Speech for the Jersey Farming Conference 202, by the president of the Jersey Farmers Union , Peter Le Maistre
‘To my knowledge this is one of the only times that the president of the Jersey Farmers’ Union has spoken at the Farming Conference. In recent years, delegates to the Conference, especially farmers have been keen to understand the exciting developments that are taking place in areas such as cattle breeding, carbon reduction, cleaner water, gene editing and robotics.
And although that is all new and exciting and in the future, what about today? Are the industry members sitting here today giving this conference their undivided attention or do they have a mind on how will they survive next year?
The 17th Century is regarded as the moment that Jersey moved from a primarily land-based self-sufficiency to a cash based mixed economy of cider production, manufacture and commerce.
Why 2022? There are people in this room older than me who have seen threats posed by rising costs, but never of the scale we see before us today.
Rise in costs from Jan 2021 to Jan 2022
If I can park the labour rise to one side for a minute, and deal with the rest of the rises, the politicians in the room can relax because none of those are their fault.
The fertiliser rise is the one that most of you probably know something about. Not because the high gas price closed the CF Fertiliser plant in the UK, which could have crippled the entire British growing industry, but because the by-product of fertiliser production is CO2 and suddenly the British public and the British government realised that CO2 is essential in a myriad of processes from food processing to fizzy drinks to storing vaccines.
Is it just me, or is it slightly ironic that as the great and the good gathered in Glasgow to reduce CO2 emissions, we are crippled as a country when we don’t produce them!
Fuel prices have gone up dramatically in 12 months. The price of oil was $53, today it’s $83.
Although you may think January 2020 was Covid influenced, the price a year earlier was only $57 so a real rise and a big rise.
Plastics are oil based and so the rise is not surprising. Chemicals is an educated guess. Local merchants are not able to quote for all chemicals at the moment. Although Jersey uses little in the way of chemicals, in the autumn in the UK cereals are being drilled now, and the worry is: a shortage of chemicals. Presumably, in a supply chain shortage, the most profitable chemical will be produced first.
Freight prices at the moment are volatile. Locally, we seem OK but the shortage of HGV drivers in UK has been well publicised. Although the volume of the Jersey Royal will give it some clout in the market place as we ourselves found this summer, no one was willing to take small loads at even a reasonable price.
The cost of repairs and renewals is definitely up at least 15%, wood and steel and labour are all up but once again supply can be as much an issue as cost.
How do we address these rising costs and survive? There are three parties involved:
The Market/Consumers; the Grower /Farmer; and the Government.
Taking these in order:
The Market: if Jersey’s minimum wage was the only factor at play my belief is that the supermarket view would be the same as the last five years – no price rise, grow them cheaper, reduce costs. As this is a UK/EU problem, I believe that something will have to give. Many UK growers are struggling already with staff shortages and so 2021 has been a difficult year; they will struggle to survive that and these rises. Secondly, EU growers are also experiencing these cost increases so will also put pressure on. I think it is likely that food prices will rise, how much by, and how much the producer will get, is still unknown. It has to be recognised that some price contracts are not on an annual basis so they may be difficult to renegotiate.
The consumer is another important factor. especially locally. Since the pandemic began, it has become apparent that the local public have begun a reconnection with the countryside and the value you get from it. I believe the public have begun to appreciate the importance of local food, particularly when there are bare shelves in the supermarket. I believe that it is easier for them to understand and accept rises in food prices now than it was two years ago.
What we can we do as Growers?
I know it may sound defeatist – but not very much. The farmers and growers of this Island have been reducing costs for the last ten years. Margins have been tight, food inflation in the way of returns to growers has been negligible so growers have been reducing costs to survive. At the same time, initiatives such as the Action for Cleaner Water group and the membership of LEAF have meant less fertiliser, less chemicals have been used, to the point where a reduction would lead to lower yield.
Through LEAF, growers monitor fuel use, so again only small reductions may be possible. It is possible to reduce plastic use still further by small reductions in area and more use of the plastic twice, but it is important that we keep our early advantage in the market and that we keep our continuity.
We can increase the replacement timing of our tractors and machinery to save some money, but this has to be carefully considered against the rising cost of repairs. The only other area where savings can be made is in rents, but with three- or five-year leases only small reductions can be made immediately.
Finally, the Government, what can they do?
Let’s start with the problem
Minimum wage up 11% to £9.22
Holiday entitlement up 50%
Cost to employ new person
Work permits £115
Social security card £80
UK Visa (9 months) £244
These last three cost someone £11 a week, employer or employee. At the moment, as you all know, it’s an employee’s market. Can’t Government reduce some of these costs? Why, if the same employee returns after his three months enforced absence, could we not have a reduced permit fee? Why, if they pay Social Security, don’t they get cover from day 1? These are not medical tourists; they are here to work. At the moment the staff and grower have to have medical insurance, for those who come from outside Europe – there is another cost.
We are trying at the moment to persuade the Minister for Social Security to help us mitigate the scale of the rise in a number of ways. First, to reinstate the offset allowed at a rate commensurate with the percentage rise. Secondly, to consider reducing the Employers contributions to help the industry through this difficult period. The Employment Forum and I believe the Minister and other politicians realise that our industry is a problem when it comes to a minimum wage. Many politicians rightly wish to see that the poorest in society get a decent wage rate, they wish to see that many more people don’t have to rely on Income Support. And yet apart from last year (Covid no rise) the minimum wage has gone up above cost of living again and again and yet the situation does not improve.
Why is that? Well, firstly the finance industry in the Island, with its high salaries, distorts the average earnings figures and secondly, the rents in the Island continue to rise. This is where farming does not fit in. The vast majority of our staff are in our accommodation. The vast majority of our staff have the opportunity to work more than 40 hours a week, so the disposable income of our staff is such that they are on a good living weekly wage already.
While we’re on the subject of increased costs, do States Members realise that the 11% rise headline rise is nearer 13% when you bolt on the extras. By extras, I mean 50% extra holiday pay and the rest breaks increase. We understand that a wrongly pushed button has cost all small businesses another five minutes of cost. What’s five minutes? Well, traditionally in our industry everyone has a 15-minute paid break sometime during the morning. It might be OK in an office, but if you’re doing hard physical work, you need a break. Now five minutes extra seems like nothing until you multiply by six days – now it’s half an hour. On a typical 50-hour week it’s another 1% cost to our businesses. If a simple bloke like me can work this out, Government can see that the total wage rise is nearly 14%.
So, if all else fails who can save our industry?
If you are like me, we’re taken by surprise by Covid19.
I was even more surprised to find that Jeremy Clarkson now speaks for the British farming industry and is being listened to. Someone said recently that he had done more for British agriculture in the last two years than Countryfile has in the last 30.
Why? Well, he bought a farm, thought he could run it himself because he said at the time “How difficult can it be? You buy a tractor, a couple of machines, some fertiliser, some seed. Get the field ready, sow the seeds, they grow. You harvest, you get a big cheque then you wait for next year.” Why Jeremy is important, is because that’s what the vast majority of the British public think. Or they did until they watched his programme.
He suggests that we reject the “Public Money for Public Good” mantra and replace it with “public money for public security”. As he puts it, using his best Anglo Saxon English “If the shit hits the fan for whatever reason, we can still feed ourselves.”
With nearly eight billion people on this planet and an ability to probably only feed half those sustainably, it is something we should take seriously. He is suggesting we have more investment in technology sooner.
I am pleased to say that with some Government support the JFU has signed an agreement with Lincoln and Cambridge Universities to design a robotic system for planting potatoes. A local indoor producer is hoping to have a basic robot to pick tomatoes on trial next year. Jeremy suggests we need robot tractors to kill weeds by electric shock rather than chemicals.
So, I say again, this is why the fund for the local productivity scheme must be increased. It was pathetic that the last tranche of Productivity money was
not for any business over 20 people and not available to businesses already receiving States support.
In other words, it is not available to growers. We seem to be frozen out of everything. Look at Covid, every other industry received help. Hell, there were Lawyers and Accountants being supported but not growers. We were considered essential and battled on but the costs were enormous.
So, will our industry boom? Well perhaps not, but there are some encouraging signs out there.
First, as I mentioned earlier, it is inconceivable that prices won’t rise at all. Let us hope that the marketing companies or growers take this opportunity to reset prices to levels that we can all live with. Already prices of winter veg are rising, so perhaps the message is getting across to the multiple buyers. At the same time our Minister must be making every effort to ensure that the ferry service is totally reliable so that service levels from Jersey are seen as first class, which was not always the case this year.
Secondly at this period in time when climate change is the dominant issue as an industry, we can provide some of the solutions. Your crops, your permanent grass, your hedges, your trees all have a cash value in carbon sequestration. The UK has got its first on-line natural capital trading platform. We must not be left behind. One or two growers are already looking at options to take this forward and I believe the JFU has a role to play in making this happen.
Thirdly, our dairy industry. I was kindly invited to a conference specifically to do with the use of the Jersey cow in Africa. Starting from a small trial in Rwanda some years ago, the success has meant it has been rolled out to other African countries such as Ethiopia and Malawi. I took note of two important messages from the conference: the Jersey cow, from all the data produced, is the most efficient when it comes to milk per kilogram of food, so when it comes to carbon footprint it is also the best in that area.
Also, the effect of the introduction of our Jersey cow is life changing. The animal is literally a cash cow, over its lifetime it provides milk, manure, meat, leather, hoof and horn, nothing is wasted. The increased incomes mean better health and education for the young on that continent. What a fantastic message that is!
And here in Jersey, the export of milk products continues to be a success. Here at home, at a time when shelves are sometimes empty, the Jersey Dairy provides a guaranteed supply of milk and other dairy products all year round. Our fruit and vegetables, not forgetting the egg sector, provide a similar service all year round which, I believe as an Island, we can’t afford to lose.
I hope that this has given you, the audience a picture of where our industry stands at the moment. One cannot pretend that it is not going to be a challenging 12 months, but I know that you, the Island’s farmers and growers, with their drive and the passion that they have for our industry, will give it everything to make it a success in 2022. I hope that our politicians will give us real support where necessary, starting with a reduction with employers Social Security contributions to counteract the increased cost of employment.’