There’s been an awful lot of media attention focussed on the idea that the Government’s Trade Deal with Australia will lead to the UK being swamped with sub standard Australian Beef, pushing plucky British Beef farmers out of business. I’m afraid that there is more than a touch of the old colonial attitudes coming through in some of the commentary I’ve seen, plus a large dollop of British exceptionalism.
I have to start by declaring an interest. I’m half Australian and my mum grew up on a New South Wales dairy farm (milking the cows before going to school in the morning). That farm now produces Beef cattle by my uncle Ben. And my other (late) uncle Ted was also in Beef, as are some of my cousins (though more as a hobby than a business). I have been to the farm several times. It’s a pretty low key way of farming, at the very extensive range of the spectrum, though not officially organic. My mum was telling me the other day that my uncle buys calves, grows them on (on grass) and finishes them on grass plus some supplements (molasses was mentioned).
Beef is a huge industry in Australia, but also extremely varied. There has been a focus on the intensive feedlot system, where store cattle are finished in massive yards, fed on grains to reach the right weight (and conformity) before being slaughtered. About a million cattle are finished in feedlots in Australia, out of a total cattle population of around 20 million (though that includes breeding cows, heifers/bullocks and calves). So it’s not a massive part of the total system. But of course everyone focusses on that.
Also, some producers use growth hormones to speed up production – this has been banned in Europe for a very long time, though is common practice in the USA and other countries. A very long running trade dispute between the EU and the USA eventually saw the World Trade Organisation agree with the USA that the blanket ban on US Beef exports into the EU as illegal and now the US exports hormone-free Beef into the EU (and UK.) Interestingly China – Australia’s biggest export market for Beef (until last year) bans imports of hormone-fed Beef so Australia already operates a twin track producing hormone-free and hormone-grown Beef. Beef is a massive export industry in Australia – exports peaked at 1.23MT in 2019, falling back to 1.04MT in 2020. Most of this goes to Japan, the US, China and South Korea. A tiny 8500T went to the whole EU last year, though that was down on 2019’s 14000 Tonnes.
What I haven’t seen anywhere is the flip side of the story. In 2016, 27M ha of Australian farmland was either registered Organic or in conversion 7% of the total. Almost a third of all Beef producers were involved in the Organic Beef sector in some way. 65% of Australian consumers said they bought organic produce in 2019, with a market value of $Aus 2.6Bn a year (it was £2.8Bn in the UK in 2020). Organic Beef is one of the most sought after purchases, with nearly £A200M (£109M at current prices) sold in 2019. Australian organic Beef and Veal was also the most exported organic food product – worth $A350M (£191M) and “particular popularity in the US where the Australian reputation for high quality and supply chain transparency is prized.” Now it should also be said that the organic certification sector in Aus is clearly in a bit of a mess, but I don’t think there’s any question that the exported Beef is properly organic.
I have a fair bit of experience exploring the UK Beef industry, in particular its environmental impact – from 35 years working in nature conservation across the UK. I don’t think we have any right to criticise Australia for the environmental impact of their Beef industry. Most Beef in the UK is grown on a single species of grass – Perennial rye-grass. If you’re lucky there might be a bit of white clover in there too, but nothing else. The animals which are grown on grass during their first couple of years life, are then finished on a mix of silage, maize and grain – similar to Australia. The difference is that they aren’t housed in enormous feedlots – though feedlots are here . That grain and maize is grown on arable land across the UK. That’s millions of hectares of arable farmland, growing grain and maize to feed cows (most of the rest of the arable harvest that isn’t good enough for flour, goes to pigs and chickens.)
There is a movement, by organisations such as Pasture for Life, to increase the proportion of grass fed to cows here, and even to finish them on grass (and even other flowers!), with no grains. This has been going on in Australia for a long time. But both the grass-fed and organic Beef markets are tiny in the UK – in 2019 organic meat had a 1.5% market share in the UK. It’s actually pretty difficult to find out how big the UK organic Beef sector is, which I find surprising. If anyone can help me with some figures (without paying £100 for a Soil Association report) I’ll gladly put them in here. It’s clear that demand for organic Beef increased substantially during lockdown last year, but from what to what? I suspect it’s still a small segment of the overall market and certainly smaller than the Australian organic (and grass-fed) Beef sector.
update: figures released by Defra on 27th May reveal 2.8% of the total farmed area is organic – about a third as much as in Australia. Also 2.8% of the UK cattle population is reared organically – that’s 274000 animals. 80,000 organic beef animals were slaughtered for meat in 2020 out of 2.04M. that’s 4% of the total. Total consumer spend on Beef and Veal in the UK was £2.3Bn in 2019, with 75% of that coming from the UK – so the UK portion is worth £1.725Bn. 4% of that is £69M. Obviously organic beef is more expensive than conventional beef, so it may be worth £100M on the shelves (this assumes that no UK grown organic beef is exported). This compares with a £300M Australian Organic Beef retail value (domestic consumption and exports).
But anyway a section of the media has leapt on this vaunted Trade Deal to paint the Australian Beef sector as cheap and nasty and looking to undercut UK Beef producers and push them out of business. The NFU has also waded in waving the flag for UK Beef (perhaps no coincidence as President Minette Batters has a pretty extensive Beef farm).
Projections that as much as 2% of total UK Beef consumption could be provided by Australian imports, have led to much wailing and gnashing of teeth and evidence of a further nail in the coffin of the UK farming sector.
I think there are bigger factors already here that are driving multiple nails into that coffin. Firstly of course leaving the EU means that we have left the Common Agricultural Policy. This means that the money (£3.2Bn a year) funnelled to farmers via the EU is coming to an end. It is going to be partly replaced by Public Money for Public Goods – paying farmers for things the market does not pay for – and this may include support for the organic sector. But what’s clear is that there will be less money available for farmers in the way of public funding support. It should be noted at this point that the Australian Beef industry gets no subsidies (though it does get generous tax breaks just as the UK Beef industry does).
It seems unlikely, to say the least, that the Treasury will stump up £3Bn a year from the UK’s own resources, after the final payments linked to the old EU system stop in 2027. Less money in the sector, without it being replaced by any other source of income, means farmers will go out of business. That’s economics 101. The Beef sector of UK farming has been dependent on subsidies to continue for many years. Last year was a bit exceptional because of the weather (more on that in a bit), but as this graph shows, livestock farming income was substantially negative both in the lowlands and the uplands, with basic payments and agri-environment schemes keeping these farms going. They’d have been more profitable if they had no animals. While we would all love to see the basic payments and AE scheme payments replaced in entirety with Public Money for Public Goods payments, this seems unlikely at the moment.
The second point is that, having left the EU under almost the hardest Brexit imaginable (one stop short of a no-deal Brexit), the Government has terminally damaged the UK agricultural export trade. By refusing to sign up to the EU’s SPS rules, it is now much harder for UK farmers to export their Beef to the EU (down 75% compared with pre-Brexit trade). And it will remain so, until we do sign up to the SPS rules, which won’t happen.
The idea that the UK Australia Trade deal is some sort of stalking horse for the UK joining the Trans Pacific Trade Partnership, which would then replace our EU exports, is laughable – although joining the CPTPP could lead to other problems. Are the Australians really going to do anything which might threaten their enormous Beef Trade with other CPTPP partners? Of course not.
Another nail in that coffin is the climate. As well as our climate becoming more volatile, which always causes problems for farmers, we need to take drastic urgent action to mitigate the unimaginable climate chaos which is coming down the road towards us – and of course towards Australia. Arguably it’s already arrived in Australia. Taking drastic action could well mean eating less red meat – and dietary shifts are already happening. The market for Beef is going to shrink and with that there will be fewer Beef farmers. Methane from ruminants is a complicated story, and I’m not going to go into the detail of that here, but there will be a push to reduce Methane from Cattle, not least because it can have a rapid beneficial effect on the speed of climate change. Plus of course where are all these new trees going to be planted? Likely a lot of them will end up on pastures formerly grazed by Cattle.
So that projected 2% share of the UK Beef market in 15 years time seems smaller than the margin of error on all of the above factors – and assumes the Australian Beef industry hasn’t already rapidly contracted in the face of their own climate disasters.
I think the main reason why it’s become such a big story is because the NFU are very good at using the media to push their own particular (bucolic) view of UK farming and its importance to the country. The other reason is that the Government is now desperate to find anything which might conceivably be spun as a benefit of Brexit, as Chris Grey wrote, on “The desperate search for Brexit benefits” so eloquently, last Friday.
When the dust has settled, we will see that the UK Australia Trade Deal and the phantom Beef Menace, was just another of these Brexit fantasies, given a bit of a push by the NFU.
Although what it does illustrate is that the Johnson Government will happily throw any industry under a bus, in pursuit of these fantasies – and that applies as much to our Arts and Creative Industries, or our Financial Sector, as it does to Agriculture.