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Review Friday, 15 December, 2000, 10:07 GMT
Farming: Any breaks in the cloud?
The UK's farming sector had a dreadful year. But as BBC News Online's environment correspondent Alex Kirby reports, they are hoping for some improvement in 2001.

On a Welsh hill farm the other day, I met a man who was selling his calves for 3 each.

It is not unknown for upland farmers to receive just 25p for a sheep.

Across UK agriculture, the latest figures suggest, there is a suicide every four days.

Yet some in the industry have begun cautiously to speak of a possible upturn some time next year.

Ian Gardiner, the deputy director-general of the National Farmers' Union, told BBC News Online: "I cannot imagine 2001 being worse than this year, an absolute 'annus horribilis'.

"It's been a rough year. And since 1996, when the BSE disaster struck, each year has been rougher than the last."

Not only the NFU thought 2000 was a rough year. In March the Prime Minister, Tony Blair, met farmers' leaders.

The result was the government's Action Plan for Farming, backed by a promise of more than 200m to alleviate the crisis.

Delivering results

It offered immediate financial help to the worst-hit farmers, and promised to seek reform of the European Union's Common Agricultural Policy.

It also committed the government to support the rural economy, to ease the burden of bureaucracy, and to give farmers the chance to learn new skills.

Ministers say they have already secured 66m of EU compensation for farmers, and have announced steps to help them over fuel prices and transport costs.

cows feeding
Beef farmers yearn for confidence
They say there is 300m more compensation to come from Brussels over the next three years, and they have launched a rural development programme, costed at 1.6bn.

On the farms, though, the depression is still very slow to lift. The remedies will take months or years to kick in: the bills must be paid now.

Government figures published at the end of November showed a 29% fall in the real value of the total income earned from farming.

From 2.4bn in 1999, it fell this year to 1.71bn - the fifth successive year it has dropped.

Sterling the culprit

The NFU said this showed that farm incomes had fallen by 72% since 1995, and now stood at 7,500 per farmer to cover both salary and the return on business investment.

The NFU president, Ben Gill, called the figures "soul-destroying".

"The primary cause of this crisis is the strong pound, which has hurt our exports and sucked in food produced abroad", he said.

Ian Gardiner does not disagree. "If you look at the immediate past it's been terrible", he agrees. "It's been one hell of a year."

"Very few markets are anything more than halfway to satisfactory, and many are poor. Even the largest and most efficient farms are in real trouble.

Hope dawns

"There remain worries over beef: the swine fever outbreak is dying out, but it's still there. And then there's the weather.

"But there are one or two encouraging signs, breaks on the far horizon.

"The upturn in world commodity markets is having quite a big impact. And products are flowing out of Europe without export refunds attached.

"So any further improvement there (and the OECD envisages there will be an improvement for the next three or four years, provided growth continues) will come to the farmers.

"The dairy sector's plight is bad, but it's improving. We're ending the year with milk prices higher than when we began it, and rising.

"For cereals, next autumn's futures market price is above this autumn's actual price."

pigs in field
The swine fever outbreak is declining
For pig farmers, Mr Gardiner thinks the end of the disease outbreak offers "light at the end of what's been a horrible tunnel".

He hopes consumer confidence in beef will return as other EU countries remove older animals from the food chain. And he is even hopeful that exchange rates have done their worst.

"The sterling-euro price relationship is still the dominant factor determining the profitability of UK agriculture", he says.

"Maybe the euro has found its bottom against the pound. There's more upside potential for UK farmers from exchange rates in general than downside."

Weather watch

Farm borrowings are rising, and Mr Gardiner says most commentators see more potential for a cut in interest rates than for an increase.

But the joker in the pack, he acknowledges, remains the weather, "the biggest negative factor for the future".

"We need four weeks of sunshine and drying winds", says Ian Gardiner. "And even then there'll be real problems.

"I know a farmer in Kent, in the dry south-east of England, who in the three months since mid-September has had close to his entire annual rainfall."

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See also:

01 Feb 00 | Business
01 Feb 00 | Business
12 Oct 00 | UK
31 Jan 00 | Farming in crisis
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