Letter: The farmer's fate

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The Independent Culture
Sir: Sean Rickard is content to let "inefficient" farmers produce at world prices or perish ("Why should inefficient taxpayers prop up our inefficient farmers?", 5 January). He argues that small farmers' low incomes are a social and not an economic problem.

However, price support has inflated the values of farm assets. It is these values which provide pension funds for farmers. Removal of price support under-mines these funds. Compensation therefore can be seen to be legitimate and, if properly designed, helpful in assisting the structural changes that are both necessary and inevitable.

However, the present design of compensation payments is not at all helpful. They are paid annually on the basis of cropped areas and livestock numbers. Farmers need the option of a lump sum.

A farmer who is too ill to farm could retire if he had this option. But now, when market prices collapse, the farm asset values no longer generate sufficient pension funds to allow retirement.

Farm markets are notoriously volatile. Only the rich can afford to farm, as only they are secure enough to weather economic storms. A reformed policy needs to pay attention to the stability of farm markets. Until it does, we can expect farmers to be resistant to change. The European Commission's Agenda 2000 says nothing at all about this issue.


Department of Agricultural Economics and Food Marketing

University of Newcastle upon Tyne