12th July Newsletter

Friday, 12th July 2007

Where to start – we seem to have started all our recent newsletters by talking about how the weather is making our job here at Linscombe particularly difficult this year. Having thought long and hard about it, I’ve got to say that I can’t really come up with anything more relevant!

The bright side first (quick to deal with…). We finally managed to get out on the field with the planting machine on Wednesday and burned through 2 plants per second per person for 12 hours, pausing only to re-load and for a very brief lunch break. Very wet and difficult conditions at the start gradually gave way to better ones as the sun came out and a drying wind picked up. By the end of the day, some of the early planted lettuce had actually wilted! What a difference a day makes. Thursday was, or course, back to normal with sticky soil and drizzle preventing the planter going on for more than a couple of hours. At least we got the month old backlog more or less cleared. Don’t mention the weeds.

Looking around us at the moment, and listening to other farmers and the media, it seems that, not only are we not alone, but we are better off than many. There are stories of entire crops being wiped out and the situation with hay and silage making must be getting worrying. Cereal harvests will be done with great difficulty, if at all, for the time being. Which brings me to the main point.

As we all know, the last fifty years in the West have been characterised by an increasing diversity of increasingly cheap and convenient food. Not unreasonably, we now assume that food shortages belong firmly in less developed countries where the regular droughts and floods seem to be getting worse as human populations grow and local resources get pushed under the greater pressure to support them. In the West, large areas of relatively productive land lie idle and even larger areas are farmed below capacity. Technology, combined with the existing slack in the system, could surely more than adequately compensate for problems. Couldn’t it?

Food production isn’t, however, a production process than can be turned on and off like a widget factory. We manage an annual cropping cycle, dependant on day to day conditions, within a ten year financial framework; not uncommon and surprisingly difficult to change in the short term. Within that, one of the main issues has always been risk management; hence the contrasting agricultural models in the stable temperate and the more marginal areas. This is likely to become more significant if global climate bites as hard as it might and this, in turn, will certainly deter investment unless returns increase to compensate. In a year like we are in, it becomes apparent that, although highly influential, it is not the longer cycles alone that affect agricultural fortunes most significantly, but their interaction with short term events. In this case, a combination of historically poor financial returns may well combine with a single soggy month to produce a result that increases scarcity in the short term whilst significantly weakening long term productive capacity by removing a increased number of producers from the sector. Once gone, entry costs will deter all but the ideologically committed from returning.

The current political philosophy, however, believes that the market will deal with it. In the short term, scarcity should mean higher prices which should help keep some producers producing. For another year anyway.

Bring back the sun!