NFU Scotland President – annual conference speech (in full)

Good morning Ladies and Gentlemen, and welcome to our 2022 annual AGM and conference.

This time last year we said that it would be fantastic to get back to some form of normality in the year ahead where we would be planning again for an AGM in Glasgow where we could be back together face to face. Obviously, this didn’t turn out the way we had planned, hence the reason we are conducting our AGM virtually once again. I fully appreciate that as we are now beginning to see more relaxations throughout the country, an in-person AGM could now have happened. However, like many other events that require a lot of preparation and cost commitments well in advance we had to make this decision in early January when we did not know how things were going to pan out, and every bit as important we fully appreciate the nervousness of many with respect to attending large indoor events.

That said we have an absolutely jam-packed AGM again this year, with many of the key topics currently facing agriculture being discussed and more importantly great opportunities for you, our members to question not only what your union is doing for you but also question government and industry leading figures on what their thoughts are about the future ahead.

This past year has flown past in an instant, I simply cannot believe it has been a year since I picked up the reins from Andrew McCornick. My previous four years as a Vice-President went quick enough but this year has taken the biscuit. I do believe that because we are so accessible now online, many more meetings and communications are happening than has happened in the past. This is of course a good thing, however after two pretty much full years of being in front of a screen coming out of one meeting straight into another it does take its toll on you. I can honestly tell you I would far rather jump in the car, have time to digest the outcomes of the previous communication and have time to think for a while whilst in the car about how to maximise our influence going into the next meeting.

I would like to at this point say a massive thank you to my family at home who have also felt the strain as realistically, apart from having the joy of drilling or baling an odd field now and again, I’m practically invisible. Without their tremendous support this job would be impossible.

I have no doubt that the reason time has flown so quickly is because there is so much going on, especially as we really are in unchartered territory. It is always said that at every point in time there are serious challenges facing our industry, and that is true, but right now I certainly cannot remember there being so many outside influences giving huge concern to all our sectors all at the same time.

Input costs are at an all-time high with global decisions having a detrimental impact with the result that in these circumstances our influence is limited. Trade deals have been agreed with large agricultural exporting countries, without as much as a consideration of the UK industry’s concerns on their long-term detrimental impact on our domestic food production. We have a growing loud minority of ill-informed people and organisations hell bent on putting farming down, their short-sighted rhetoric is relentless and I don’t have to tell you how it gets us all down. Climate change is now always part of any discussion to do with Agriculture, and the problems of Brexit are far from over with continuous hurdles with border checks and labour shortages, and as we are effectively now on our own, the lack of a clear steer on how agricultural policy will pan out not just in Scotland but across the UK. More about that later.

Sadly, these are just the headline issues we are facing, there are countless ongoing concerns from issues with slurry storage, land reform, crime, species management, right through to problems with utility companies, access rights, plastics, carbon credits and forestry. It is absolutely endless and highlights just exactly why we exist. To lobby on behalf of all our members to make sure our voice is heard.

So enough about the negativity and the problems we are facing, how are we going to address them? Well, as I said earlier, the major part of our existence is to lobby Governments on both sides of the border, and indeed to a degree still in Europe. Our voice needs to be heard not only because it’s in our best interest but it’s also in the best interest of our consumer and our economy.

Last year after the AGM as the new Board settled in, we set out what our new strategic goals would be to tackle many of the problems I’ve just talked about. These eight strategic goals in no particular order are,

Future support, Rural economy, Optimal land use, Climate change, Public engagement, Effective conservation, Fairer supply chains and Better regulation. These are the eight priorities we decided we will lobby on over the next two years or so. Of course, the landscape can change quickly in agriculture, not only from an on the ground perspective but more importantly from a political one, the recent co-operation agreement with the greens is an example, so these goals may well shift and adapt to current situations. All our commodity committees and working groups are constantly working on the priorities and objectives that sit behind these goals.

So, what does it all mean and why is this so important? Well to maximise our lobbying efforts we need to have the facts and the evidence to give to decision makers so they are well informed of not only the positives of making the right decisions but often more importantly they are aware of the unintended consequences of making wrong decisions. Sadly, despite being given plenty of evidence wrong decisions will still be made, trade deals are a case in point. What we must do at every opportunity is highlight the true value of domestic food production in terms of health, climate change, the environment, and the economy.

So, we need to clearly lay out in front of governments and others why our industry is so important and what needs to be done to not only improve on our own performance but to achieve this whilst still being a profitable industry that reinvests and supports the wider economy. All sectors are facing real challenges right now, the pig sector has had to endure serious losses due to first of all the loss of the Chinese license, then due to labour shortages incurred penalties with pigs going out of spec and to top it all the lack of supermarket support not only by not supporting local but by putting our own high health status at risk by importing loins from areas where African Swine Fever (ASF) is seen as a real problem. On the latter issue we wrote to the UK government to try and impose a ban on imports coming from regions where ASF was present as we felt there was a clear legal route to do so within the context of the trade and co-operation agreement. This was turned down due to the risk not reaching a threshold that would trigger such an action. We remain of the opinion this risk is still serious and continue to lobby for this to be recognised. One bit of good news for the sector is the long-term outlook for Brechin looks to be secured with the take-over from Browns who are great supporters of using local product. Let’s hope this ultimately results in a much-needed increase in price that recognises our high standards.

The Poultry sector is another that has recently been hit hard not just with high feed costs but also a devastating outbreak of Avian Influenza which started earlier this year than ever before. We have had great concerns whereby although assurance inspectors have quite happily conducted their inspections virtually with the full co-operation of the industry, government egg inspectors have continually asked to carry out in person inspections. The poultry sector operates under the highest of biosecurity standards and again we have written to the government to ask that given the current real threat, we should only have an in-person inspection where it is absolutely essential.

Labour shortages continue to be one of our biggest concerns, through our lobbying efforts along with others we did manage to get assurances this year again of 30,000 workers through the seasonal agricultural workers pilot, with an assurance that if this is met there will be the provision to raise that to 40,000. This we know is still not enough, despite there being ample evidence of farmers having already decided not to grow some crop, there is a real reluctance from the Home Office who seem to be burying their heads in the sand, to understand they are undermining their own economy.

Of course, it’s not just about seasonal workers, a full-time workforce is also required, we simply do not have the workforce we require. This is something I raised personally at No.10 with the Prime Minister to which I got the reply we need to pay people more. We know this is absolutely not the case, this is not about cheap labour, in fact looking at agriculture specifically, whether it’s working in the dairy sector or the wider processing industry the level of pay is equal if not exceeds many other sectors. This lack of understanding of the UK government and in particular the home office is incredible. It’s blatantly obvious that any move to retract on immigration policy would be seen as accepting their decision was wrong. I see it completely different, if they want to take back control then deciding to do the right thing for your country is exactly that. We will keep the pressure up on this and I’m sure this will be a topic of conversation with Lord Offord very shortly.

Another element of this which we are working on is trying to raise the profile of the importance of agriculture to try and encourage more people to get involved. We need to up the efforts of our education system both from a school and a college perspective. If it is the case that agriculture holds the key to all three topics which are at the top of the agenda, food production, climate change and the environment, then we need to be talking about this in the national curriculum. We have lost a few years maybe decades in reacting to the importance of succession in family and staff and we now need to address this in partnership with key stake holders. I am pleased to say that we have made some progress on this, however there is still a long way to go. NFU Scotland instigated and chair the Scottish skills for farming group, this group includes membership from all the major stakeholders involved with the land-based sector from industry, education and government agencies. This group is committed to implementing the key recommendations resulting from a series of 15 focus group meetings which we set up. I look forward to seeing tangible outcomes from this process.

I already covered the tree planting issue in detail at our Autumn conference where it was also highlighted by Andrew Connon. That discussion led to a meeting with both Cabinet Secretary Mairi Gougeon and Minister Mairi McAllan where they fully took on board our concerns of the impact planting trees for carbon credits had on not only the loss of our green credentials and ability to produce food but also the detrimental impact it had on the next generation getting a start on the farming ladder. Something that is not talked about enough on this subject is the socio-economic loss driven by depopulation of rural areas by trees. Rural depopulation is something we keep saying we want to avoid, yet policy decisions are driving exactly that. They agreed to look into this further and look at how a proper long-term impact assessment can be carried out to look at the unintended consequences of this practice.  We have consistently said we are not against trees, indeed they can be of huge benefit for many reasons on farm, but they need to be in the right place for the right reasons.

We also need to look further at the comparison between grassland sequestration and forestry, it’s interesting to note the serious carbon loss from forestry due to the recent storms we endured, this is something that should be considered when selling out our green credentials to other industries that fail to address their emissions, it may come back to bite them in the long run.

The red meat sector particularly beef is still highlighted as the biggest emitter due to methane emissions. I have said before that the out-of-date calculation for this needs to be addressed. We need to start using GWP* instead of GWP100. This is something we will push forward at the earliest opportunity. I have already raised this at a European level and will do so again. This is something that all red meat producers across the globe have in common so in terms of picking our battles I believe this is one we can win collaboratively.

There is no two farms or crofts the same in Scotland which is fantastic because that means every farm or croft delivers something different in terms of economic output or biodiversity, but in terms of delivering for the natural environment 85% of Scotland is less favoured area and this is where although it can be a challenging environment to work in, it can deliver massively towards keeping our rural areas alive. Without supporting people working in these areas they would simply disappear. The LFA budget, like all others when it comes to agriculture is one that is absolutely essential to retain. Through our lobbying efforts that has highlighted the fantastic return on investment, we have managed to retain this in full and this year was paid out at 100% of 2018 values. LFASS will change but the budget must remain, the biodiversity benefits of proper grazing management of cattle and sheep on some of our most challenging areas in Scotland must be recognised and focus first of all on activity albeit there will undoubtedly be environmental conditions that will need to be attached.

I’ve mentioned before about the value to our economy our arable farmers bring, whether it’s revenue accrued through the sale of malting barley, the high value crops sold from the fruit and veg sector or indeed the high investment cost that’s spent on the supply chain to be as efficient as possible. This must be recognised especially in terms of soil health as this sector pays a massive amount of attention to nutrient management which in turn maximises not only productivity but also the soil’s ability to store carbon. This highlights the arable sector as one who is already taking a collaborative approach to food production, climate change and the environment and should be rewarded for it. Going forward the agricultural budget should reward positive actions for all sectors, and we have a job to do to highlight why the total spend in agriculture is justified. I have no doubt that our case is rock solid, in fact given the economic return that’s provided from our industry there is a real case for the budget to be increased. In fact, that needs to be the case as returns from the marketplace as yet have not risen enough to counter the increase in input costs.

In terms of embracing technology, the dairy sector is also leading the way, although the milk price has risen this is also a sector that is feeling the pressure from high input costs and labour shortages. The fact is margins still remain tight. After the results of the dairy contract consultation, the UK government working closely with the devolved administrations and stakeholders will now develop a new statutory code of conduct to increase fairness in the supply chain to help farmers to become more competitive. The new legislation around slurry storage also has huge financial implications, which is certainly not only applicable to the dairy sector. We made our views perfectly clear during the consultation which resulted in at least some wins, however the 22 weeks storage requirement is still a massive problem we need to overcome. We will continue to make the case for exemptions where applicable and for much required funding to assist some farmers where they fall foul of this new legislation.

The dairy sector in Scotland is world leading in terms of efficiencies and productivity and we shouldn’t forget that efficiencies have a direct link to emissions reduction. Encouraging efficiencies whether through technology, equipment or animal health and welfare will be vital as we aspire to reduce our emissions. We have always said that the Bew money should be used for this, and we welcomed the news at our autumn conference of the £51m uplift allocated to Scotland for 2021-2022 to be used over the next three years for this. However, the UK spending review last Autumn confirmed a further uplift for the following three years equating to around £77m. This money should also be available to assist farmers and crofters to transition to a low emission industry.

NFU Scotland is still absolutely of the view that farming and crofting is, and will increasingly be a massive part of the solution when it comes to addressing future targets. Obviously the one that is at the top of the agenda is climate change. Our industry has moved leaps and bounds over the past 30 years and although we remain under the spotlight, the positive facts of what we are doing in terms of emissions reduction and positivity towards the environment are now resonating with our consumers, especially since the start of the pandemic and we must continue to raise the profile of what we are already doing in comparison to other countries to keep their increasing support. This will be vital as we certainly cannot rely on some supermarkets to be true to their word in terms of their commitments to local food production. We all know who they are and we will be looking to enhance our shelf watch programme this year to call out all those who try to hoodwink our consumers.

COP 26 in Glasgow was the biggest global event the country has hosted. I will be quite honest with you, my personal feeling was this was going to be a big distraction to what we were needing to be doing on the ground. How wrong I was. After attending a number of events in Glasgow, both in the Blue and Green Zones as well as one in Edinburgh where we talked with the USDA secretary of state for agriculture, I was astounded at how high up the agenda food security was in many other parts of the world. For many that attended from other parts of world where drought was a serious problem, what I was highlighting to them as being a really bad dreich day in Glasgow, many of them would give their right arm for. What we do not appreciate enough here is the fact that generally speaking you can still grow a crop with too much rainfall but you certainly cannot grow anything with too little. What was abundantly clear was the fact that with a growing population the requirement for an increase in food supply globally was vital. The world population right now sits just under 8 billion, the UN estimates that population number will rise to just under 10 billion by 2050. That is a colossal jump in only 28 year’s time.

With climate change having a serious effect on the ability of many countries to produce food, we have a moral obligation given our Temperate Maritime Climate and our ability to produce food sustainably, to produce food not just for ourselves but also for those populations across the globe whose biggest energy requirement is the food they consume. So why is this not already happening? This is the easiest question to answer, there isn’t enough money in it to allow us to meet what will in time be a massive demand, and currently we are facing government decisions that focus more on the negatives of what we are doing, rather than highlighting an industry we should be seriously proud of. Given the fact that COP 27 will be held in Egypt next year I have no doubt that food security will be even higher up the agenda.

The British public are now facing a large hike in energy costs, with inflation set to rise to at least 7% this year. I mentioned earlier about the hike in input costs we are facing, a 200% increase in fertiliser costs is one which will inevitably have massive implications on our productive capacity and in many cases the quality of what we produce. The statistic of being just over 60% self-sufficient in food is nothing to be proud of, that’s a drop from almost 80% 40 years ago. We have the ability to produce much more if required, the argument we heard from UK government officials just before the pandemic struck for saying we don’t need to produce it here we can simply import it from other countries has now been completely blown out of the water.

The pandemic has highlighted exactly why it is more important now than ever that food security as highlighted at COP 26 is equally as important as climate change and the environment. We have said all along that we cannot look at either of these three issues in silos, we must take a collaborative approach to all three.

I can understand the concerns of our consumers with high inflation costs, we too as an industry are facing that problem. However, if agriculture in Scotland and indeed throughout the rest of the UK is put in a position whereby the only way forward is to produce less, then our industry, the wider industries that rely on us, and ultimately the economy will simply impload. And if governments think our consumers are angry at the cost of inflation now, then watch this space, food shortages have always been the biggest cause of civil unrest.

However, we are certainly not there yet, and this brings me on to future agricultural policy for Scotland. As you all know I co-chair the agriculture reform implementation oversight board with the Cabinet Secretary Mairi Gougeon, this was not a decision NFU Scotland took lightly but we knew that if we want to have influence on how to steer a future policy that’s fit for Scotland then we need to be in the mix.

Yes, we still have some serious problems related to Brexit right now, but we also have a fantastic opportunity to create a future policy and support structure that focuses on the positives of what we are providing. However, we also have to be mindful that we have an internal market act and a subsidy control bill that may limit to a degree what we need to do to fit Scotland’s needs. That said we are still of the belief that the direction of travel set out by our series of steps to change documents are even more relevant now than ever before. Focusing on active agriculture is absolutely vital if we are to keep the critical mass that underpins the wider economy that relies on farming and crofting. This is also about people, all too often I sit on panels and forums where I’m often the only one who will be affected by decisions made by others who regardless of the unintended consequences the decision will not affect them or their families. This is exactly why the ARIOB is so important, the fact there is a well-balanced group of people sitting on this board means that the industry’s voice is being heard. The alternative could easily be going down an Environmental Land Management Scheme route, a scheme adopted south of the border, an option which I have already described as a car crash, especially now that every economic analysis that has been carried out highlights serious concerns for the viability of agriculture.

There is still a lot of work for the ARIOB to oversee and implement but I am confident the Cabinet Secretary will announce tomorrow some of the progress that has been made and allude to future developments that will be in our interest in the near future.

Ladies and Gentlemen, before I finish, I would like to conclude by saying a massive thank you to all the staff at NFU Scotland, they have all worked tirelessly throughout the year to deliver the maximum benefit to our members under some pretty challenging circumstances. With our growing membership and careful management and scrutiny of our finances we have also now been able to grow that staff body this year to further return value for money to our members. I would also like to thank my two vice presidents Andrew and Robin for their support throughout the year and indeed to all the Board members who take on board great responsibility for their regions and commodities.

Thank you.

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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