Agriculture is an increasingly global industry. Our prices and profitability are determined by the supply and demand dynamics of the world market. Whether it’s yields in North America or Russia’s ban on food imports from the EU, all shape the viability of UK farming.
Yet amongst these global dynamics, I was intrigued by a conversation with a livestock farmer. Whilst doing his farm accounts, he had noted down all the businesses he’d written a cheque over £1,000 to over the previous 12 months (in case you’re wondering why that particular farmer was still using cheques, you might want to delve into the connectivity issues that blight some rural areas). He told me that he recorded over 80 different businesses and how, on further inspection, he was surprised at just how many of the businesses were within a 20 mile radius of his farm.
This got me thinking about my own family farm and some of our regular spending. On reflection, I think we can trump his 20 miles! Through the course of a year, we’ll buy feed from nearby farms and from a merchant 6 miles away. When farm machinery breaks (normally at the most inopportune time), we’re always glad the agricultural engineer is just ten minutes away. We’ve had the same veterinary practice for the best part of 40 years; they’re based 5 miles up the road. As for professional services, our accountant and solicitor are in the nearest market town. And it’s a similar story whether we’re buying fuel or fencing materials, the businesses we interact most with tend to be local.
Such patterns of local expenditure characterise the majority of farming businesses in England and Wales. And that’s good news for our rural communities. The average farm business incurred costs of nearly £250,000 last year. With over 100,000 holdings across the country, the multiplier effect of that spending generates business and supports thousands more jobs across rural Britain.
Agriculture may be increasingly shaped by what’s happening globally, but we remain a sector that’s integral to the fabric of the British countryside and our local communities.
Phil Bicknell is NFU Head of Food and Farming