Orkney Constituency MSP Liam McArthur, LibDem has said that the farming and fishing sectors require urgent government support due to rising costs. Fuel, feed and fertiliser costs are threatening “the very viability of many farms” commented Liam McArthur.

Seeking assurances from the Scottish Government in providing support Liam McArthur said:

“While many are feeling the pinch at the pumps and in our pockets, there is an acute impact on those sectors where fuel is among their biggest costs.

“This is particularly true for our farmers and fishing fleet where input costs have risen exponentially over recent weeks.

“Boats are being forced to tie-up and even leave the industry entirely while greater fuel, feed and fertiliser costs are threatening serious long-term implications to production and overall viability for many farm businesses.

“The Cabinet Secretary recently established a Food Security and Supply Task Force and I welcome her confirmation that the group’s recommendations will be published shortly.  Ministers will then need to act on those recommendations with genuine urgency.

“Ms Gougeon is right to be pursuing options on a four-nation basis as well.  Again though, the urgency to of the current situation needs to be recognised by governments across the UK of food security is to be maintained.”

The Food Security and Supply Taskforce

The Scottish Government has set up the Food Security and Supply Taskforce which works jointly with the industry.  The taskforce includes key food and drink industry leaders.

Commenting on the establishment of the task force, Mairi Gougeon, Scottish Government Cabinet Secretary for Rural Affairs and Islands, said:

“Over the last two years, our food and drink sectors have experienced a series of shocks in terms of disrupted supply chains and new barriers to trade through COVID and Brexit.  It is clear that the unfolding tragedy in Ukraine will have further impacts – not least through the hugely challenging increases in energy bills which affect households and everyone in the food industry, from farmers to hauliers, processors to retailers.”

The task force is co chaired by Chief Executive of Scotland Food & Drink, James Withers. He said:

“The establishment of this taskforce is a welcome and an important step.  The immediate focus from the war in Ukraine is on the humanitarian fallout.  However, it is also critical that we assess urgently the potential impact of the conflict on national food security and supply. From wheat and barley to sunflower oil, Ukraine and the surrounding region is a major player in terms of global food supply and agricultural production.

“Immediate supplies of food and animal feed are secure, even if prices are rising sharply. However, whilst much still remains unknown in terms of the impact of the war on global supply chains, there is clearly a shock to the system coming.  We must understand its implications for Scotland’s farmers, food manufacturers and consumers and consider any short or medium-term action we can take to mitigate their impact.”

Leaving the EU has had a massive effect on the distribution and supply chain for Scotland’s food producers with long delays being experienced at ports like Dover adding to costs. Long wait times at Dover crossing costing transport companies ‘£800 per lorry’

Farming and Fishing in Scotland

The Marine Fund Scotland (MFS) has provided fishing businesses and marine organisations in coastal communities with £7.4 million in the latest round of funding. Funding for Orkney’s Fishing Businesses

The Scottish Farm Business Income Estimates 2020-2021 reports that “Average farm income has risen to the second highest level since 2012, after adjusting for inflation. The average farm income, a measure of farm profit after costs, is estimated to be £39,300 in 2020-21. This is an increase of over £10,000 on the previous year.”

The statistics are based on a survey of 400 farms. Most of Scotland’s farming land is in what is known as Less Favoured Areas.

On average, LFA cattle farm income was £23,000 in 2020-21. This is just above the five year average, following two years of low income. LFA combined cattle and sheep farms had an average income of £28,800 – an increase on the previous year, but remaining below average.

Increased output was not enough to offset increased costs for LFA sheep farms. They had the lowest average income by farm type in 2020-21 at £9,600.

Support payments are a key source of revenue for a large number of LFA farms. Current support payments are intended to allow farms to remain in business and be an active part of their local community.

Scotland’s Energy

In 2021 Scotland’s generation of renewable energy, which comes mostly from wind, decreased by 15.1% from 2020 figures. Scotland is a net exporter of electricity.

Despite the decrease in generation the estimated wholesale market value of electricity exports, tripled.

The estimated wholesale market value of the electricity exported by Scotland was £2.4billion.

Although Scotland is an exporter of generated electricity, it buys back its own power at a higher price than England. Scotland is also an oil producing nation but the revenues for that industry go straight to the UK Exchequer.

The average annual price of Brent crude oil climbed to 100.3 U.S. dollars per barrel as of March 2022. This is nearly 30 U.S. dollars higher than the annual average in 2021 and comes in the wake of an energy supply shortage that began gripping Europe in late 2021, as well as concerns over oil supply bottlenecks following the Russia-Ukraine war. Brent is the world’s leading price benchmark for Atlantic basin crude oils. Crude oil is one of the most closely observed commodity prices as it influences costs across all stages of the production process and consequently alters the price of consumer goods as well.

Statista

Mairi Gougeon wrote to the UK Secretary of State for Environment, Food and Rural Affairs, George Eustice, on 4th April requesting an urgent four-nation summit on the impact of fuel prices. He agreed to that request during a meeting on 20th of April.

The Scottish Government’s Food Security and Supply Taskforce has had three meetings and is soon to produce its recommendations on a way forward at its next, final, meeting.

Fiona Grahame