As an accountant I know about formal arrangements; the ones which involve paperwork. I am also aware of many more informal ones that make everyone’s life run a bit more smoothly such as, “Will I pop down with the teleporter to help out and you could give me a hand with that other job that needs two tractors”.  A few weeks ago Central Scotland ground to a halt for three snow days. Many of the farmers where I live were out clearing roads, driveways and school playgrounds. Of course farmers are not obliged to do this, but they do it because they know the local people, it is their local community, they care about their environment and it contributes to the general smooth running of people’s lives. Often people forget that farming doesn’t stop when the snow comes and actually for livestock farmers in particular, excessive snowfall and low temperatures makes their job a lot harder.

On the Saturday at the local supermarket many of my neighbours were comparing the empty shelves to Soviet rationing. Indeed, there was no milk or bread and very little fruit or vegetables. This was a reminder to many people of what farmers actually do. It wasn’t because the cows weren’t getting milked, it was simply that the milk couldn’t get transported from the farms to the processing plants and then onto the supermarkets. I suspect this reminder will be short lived. Continuous education is essential when it comes to sharing the good work the farming industry does. I also couldn’t help but think clearing roads for no reward was a brilliant example of “public goods for public money”.

We are hearing a lot about “public goods for public money” in the context of Brexit and the future of agricultural support.  To my mind these are just words and currently serve no practical application to planning your business. What I would say is that there is little mention of food production and the direction of travel is definitely environmental, with the new buzz words being “natural capital”. Of course environmental doesn’t necessarily mean farming butterflies. Perhaps it would be an idea to open peoples’ minds (farmers and non-farmers) to the different definitions of environmental, in the context of good commercial farming practices. I expect the environmental enhancements likely to be incentivised in the future are:

  • Soil fertility
  • Managing run off
  • Water quality
  • Filtration systems
  • Managing peatland to create carbon sinks
  • Woodland management

It can be easy to see these enhancements as a distraction to the core purpose of food production but l guess it comes down to how much the financial incentive is and how the incentive is given. Financial incentives are not always in the form of subsidy. An alternative could be tax incentives. Ultimately if these activities are to co-exist with food production, the reward for changing behaviours needs to be attractive enough to make them happen. Similar to renewables – who would have solar panels without the feed-in tariff?

The best people to make these things happen are farmers & land managers. It is important the politicians do not lose sight of this because commercial farming makes the countryside what it is, creates the public goods people want access to, which in turn drives the leisure & tourism sectors. It is a complex ecosystem of business & commerce and the farming industry needs to continue educating consumers about what public goods are, so that public money can follow it. If we cannot articulate a public good then attracting public money will be challenging.

If you want to discuss any of the points raised in this blog please get in touch with me here, or:

01738 441 888
ian.craig@campbelldallas.co.uk

The information in this blog should not be regarded as financial advice.  This is based on our understanding in March 2018. Laws and tax rules may change in the future.