The Future of the Rural Economy 20th Jun 2009

The Future of the Rural Economy

This article was written for the latest edition of the Lycetts news letter by Clive Aslet - editor at large of Country Life - and struck me as a fine and concise overview of the rural economy.

"When I was editor of Country Life , I often told myself - and was indeed told by others - that I had the best job in the world . But the outlook from the editorial chair (Hepplewhite , of course) was not always rosy . Far from it .

The years of my tenure , 1993-2006 , coincided with a kind of rural apocalypse , BSE , foot and mouth , poverty , lack of affordable homes , swine fever , avian flu , high fuel prices , closing services , the Hunting Act , and an unsympathetic Labour government stalked the land . " Everyone that goeth by Babylon shall be astonished , and hiss at all her plagues " cried the prohpet Jeremiah , in similar circumstances . The one bright spot was the money gushing out of the City of London . Via corporate shoots , country house restorations and farmers markets , some of it found its way into the rural economy .What were termed life-style buyers bought hobby farms .

After I stopped being editor - and I would like to state that I see no causal link - circumstances improved . Wheat prices more than doubled ; so did the price of farmland . At the beginning of 2008 , the prospects looked positively sunny . Tractor dealerships couldn't  keep up with the demand for new machinery . "Earth's increase , foison plenty , Barns and garners never empty" were the order of the day . Despite atrocious weather , the autumn brought a record harvest , if expensive to dry . By the end of the year , though , credit crunch and recession were bearing down as mercilessly on country people as on anyone else . Really it should be rural Britain's turn to hiss . While previous woes had a specifically rural dimension , as city people sometimes liked to point out , that can hardly be said now , you feel it at every dinner party in London . Those City high fliers who once "trusted to have equalled the Most High" , have now , like Satan at the beginning of Paradise Lost , been cast down , their eyes rolling around scenes of  "huge affliction and dismay" . Which is bad for them , but not much better for everyone else . After a decade during which farmers were urged to anything other than farm , the fruits of diversification are beginning to taste sour . The farmyards that were converted to office suites go unlet . The country-house hotels , designed to pamper stressed -out executives , have been deserted . The speciality bacon smokers and premium cheese makers have lost their markets . Farmers who converted to organic production , because that is what the Notting Hill shopper semed to want , now find that Notting Hill has scaled back to Tesco "finest" and Sainsbury "taste the difference" , if not Aldi "specially selected" .

Even so , the hissing is muted . Why? It is difficult to generalise , because the country is full of all sorts of people , some of whom are double-died followers of traditional occupations and pursuits , whereas others commute to work and regard their surroundings as a large garden . But on the whole it is a more stable community , perhaps less up to the minute but equally feverish in its following of news . At a time when the news about the financial markets is mostly bad , that is a plus .

Animals dictate the rythm of the countryside : cattle have to be fed , dogs and horses exercised , whatever the state of the economy . And if you are hunting , you can't afford to think of much else , or disaster beckons .

Not having flown so near the sun in the boom years , country folk haven't had so far to fall . They've faced so many disasters since BSE that this one hasn't struck them as quite such a thunderbolt . Besides they've generally been more cautious about debt . Certainly they are apt to have a different view about house prices . For years , they have seen the most attractive houses being snaffled by London buyers who then occupy them for school holidays and half terms . Now that the housing bubble has burst , local families have a chance of affording them . Estate agents expect a lot of second homes to be sold in 2009 . And while the price of houses is falling  , that of farmland remains fairly robust . Amazingly , bare land sells better than the previous darling of the market - a pretty farm with an appealing house on it . Indeed , at a time when other sectors of the economy are white with anxiety , agriculture - and that section of the rural community that depends on them - is unobtrusively chipper . The exchange rate has something to do with it .

With CAP payments calculated in euros , farm accounts are about to receive a windfall . At the same time , rural tourism will benefit from the greater number of people wanting to holiday at home . These short-term benefits , however , are merely gilding the turnip . Ever since the days of Genesis , agriculture has operated to a cycle , and just now the lean years are giving way to the fat ones . Even - strange for a Labour minister - Hilary Benn appeared sentient of this at the Oxford Farming Conference in January . He acknowledged food security , and said he wants Britain to produce as much food as possible . How this was compatible with , for example , proposed envoironmental measures which some farmers regard as a return of set-aside , he did not say . But it was the kind of endorsement that , five years ago  , farmers could only have dreamt of . An OECD report launched at the same conference predicted that , although prices have eased in 2009 , cereals , rice and oilseeds would fetch between 10 % and 15 % more than in the past decade . It seems a conservative estimate .

The sun does not , as yet , shine on everyone . Pig farmers have suffered over the past year ; after years of contraction , a further 10% of them left the industry in 2008 . On the other hand , shortage of supply means that the price of pork is rising . Dairy farmers in nitrate vunerable zones are having to spend upwards of £20,000 on new slurry pits , at a time when bovine TB , spread by the legions of badgers whom Mr. Benn refuses to cull , makes ever further advances . Around the coast there is anger at the threatened abandonment of of sea defences - thought in part to be a gesture towards the fashionable idea that rural Britain , nearly all of which has been tended by mankind for centuries , would be somehow more exciting if returned to a wild state , its estuaries flooded and its mountains stalked by bears and wolves .

Globally , the worldwide recession has eased commodity prices . Last  year's record cereal prices were driven by demand from the tiger economies of India , China and South-East Asia . As their people got richer , they wanted to eat a more western diet . For the time being , that pressure is off prices ; in time it will start again - accompanied by climate change , which will turn some productive parts of the planet into desert . Farmers will not only be expected to produce more food , but also , as fossil fuels are phased out , all those things we get from them : not just fuel itself , but plastics , textiles and medicines . At the same time , though , they will be required to reduce their own greenhouse gas emissions . At present agriculture accounts for seven per cent of UK emissions total . Expect verbal warfare to break out between the advocates of GM , devising plants capable of fixing their own nitrogen , and the Soil Association , with its belief in the carbon capturing properties of healthy soil . Whatever the result  , the countryside will take centre stage ."

Clive Aslet is Editor at Large of Country Life