East of England Commentary 2011/2012
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East of England Commentary 2011/2012 This report includes data collected from the Farm Business Survey for the 2011 to 2012 financial year, relating to the 2011 crop harvest. Please note that due to a change in farm classification, results from the 2010/2011 and 2011/2012 years are not directly comparable with results prior to that date. Please see the explanatory document at http://www.defra.gov.uk/statistics/foodfarm/farmmanage/fbs/ for further details of these changes. The Farm Business Survey is conducted on behalf of, and financed by the Department for Environment, Food and Rural Affairs, and the data collected in it are Crown Copyright. Nature of Farming in the region The majority of the farmed area of the East of England is focussed on combinable crop production due to its climate, landscape and suitability of soils. In the northern part of the region, fenland and silt soils permit production of sugar beet, potatoes and field scale vegetables. Pig and poultry production is important in rural East Anglia due to the proximity of production of grain for feed. Horticultural production is concentrated in the proximity of London and to the north of the region. Grazing livestock utilise grassland throughout the East of England with higher numbers in the area of the Norfolk Broads and in Hertfordshire. The Norfolk Broads are the East of England’s National Park. This designation covers two per cent of the East of England. Areas of Outstanding Natural Beauty (AONBs) account for six per cent of the region (15 per cent across England)1. Contribution of farming to the region’s economy Based on Defra statistics for 2010, some 39,903 people were employed in agriculture in the East of England. As a share of the total workforce, the agricultural workforce represented about 1.43 per cent of the total. Contribution of the region’s farming to national farming The East of England had the largest Gross Output of any region in England at £3,412 million in 2011. This was 19 per cent of the national output. After deduction of Intermediate Consumption of £2,108 million, the Gross Value Added was £1,304 million. A total of 189 organic producers farmed 16,000 hectares in 2011. They accounted for just under five per cent of the organic land area in England and a total of 1.1 per cent of the region was farmed organically. This represents a decline in popularity in organic farming as 35 producers ceased organic farming of 1,000 hectares in the year in the region. 2010 2011 FBS year Weather The prevailing weather in 2010/2011 is summarised in the sunshine and rainfall anomaly chart at Figure 1. 1 East of England Regional Sustainable Development Indicators Factsheet, 25 February 2010 Figure 1 Sunshine and Rainfall Anomaly, January 2011 to March 2012 East Anglia 250 200 150 % 100 50 0 July May April June March August January October February November December September sun rain Autumn 2010 was characterised by good conditions for winter crop establishment. Very cold weather halted drilling in late November. The winter of 2010/2011 was unusually cold and dry characterised by the coldest December for 100 years2. This was followed by the warmest spring since the start of records in 1910. The absence of precipitation that gave rise to the 2011 drought brought exceptional sunshine, with the East of England receiving 30 per cent more sunshine than average. March 2011 was the driest for 60 years as only 13.3 millimetres of rainfall fell in England, only 20 per cent of the long term average3. On 16 May, after ten weeks without significant rainfall, drought crisis talks were carried out between Defra, the NFU, the Environment Agency, Natural England, Water UK and the UK Irrigation Association4. By this time, cereal crops were showing severe water stress with yellowing of leaves. At the end of the month, agronomists suggested that 85 per cent of cereal crops had been affected by drought, and 20 per cent of wheat and barley severely hit5. By this time, the East of England was facing its driest season for 101 years6. A drought order was issued for Lincolnshire, Cambridgeshire, parts of Bedfordshire and Northamptonshire, and western Norfolk on 9 June 20117. In these areas, 100 farmers were asked to cease irrigation and a further 200 farmers in Suffolk were warned that the Environment Agency may need to stop irrigation by the end of the month. In East Anglia, just 28.1 millimetres of rain fell between March and May, whilst only 49.4 millimetres fell in south east, central and southern England in the same period. Rain fell in the summer, with the result that it was a wetter summer than 2010, but not as wet as the very wet years of 2007 to 2009. The autumn was a little drier and warmer than usual, but generally provided favourable conditions for the autumn cultivations and root harvesting. 2 Met Office, www.metoffice.co.uk 3 Farmers Weekly Interactive, www.fwi.co.uk , 5 April 2011 4 Farmers Weekly Interactive, www.fwi.co.uk , 16 May 2011 5 Farmers Weekly Interactive, www.fwi.co.uk , 1 June 2011 6 Farmers Weekly Interactive, www.fwi.co.uk , 6 June 2011 7 Drought management briefing, Environment Agency, 9 June 2011 Economic Background The economic environment was characterised by recession, austerity measures and serious concern about the economy of the eurozone. In December 2011, the possibilities were that one or more countries could default or leave the eurozone or the single currency could collapse8. The year was characterised by a weakening euro. In early 2012, this signalled the possibility that the UK’s agricultural commodities would be less competitive on the world market, but inputs would be more affordable9. Fertiliser prices reduced in 2011 following significant worldwide investment in production capacity, but rose later in the year in response to demand for agricultural commodities10. Analysts at UBS ranked price drivers of all commodities in spring 2011, placing crude oil and the metal palladium highest, followed by phosphate and potash in third and fourth place11. From £210 per tonne in June 2010, the ammonium nitrate price rose to £260 per tonne in September and £295 in October, at the same time, urea cost around £220 per tonne, rising to £320 per tonne in October12 13 14. In September 2010, triple super phosphate (TSP) sold for £325 per tonne rising to £392 in October although the price of muriate of potash (MOP) was little changed at around £332 per tonne during the two months. In the spring, ammonium nitrate reached £350 per tonne and urea £340 per tonne, whilst TSP and MOP traded at £385 and £330 per tonne respectively15. Farmers faced an 18 per cent increase in ‘agri-crime’ with thefts amounting to £8 million in value according to NFU Mutual16. Policy and Market Developments Rural Economy Growth Review In November 2011, Defra launched the Rural Economy Growth Review. This included initiatives such as: - consulting on the more flexible use of farm buildings - improving rural broadband - promoting tourism in rural areas - supporting the upfront costs of developing renewables projects Rural and Farming Networks In January 2012, Defra Secretary of State Jim Paice announced the formation of Rural and Farming Networks that will give rural business leaders ‘a hotline to the heart of Government’. They will ‘identify and feed back local issues and concerns’ ‘in order to make policies more rural-friendly’. ‘The networks will bring together people from rural communities, rural business and the food and farming industries’. By May 2012, there were 17 such networks. In the East of England, these networks were Essex Rural Partnership and Farming Food and Rural Network East (which covered the East of England excluding Essex). Rural Development Programme for England (RDPE) 8 Farmers Weekly Interactive , www.fwi.co.uk , 14 December 2011 9 Farmers Weekly Interactive , www.fwi.co.uk , 12 January 2012 10 Focus on Gleadell, Gleadell Agriculture 11 FarmBusiness.cc, farmbusiness.cc , 8 April 2011 12 Farmers Weekly 18 June 2010 13 Farmers Weekly Interactive , www.fwi.co.uk , 20 September 2010 14 Farmers Weekly 22 October 2010 15 Farmers Weekly 18 March 2011 16 Business Weekly, www.businessweekly.co.uk, 7 August 2011 From July 2011, responsibility for the Rural Development Programme for England (RDPE) was transferred from the Regional Development Agencies (EEDA in the East of England) to Defra. The £20 million Farming and Forestry Improvement Scheme (FFIS), part of the RDPE, was launched by Defra in November 2011. “The FFIS is part of the Rural Development Programme for England (RDPE) and is a scheme of support, developed to help farming, forestry and horticultural businesses in England to become more efficient at using resources. This scheme aims to help make your business more profitable and resilient whilst reducing the impact of farming on the environment.” The scheme permitted grants of between £2,500 and £25,000 for schemes that: - save energy and reduce carbon emissions - reduce dependence on artificial fertilisers - Improve soil quality - Improve animal health and welfare - Save and recycle water - Promote woodland management by processing timber more efficiently. Nature Improvement Areas (NIAs) Defra launched 12 Nature Improvement Areas in February 2012. These designated areas were selected from 76 applications in a competitive bid for a share of £7.5 million from 2012 to 2015. Candidate NIAs typically exceed 10,000 hectares, include a variety of land uses, and provide opportunities to enhance the ecology and link with existing landscape- scale initiatives. In the East of England, the Greater Thames Marshes NIA was selected for inclusion.