Since I last wrote a blog post I joined the RGS PGF committee to help work with and for the Geography Postgraduate community. One of the first events that we organised was the twitter conference. I applied to participate (but obviously didn't took part in selecting my abstract to be part of the conference) and I got retained.
I chose to try to answer the question that I was commissioned to answer for my Master Thesis in 2019 by the Carasso Foundation and AgroParisTech (France). A most interesting question to answer in today's context.
Analysis of the last CAP reforms impact on a diversified farm landscape in a Lowland territory of Wales (UK) : A widening gap between farms?
Introduction:
My 2019 Master’s Degree Thesis focused on the analysis the impact of the last CAP (Common Agricultural Policy) reforms impact on a diversified lowland territory; South Pembrokeshire.
South Pembrokeshire was a good testbed to answer this question as it is a Welsh lowland territory with a very diversified farming industry born from a very diversified landscape, representative of south wales geology and relief.
Research methods:
An Agrarian Diagnosis could be described as a fieldwork based method to analyse a given Agrarian Situation in a small agricultural area. It aggregates the impact of external and local factors to explain individual farms evolutions. The end goal is to reconstruct the changing & functioning archetypical farming landscape (model farms evolving through time)(economy and farming system logic point of view). It is part of a wider method called Comparative Agriculture.
Common Agricultural Evolution Welsh Implementations:
During the last CAP periods Wales gained some devolution. A lot more independence in the local implementation of the policy, being recognized as a country in its own as Scotland by the EU. It was possible to choose the implementation of the First Pillar (Legacy direct payment to support farmer’s income representing roughly 75% of the spending) and of the Second Pillar (Environmentally focused representing roughly 25% ). One can be accessed by every active farmer (over a minimum size) and the other can be accessed by participating into outcomes or action based schemes. Historically the CAP (as were UK Agricultural Policy post World War 2) was linked to production (resulting from a past-need for a much bigger food production). The more you produce the more you get. The legacy has lived and gradually EU countries are transitioning away from this logic in the repartition of subsidies. Some sooner than other. For example Scotland did so later than Wales and both did so later than England.
How did Pembrokeshire's farming reacted to the transition away from production coupled aids:
From the Pembrokeshire's archetype designed from existing farm and their historical evolution, I split 25 archetypes that represent most of the working farms (on Dairy and Beef & Sheep) into 6 groups. The split was done linked to the number of stock on the farm (Number of Dairy Cows or Global Stocking Density for Beef and Sheep (LFU)). I looked at the evolution of farming systems during the period studied, the 1st Pillar payment evolution as well as 2nd Pillar opportunities. I also aggregated economic data (non weighted) on a number of economic parameter to understand farm's classes dependance to subsidies and how it might have influenced their evolution.
The farms that had focused on a bigger and more production intensive system (high yielding, fattening, heavy stocking density) had high 1st Pillar historic payment (all the more per acres) and they lost the more from the reform (from 10 to 30% of their per acreage subsidy). Incidentally the reform relatively benefited to the smaller and less productive farms. Including new comers in farming that didn't have a good historic reference. The redistributive element of the 1st Pillar for the policy (under 54ha the 1st Pillar payment is increased) benefited smaller farms, but it wasn't enough to increase the 1st Pillar payment of those lowland farms. Their acreage remains small compared to upland farms and the whole Wales redistribution of the 1st Pillar enveloppe meant that the extensive uplands gained a lot from it.
Nota: Lowlands farms offer a dense farming network of family farms. Meaning a high number of jobs in farming as well as a relatively small medium farm size.
Lowland farms lost in this First Pillar trade but could they compensate the losses by either relying on their business or the re-developed second pillar of the CAP?
Looking at the income per family worker allows us to compare very different structure of farms and focus on those who are at the heart of the venture. The Added Value shows what is created from the economic activity on the farm. Here the per hectare measure allows us to compare different farming systems with different sizes to compare their level of economic intensity.
Dairy farming system have a positive added value which are high compared to beef and sheep farms, including the most intensive (economic and production wise). This efficient economic farming operation reflects on the dependance on subsidies for the different classes. Dairy farms are the less reliant on subsidies in the farmer's income. Beef and sheep system are heavily reliant on those subsidies to survive and procure an income to their farmers.
There is a gradation in terms of added value/ha, dependance on the subsidies accessible in the income as well as potential 1st pillar subsidy in 2018. Farms with a positive added value reflecting a money inducing economic activity would tend to expend in case some of their income is wiped off. The bigger, the more they lost, the more they needed to increase their economic activity. An increase in the size of the farm either in terms of number of animals managed or in the intensity of the production is a way to cope with it.
For those that don't have an as strong a money inducing economic activity (i-e smaller farms and Beef and Sheep farms) their dependance on subsidies meant that even a small loss could be dramatic.
Second pillar of the CAP in Wales are based on a flat acreage rate across the whole country. Tir-Goval and Glas-Tir were supposed to be outcome based. For lowland farmers that might not have any outstanding fauna, flora (bioms), historic features or will to take land into very constraining production patterns it has little to offer. All the more because payments are well under the added value/ha achievable by farming systems.
In other words: It is possible to make more from the land by farming it and my income doesn't depend even more on subsidies.
Those who moved towards the 2nd Pillar did so on an opportunistic basis; when they add an outstanding element in their holding allowing them to enter the scheme, when the profitability is so low and the intensity of use of the land is compatible with the scheme. In other words; without sacrifice.
In other words: The more land controlled by the farm and the more likely the farm can access the scheme.
The less intensive from the land use production point of view don't have to sacrifice anything to get into the scheme
Nota: Some capital options (track laying, hedge reconstructions) offered a way for more intensive (in terms of economic activity and land use) farms to enter the schemes. But it wasn't supporting the income as such.
On the flipside organic payments (conversion and maintenance) were clearly a good opportunity for income constrained farmers to reach a higher added value as well as higher subsidies payments.
The groups most impacted in terms of revenue where clearly the third group of Beef and Sheep farmers (slightly the intermediate Beef and Sheep Farms) and the smallest dairy farms. For other farms subsidies diminution can't explain the farm evolution patterns because they didn't depend as much on subsidies or they didn't faced a subsidy diminution.
Conclusion: No the CAP wasn't the main driving force for everyone. The subsidy dependent farm where more affected and reacted potentially more strongly.
CAP subsidies are one of the evolution driver for farms, all the more for those who depend the most on it and don't have a highly profitable economic activity. Though the logic described hints at a loss of income for many farms the output vs input price evolution has been more important for many farms. Decision on farm evolution also depends wildly on the farmers profiles (age) all the more for the small and less added value generating farming systems. Farmers with different needs will responded differently to different factors to preserve their income within the farm possible opportunities (markets or subsidy).
Answer to questions from the Twitter conference
How did you manage to differentiate the effects of the CAP reform from other external effects (markets, prices, end of milk quotas ...)? How can we be sure that the increasing gap between the systems that you mention is the result of the reform of the CAP?
1. From the history interviews you are able to know how and when there were inflexion points in the farm trajectory, and possibly why (looking at prices evolution, output types, contract types, type of subsidies claimed...).
2. From the technical and economical interview the reconstruction of today's economic performance allows you to understand the structure of the farm (eco and technical). It gives additional information to understand recent decision making.
3. For the conference I focused on the question I was commissioned to answer in 2019 on the last CAP reforms. But in the thesis itself I go onto other factors. And having the range of archetype (29) makes it much easier to single out a/some factors.
4. For example for dairy farms archetypes in general, the market conditions have been the major driver of change. Looking at the archetypes (linked to the landscape and opportunities) history helps understand why some could whether the changes and other had to change.
'Representative of South wales' is a big statement. How are the interviews feeding into characterisation of the study area and aid there further info on how the study area findings can be generalised?
By representative of South Wales I meant:
1. The bedrock/geomorphology and relief
2. The range of production.
The study area is designed as the area where the community of farmer is operating, the diversity of landscape accessible. It is refined all along the fieldwork through observations and interviews. By having the farm archetypes enshrined with the landscape characterisation/history you can easily scale up and down. You are also able to compare easily with other areas thanks to this fine tuned understanding.
