Farmers in `worst crisis since 1930s'

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The Independent Online
FARMERS WILL today call on the Governor of the Bank of England to alleviate what they say is their worst crisis since the 1930s. Ben Gill, the president of the National Farmers' Union, will meet Eddie George and tell him that high interest rates and a resulting strong pound are doing irreversible damage to the rural economy.

Today's plea comes after a report published by the NFU last week highlighting the knock-on effect the crisis is having on farming-associated businesses such as road hauliers, feed and seed companies, fertiliser manufacturers and rural pubs and shops. Ninety per cent of rural industries have laid off staff in the past year, according to the report.

Mr Gill said yesterday: "I will argue very strongly that there is a tremendous need for interest rates to come down. If they don't, the consequences for British agriculture and the wider rural community will be very severe."

He pointed out that Britain's 5.25 per cent base rate was more than double that elsewhere in European Union. The resulting strength of sterlingmeant cheaper imports had flooded in while exports had become more expensive abroad. It had also reduced the value of European subsidies.

The NFU said that in the past two years farm incomes had decreased by 75 per cent with farmers forced to sell at increasingly low prices. Over the past 12 months, the price of pig meat had fallen by 43 per cent, eggs by 36 per cent and lamb by 35 per cent.

A survey conducted last year found that 20 per cent of farmers will have left the industry altogether over the next decade. There has also been a 40 per cent fall in the number of young people applying for agricultural courses.

After a disastrous 1998 - described by farmers as the worst in living memory - the industry hoped the lifting of the beef ban, a weakening of sterling and a recovery in world commodity markets would help to ease the crisis. Mr Gill said: "We thought things would improve in 1999 but what we've seen since the introduction of the euro is a 10 per cent appreciation in the value of sterling. Conditions now are at their worst since the 1930s."

He added: "There is one particular example of an accountancy firm where they had 178 accounts done for farmers. There were only a handful of people who had made a profit in their last trading accounts."

The poultry industry has been particularly hard hit by the strength of the pound. In the past year around 2,000 jobs have been lost in the sector.

"The consequences of lots of people going out of production has a major effect on the rural economy," he said. "It means you need less wheat and barley, which means you don't have the need for the tractors and equipment; you don't need the abattoirs to slaughter the birds and you don't need the lorries to haul the carcasses about."

t One dairy farmer has sold his 100-strong herd of Friesians and taken up parrot breeding after his livelihood was threatened by the BSE crisis. Christopher Taylor, whose family kept cattle for four generations, has turned his 140-acre farm into a bird-breeding centre and parrot shop. Mr Taylor, from Telford, Shropshire, has 80 pairs of exotic birds, including macaws and African greys.