Farmers say policy uncertainty holding back investment in growth-boosting technology

Future funding certainty is critical to British livestock farmers as they consider increased investment in technologies that have the potential to cut food costs, improve productivity and boost growth, a think tank warns today.

As the Government mulls changes to agricultural funding and regulation to increase economic growth, the Social Market Foundation says that ‘precision farming’ tools, such as electronic ID tags, smart weighing systems, monitoring collars and farm management apps, could help close the agricultural productivity gap between the UK and countries like The Netherlands, Australia, and the US. (See notes)

Agricultural productivity is a focus for the Government’s Growth Plan, with ministers promising imminent action to make British farmers more efficient.

Yet in a research report based on interviews with farmers across the UK, the SMF found that many are holding off on spending money to modernise their operations due to uncertainty over new post-Brexit funding streams.

With Secretary of State Ranil Jayawardena proclaiming his Department of Environment, Food and Rural Affairs “an economic growth department” at the Conservative party conference earlier this month, the SMF urged the Government to reorient farming subsidies towards investment in precision technologies. At present, only 9% of government grants in England are earmarked for productivity-enhancing activities.

Farmers told the SMF that recent government policy announcements are complicated and confusing to navigate. This unpredictability is making it hard to plan ahead and make investments.

The think-tank found that the future of government funding is the “single biggest issue in agricultural policy” and the “single most important factor in shaping the future of technological adoption”.

Academic evidence highlighted by the SMF report suggests that precision technologies can bring considerable benefits to farming productivity, as well as improvements in animal welfare and reducing greenhouse gas emissions.

While farmers say they “want more technology and want to change” – and recognise the benefits of new technologies – they feel “stuck in a limbo” as policy uncertainty is a major barrier to widespread adoption of technology.

Other SMF recommendations include:

• Raising awareness of cutting-edge methods among farmers: the new What Works Centre for agriculture must be established with government support within the next 12 months.
• Improving farmers’ access to key data held by slaughterhouses and retailers
• Requiring electronic IDs for cattle, a move that has improved the use of technology in other countries
• Making farming more attractive as a career to younger people, including reviewing generosity and eligibility criteria of young farmer payments

This report was sponsored by MSD Animal Health UK. The SMF retains complete editorial independence.

Aveek Bhattacharya, SMF Chief Economist and co-author of the report said:
“Brexit offers the opportunity to fundamentally change the subsidy system and address British farming’s longstanding productivity challenges. Yet that opportunity is being squandered and uncertainty over the future of agricultural funding risks making things worse by undermining farmers’ confidence and ability to invest.

“When it comes to adoption of new, cutting-edge technologies – key to enhancing productivity – farmers are more than willing but the Government needs to meet them halfway with a better-designed subsidy system.

“Better use of technology in farming could help the Government achieve its objective of boosting economic growth, but only if farm subsidies are well-targeted and offer strong incentives to invest in tools that improve farm efficiency.”

Ian Anderson, Allflex Managing Director, MSD Animal Health UK, said:

“Health monitoring applications help farmers to predict health and welfare issues and spot problems in their animals early on.  Working with their veterinary professional, this allows timely decisions to be made regarding possible treatment, with the aim of reducing the  deterioration of the animal’s health, reducing antibiotic use and managing negative impacts on production. 

“And when it comes to breeding, beef and dairy farmers are using the technology to optimise conception rates while being more efficient with labour, time and other input costs.

“Every farmer deserves to have the advantages that such advances in modern agriculture are bringing.”

Sam Gayton, Business Unit Director – Ruminants, MSD Animal Health UK, said:

“We welcome the report published today by the Social Market Foundation.  Supporting the productivity and efficiency of UK livestock farming by engaging our highly skilled, hardworking farming community is a priority for MSD Animal Health UK and we are committed to ongoing partnership with the industry as a whole, with policy makers and with individual farmers and their veterinary professionals. 

“Success in this area is critical to our future food security and is a central factor in the international competitiveness and future trade success of UK agriculture.  Using the right technology, UK livestock farming will continue its progress in sustainable farming practices, efficiency and productivity, while achieving the highest animal welfare standards.  We believe these are priorities for food consumers, industry and government alike.”

• The SMF report, Moovin’ on up, can be found here.
• The report was sponsored by MSD Animal Health UK. The SMF retains complete editorial independence of its publications.

Figure 1: International comparison of total factor farm productivity. Base (100) = 3 year average to 1990)

Source: US Department for Agriculture