Energy - time for some tough decisions

NFU Scotland President, Martin Kennedy, says it’s time for some tough decisions to be made to resolve out of control energy crisis.

Everyone across all sectors of agriculture and indeed all types of industry are waiting with bated breath on governments to make a decision on what to do about the current out of control energy crisis. The sad reality is they don’t know what to do or it would have been done by now.

The long-awaited replacement for Boris Johnson will soon be known and it’s been made perfectly clear that no decision will be made until either Rishi Sunak or Liz Truss are in place. I’m not sure even then if decisions made will make a massive difference as all too often the big energy companies will do what’s in the best interest of their shareholders which will not likely be in our best interest.

This whole problem which has been exacerbated by the terrible situation in Ukraine, has brought home the reality of mistakes having been made not just in the last few years, but probably up to about 30 years ago. Over the last 30 years we have completely disrespected our own high-quality manufacturing in favour of cheaper imports which hasn’t only put some of our world leading industries out of business, it has also benefitted other countries’ economies at the expense of our own. If we’re not careful and we don’t act immediate, I fear we will be too late to rectify this mess, and we will also completely undermine our ability to produce food.

So why has this happened? Well part of the reason is we have inexperienced political leaders who study politics and then think they can run the country, from what I’m seeing, many of them couldn’t even run a bath. In business, decisions are made on a constant basis not just for the short-term but for the long-term benefit of the business. Our combined four Nations should be run like any other business, first and foremost for profit which delivers prosperity and growth and secondly making sure we are protected from outside threats by being as self-sufficient as possible. My father always said the most efficient farms had more lorries going down the farm road full and up the road empty, not the other way round. This is exactly where we’ve gone wrong in the U.K., we have been bringing in products of all sorts for all kinds of reasons because it’s been seen as cheap, seriously short sighted.

There are countless examples of this and it’s not all about food, albeit food imports which undermine our own food production must be one of our biggest threats which looks like getting worse given the trade deals we’ve just signed up. The reality is we do this all the time, as a country we don’t look far enough ahead. The Queensferry crossing, a fantastic bit of construction made with Chinese steel yet we watch our own steel industry flounder.

Things need to change but it won’t be overnight, regardless of how much people shout there will be considerably more pain felt before we’re through this. However, moaning about it won’t bring change, solutions bring change and that’s what we should come up with.

First and foremost, governments need to stand up and make decisions.  Sometimes these decisions might not be perfect but it’s better to make a decision and if it’s not perfect alter or adapt to make it better.  That’s what you must do in business, and that’s how you learn, sometimes by mistakes. That’s far better than going round and round in circles passing the buck from one person or committee to another and nothing actually happening, some people call that modern politics.

If we were to run farm businesses the way our politicians run the country, we wouldn’t be in business for very long, sadly because of the political decisions being made which are out with our control, that now has serious implications on the viability of our businesses.

Here are the key asks we should focus on to turn this around;

1. Maximise at every opportunity our ability to produce our own power and energy whether renewable or not, almost regardless of cost as right now this will be much more economical in the long run.

2. Build, reinstate or take over fertiliser plants to become as near self-sufficient in fertiliser as possible to maximise food security.

3. Stop allowing energy companies to export for profit whilst we still have a shortage here, this could be a short-term measure, 3 to 5 years until more home produced power is available and would be more accepting than forcing a windfall tax.

4. Start to look at developing a carbon border adjustment mechanism (CBAM) similar to what the EU is looking at to create a level playing field when it comes to trade.

5. Longer term, when it comes to being eligible to stand for election, there should be some credible evidence that shows a degree of business acumen. After all running a country should be the biggest business in town.

The first two will be costly but again looking at it from a business point of view this is about investing in the country for the long-term benefit of us all, so as any business would do you look to restructure the payback of that investment over a period of time. The third one will require legislative change. The fourth would require a more in depth look at the many variables involved and the last one will require a mindset change through all governments to accept where there has been failings in the past.

Author: Martin Kennedy

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About The Author

Martin Kennedy

Martin is a tenant farmer in Aberfeldy, Highland Perthshire and farms with his wife Jane and three daughters. They have 600 ewes and 60 cows on the farm rising from 800ft to 2,500ft. Martin served two years as Highland Perthshire Branch chair, before representing East Central region on the LFA committee in 2009. Martin went on to be Vice-Chair before chairing the committee for three years. He was elected Vice-President in 2017 and elected as President in 2021.

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