America’s cheap food policy

As I step out of the door at Knight Frank after a very interesting and fun five years as Chairman of their rural practice, I reflect on a recent farm study tour to the USA. I attended under the auspices of the European Landowner’s Organisation (ELO). In recent years ELO has increasingly provided its contributing members the opportunity to meet fellow organisations and farmer or landowning interests around the world.

We share experience of markets, technology, regulations, climatic changes and all manner of related topics. Breaking bread with like-minded travellers from another continent is cathartic. It reminds one of challenges and opportunities at home and opens one’s eyes to changes in circumstances, some unique and others universal.

My key lesson is the imperative to reflect on public policy and anticipate the drivers for change. No landowner, farmer, representative organisation or professional adviser should close their lived experience to only that familiar one at home.

Two days spent in Washington DC around Capitol Hill is fascinating to truly understand the power of the US agricultural lobby and how Congressmen and women interact. The winds of change around the environment, some say belatedly, are reflected in the Inflation Reduction Act of 2022 (IRA). Possibly this is a misnomer as a key strand of the Biden administration through this landmark bill has been the shift towards cleaner energy.

Discussions with Senators in Congress did not reveal much bipartisan unity on climate change.

Subsidy for US farmers remains opaque through commodity insurance which underpins farm businesses. We learnt of regenerative agriculture in Virginia becoming a new and kinder way of farming. But with only local and niche markets. The mainstream food production in contrast is relentlessly focused on scale and profitability against a consumer market where value and price are everything.

Laid bare in any discussion with US farmers is that the cheap food policy simply will not change. Environmental cost of production will not get baked into price of products. There is no future in an expensive food policy. The environment needs to be dealt with in other ways, if at all.

Flying to Louisiana is as good a way as any for a British farmer to understand the role of world markets and our competitiveness. Vast tracts of fertile land farmed using huge machinery in the Mississippi Basin. Product-sugar, corn, wheat- all being shipped in vast barges downriver past New Orleans and out to global markets.

I met cattle farmers with ranches that required aircraft for travel; cattle numbers on ranches measured in tens of thousands; an oligopoly of only 4 cutting houses buying beef carcasses; sugar cane farmers driving harvesting machinery the size of Challenger 2 tanks; field patterns stretching into the horizon; water and energy in abundant supply it seems, save for some well publicised extremes in places like California.

And so, my “note to self” is to pay careful attention to the land management support offered in Britain with its increasing focus on the environment. We will find it very hard to compete with the USA and other global behemoths of food production such as Brazil and Australia.

Manage costs, take the green pound or at the very least give it serious thought, look for local and niche, not mass markets. Look at land use in a far wider and longer term context. Plant trees. I would say that, of course, as a recently appointed Forestry Commissioner and long standing enthusiast for UK forestry. Above all else have a strategic plan and adapt.

Change is upon us, and we need to wake up to it. What we Brits should always remember, however complex our regulations and the pressures on our land, is that we are very fortunate to live on a temperate island on the edge of the Atlantic, with adequate soils and rainfall for the most part. And of course, with our charming local and regional characteristics and idiosyncrasies. If you want a contrast, go to the middle of the US continent or Southern Spain.

And so, we are lucky to own a bit of British dirt, or to advise on its use and management. I have been fortunate to work with some wonderful clients. And also, with fabulous colleagues at Knight Frank to whom I wish every success. Their growing rural practice goes from strength to strength as they provide the very best-in-class advice in a cheerful and relevant way.