a year. The chart below from Macro Trends shows the price of a bushel of wheat over the past 65. (Trivia time – a bushel is a measure of volume, as grain needs  transport. An American bushel is 35 litres. A bushel of grain weights about 60 pounds or 27.2 kg. An Imperial bushel is about 3% larger.)

These prices aren’t adjusted for inflation. One pound in 1959 would be worth £29 today. In real(ish) terms the price of top quality wheat has fallen by 90%.  

In the same timeframe wheat yields have almost trebled, as the chart below shows, but that still means that the real income per acre has fallen by close to 50%.

Farming has become a high capital, low return business. It generally has a long lead time – one crop per field per year - and carries plenty of risk. Farmers battle the weather, and the multiple perils associated with raising livestock, as well as the oil price (which impacts of fertiliser as well as diesel) and now the idiocies of net zero and the venom of urban Marxists. Why would anyone want to own farmland if the economics are so poor?

It's a good question with no obvious answer. Clearly they stopped making land a while ago (Dubai’s islands don’t count) so land is a store of value that can’t be depreciated by money printing. With a rising population demand for land will, in theory always increase, so with a finite supply the price will continue to rise. Many insurance companies and pension funds are major landowners for precisely this reason. But economics aren’t the whole of it.

In the UK land used to be granted by the Crown, it therefore was power. A landowner had status and back in feudal times income and serfs. Today acres still command status in some circles, albeit not the ones that the Labour Party moves in no matter how smart their new suits. Land prices vary widely, but good land isn’t cheap anywhere. Even in subsidy free New Zealand, agricultural land can cost £15,000 per acre.

Which brings us to subsides. Almost all countries (other than New Zealand) pay farmers subsidies. British farm subsidies used to come from the EU Common Agricultural Policy (CAP). The CAP was often madcap, in its time delivering wine lakes, butter mountains and multiple olive tree frauds. UK farmers got around £2.4 billion a year in total. Post Brexit, UK farmers are in a transition period to a new subsidy regime. The total national quantum will be the same but more of it will be tied to land stewardship, environmental schemes and animal welfare than production.  That means that farmer’s income from making food will fall and it will become even less profitable.

If farmers can’t make a profit – which is how they feed and clothe their children – they will find other, more profitable land uses. The most obvious alternatives are “rewilding”,  turning the land into solar parks or growing energy crops to make biogas. The first is made profitable by grants, the other two by the various subsides associated with the benighted net zero policy.

You, the taxpayer, pay for this lunacy today. Your children will tomorrow. You’re paying through the nose as the subsidies for net zero solar must be more than for agriculture or farmers would not be swapping to them. You’re also paying for food to be imported – what isn’t grown in the UK must come from the rest of the world – unless mass dieting is imposed. That increases transport costs and, should you care about it, emissions.

If you do care about climate change remember that British agricultural land is some of the most productive on the planet. Replacing the yield of (say) an acre of Lincolnshire now converted to solar park might take two or three acres of ploughed African savannah or slash and burned Amazonian rain forest. Rewilded acres must be replaced too, so increasing “biodiversity” on the South Downs might reduce it in Borneo. The Green lobby doesn’t mention that.

Neither does the National Farmers’ Union the voice of the farming in Westminster. It has failed to make the case for farming for years – not of course that the Starmtroopers are interested in facts. The whole idea of removing the exemption came from left wing think tanks, including the Resolution Foundation once run by Torsten Bell. The facts are a little more complex than political theory.

Most people buy most of their food in a supermarket, with around 70% being sold through Tesco, Sainsburys, Asda and Aldi. The convoluted supply chain that gets a bushel of wheat from Farmer Giles’ field to inside a Hovis loaf on a Sainsbury’s shelf means that Farmer Giles isn’t in touch with the consumer. At best he speaks to Mr Hovis, more likely to a commodities broker buying the wheat forward. As one of 17,000 British cereal farmers ultimately selling to  around ten supermarket chains Farmer Giles has no vendor power – he’s a price taker.

Who sets the price? The supermarket and, possibly, Mr Hovis. Both of course are free to purchase from overseas. Both benefit from having produce sold to them at subsidised rates in the UK. In theory the taxpayers (i.e. supermarket customers) lose on the subsidy (tax) swings what they win on the discounted food roundabouts. Lower prices help supermarkets - wastage and inventory cost less, so their profit margins are higher. There’s a reason some former supermarket bosses have seats in the House of Lords.

For all the political talk of food security the reality is that the UK imports some 40% of all its food. That’s down from the peak 78% self-sufficiency of 1984, inevitable with a rising population and a finite amount of land. The UK has been importing food since Tudor times (or before). This was regulated by the various Corn Laws until they were repealed in 1846, (largely in response to the Irish potato famine). The agricultural, economic and political consequences were profound and far from obviously beneficial. Global markets may be economically pure but they have non-financial costs.

In the short term, Starmer’s government is set on a collision course with the electorate, 80% of whom did not vote Labour and increasingly feel they have been sold a pup or suffered a coup. While Starmer’s ability to obfuscate is almost unparalleled and his majority makes him feel invulnerable, he needs to remember that his mandate comes from the people, not the lap dogs on his back benches. Labour has no mandate for class war nor for the imposition of a Marxist command economy. Interpreting the election result as a carte blanche is not plain dealing.

Starmer needs to read Kipling’s Norman and Saxon:

The Saxon is not like us Normans. His manners are not so polite.

But he never means anything serious till he talks about justice and right.

When he stands like an ox in the furrow – with his sullen set eyes on your own,

And grumbles, 'This isn't fair dealing,' my son, leave the Saxon alone.

"You can horsewhip your Gascony archers, or torture your Picardy spears;

But don't try that game on the Saxon; you'll have the whole brood round your ears.

From the richest old Thane in the county to the poorest chained serf in the field,

They'll be at you and on you like hornets, and, if you are wise, you  will  yield.

For “Norman” substitute “apparatchik”, for “Saxon” “private sector worker”.

While his contingency planners fret about what furious farmers could do, Starmer could do worse than to work out how to yield, otherwise his government’s arrogant disdain for truth, economics, thermodynamics, agriculture and probity will end badly.

For everyone.

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