Richard Rankin, CEO of H&H Group, fears farmers will struggle with costs rapidly rising and explains how his team are there to help identify opportunities and support the industry.
Richard Rankin, CEO of H&H Group , is a worried man. He fears that with the current international situation and rapidly rising inputs, the price of food will rocket. And this could be difficult for the British public to accept given they have had decades to get used to cheap food coupled with the energy price increases we’re all experiencing.
“Fuel costs have gone up by 20% and if we completely ban imports of Russian oil, they are likely to rise further. This will have an impact on everyone, including farmers, who also face a massive increase in energy and fertiliser bills, coupled with reduced farm support payments. It’s a perfect storm, one which could sink many farmers, at a time when it looks like we need them the most.
Consumers and farmers will have to accept that food costs are going to go up around the world. With wheat production interrupted in the Ukraine, the Bread Basket of Europe, and sanctions against Russia, the US Department of Agriculture has projected that wheat exports from these two countries will fall by at least 7 million metric tonnes this year. Even before the war, because of the huge pressure put on supply chains by the Covid epidemic, global food prices had risen to an all-time high, and wheat prices are already at a 14-year peak.
This is a double-edged sword for farmers, as they enjoy price rises for their produce but then struggle to offset the rise in input prices, for those making minimal profit it will be catastrophic. A likely outcome is that the UK will start to rely on cheaper imports. These will almost certainly be produced to a lower standard and cost, and will result in unfair competition for UK producers who farm to the highest standards.
This is where, in my opinion, there are obvious opportunities, currently the government’s support for farmers is being reduced, and more emphasis is being put on the protection of the environment than the production of food. Whilst I completely support the move to more eco-friendly farming, it cannot come at the cost of food security.
Given the global turmoil and resultant uncertainties it is more essential than ever that we are as self-sufficient as possible and don’t depend on the global supply chain given its proven fragility. As has already been clearly demonstrated by the pandemic, where disruption to international trade has meant shortages and price increases across the board.
We need to urge our politicians to look at the bigger picture and ensure that any international trade deals they do are good for both farmers and the UK but priority should be given to investment closer to home. For far too long, across all parties, the political answer has been a quick fix rather than a long-term solution.
It is also essential we work together, to encourage the public to buy British and recognise the value of this, demonstrating how this is important, not just for farmers, but for the UK economy as a whole. It is vital to ensure ongoing security of supply and it is far more sustainable to eat food that doesn’t have to travel thousands of miles from farm gate to plate. Investment into the British farmer to produce sustainable food must be part of the solution to all of this.
At H&H our mission is to add value to and help protect the economies we serve, we are more than just a mart or a land agent or an insurance broker, we are an integral part of a clear and transparent food chain. Last week our Dairy Expo brought the whole UK dairy industry together, and was a wonderful showcase for the sector, helping to build networks and adding value. Highlighting and celebrating everything we’re good at in the UK. In fact there’s an idea for our government, invest in what we’re good at and make it even better and bigger, feeding our people and saving the environment at the same time.
Across all our companies, H&H Land & Estates, H&H Insurance Brokers and Harrison & Hetherington, we have a team of specialist professionals and advisers, who between them have decades of experience and close connections to the local farming community. We are here to support farmers and those working in other associated Agri sectors. So if you are concerned, planning a new project, or just want advice, please get in touch, we are here to support farmers and the wider agricultural industry in any way we can.”