HM Insights

Coronavirus: positives to focus on for traditional farming businesses in Scotland

It is important to feel wanted. To feel essential. To be a key worker. For many farmers across the nation, these feelings has been absent for a number of years, perhaps decades. Successive governments have attempted to assuage these feelings but for many the attempts have not succeeded. With the worsening global COVID-19 pandemic, food security and ensuring the nation is fed are now on top of the government's agenda. Not since World War Two has the nation's farming sector been seen as so essential.

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Fergus Ewing, the Cabinet Secretary for Rural Economy and Tourism, recently commented on the essential role farmers will play during and after the crisis:

“I’ve said on innumerable occasions the primary purpose of farmers is to produce safe, nutritious, tasty food, but the message now will resonate very strongly throughout society as a whole because of the fears brought by this crisis, which has brought home the fragility of the supply chain and global export links, so it will influence policy in future and I welcome fthat”.

The scale of the potential damage is clear to see. As an example, dairy farmers have seen prices collapse as a direct result of lockdown through the closure of cafés and restaurants - with demand from the hospitality sector falling by upwards of 75% and forcing some farmers to dump unsold milk down the drain.

It would therefore be remiss to shy away from the potential economic damage of the pandemic, but the sector for a brief moment should contemplate opportunities that would not, in ordinary course, present themselves. We propose to look at just a small number of potential opportunities.

Deregulation

Could the changes in the regulatory framework move farm businesses from farming for compliance to farming for the market and the nation? While the dilution of animal welfare regulation would be seen as a negative, farmers across the nation would unquestionably welcome deregulation. With that in mind, it is a positive step that the Scottish Government have announced that Scottish growers will not be expected to meet the two and three-crop rules of the Common Agricultural Policy this year. Under the rules, farmers growing more than 75 acres of arable crops are expected to ensure their rotation includes at least three crops, with the main crop accounting for no more than 75% of the planted area and the third crop no less than 5%. Although the step was in respect of the “extended period of wet weather” it perhaps provides an insight into future deregulation which could be implemented in response to the ongoing pandemic. If wet weather can alter policy then an economic catastrophe presented by COVID-19 may be the touch paper to trigger an explosion of agricultural revolution, the likes we have not seen since the end of World War Two.

Routes to market

With increasing restrictions on movement and social distancing, we have seen an increase in farm shops/farmers utilising online sales including both click and collect (ensuring recommended social distancing) as well as home delivery direct to consumers.

The public are quite rightly supporting the push to buy home grown/reared. As well as giving this additional "route to market" this can help change the power dynamics for the farming sector.

This builds on an already growing trend to shun lower cost imported meat, however, this may falter given the economic uncertainty millions of households will face. For some, putting "something" on the plate will always trump where that "something" came from.

Ongoing subsidy support

The double edged sword, of disruption and opportunity, unsheathed on leaving the EU has only been sharpened with the ongoing pandemic. Over 40 years of agricultural policy has been undone as a result of leaving – presenting significant challenges for everyone within the farming sector. Scottish farmers now must fiercely wield that sword and directly influence the new domestic policy direction which will affect generations to come. A new domestic agricultural policy ought to move the sector to a situation where market returns exceed the costs of production and Scottish farmers and crofters are less reliant on direct support. The increasing recognition of Scottish farming being essential, key workers, critical to feeding and supporting the nation undoubtedly places the sector on a much stronger footing for all future subsidy negotiations.

If there is one sector that will weather the storm and seize the opportunities presented it is the Scottish farming sector.

Get in touch

Our Rural Economy Team continues to work with our clients and key stakeholders to provide advice and support throughout the current lockdown as they deal with the consequences of the current pandemic. If you require any advice on the current pandemic or what opportunities it may present then please do not hesitate to contact our Team on the contact details below.

Useful links

CORONAVIRUS ADVICE                      

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