Farming can help lead economy out of recession

LONDON Tue Feb 17, 2009 3:11pm GMT

A rainbow is seen behind crops near Helford, on the coast of Cornwall in south west England on August 29, 2008. REUTERS/Toby Melville

A rainbow is seen behind crops near Helford, on the coast of Cornwall in south west England on August 29, 2008.

Credit: Reuters/Toby Melville

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LONDON (Reuters) - Farming can help pull the economy out of recession, National Farmers' Union President Peter Kendall told Reuters on Tuesday.

Speaking from the NFU Conference in Birmingham, he said farming was one of the biggest sectors in the economy, was not badly hurt by the economic crisis, and could benefit from increased exports across the food spectrum due to a weak pound.

Asked if farming could help drag Britain out of recession, Kendall said in a phone interview: "Yes. We (farming) can be a really important part of the recovery process -- if farms produce more raw materials for food production."

He added tax concessions for farming-related projects would give the economy a further boost.

"Give us the tax breaks. Let's build wind farms. Let's put solar panels on roofs. This will boost the construction industry, and puts us (farming) in a very good place."

Separately, Waitrose, the supermarkets chain belonging to the John Lewis Partnership, said Britain could suffer food shortages unless the numbers of skilled people entering the farm industry improved.

Waitrose managing director Mark Price told the NFU conference that the food industry needed to act immediately to stop the threat of losing skilled workers.

"Modern farming is a highly skilled operation requiring technical proficiency, business acumen and environmental awareness," he said.

"Well-qualified people are essential to its future prosperity. The average age of a farmer is 55 years and unless we can fill the skills gap, there's a real possibility that the British farmer and self-sufficiency might become a thing of the past."

Kendall said that while last year the country's gross domestic product fell by 1.8 percent, total income from farming rose 36 percent and farming's contribution to GDP climbed 38 percent.

In a keynote speech to the conference on Monday, Kendall urged farmers to produce more, and at the same time make less of an impact on the environment.

"That is the new agenda for farming. Producing more and impacting less," he said.

WEAK POUND

Kendall said that the global economic crisis should not do great harm to the farming sector, and that the slide of the pound against major currencies was an opportunity to boost farm exports across the board in 2009, from cereals to lambs.

He said that, in terms of export earnings in sterling, cereals was the farm sector that could benefit most from the weak pound, but he gave no figures.

"It (the soft pound) makes exports cheaper and imports more expensive," Kendall said.

"If you want to bring cauliflowers in from France at this time of year, it would be expensive. But with the weak pound there are opportunities for Britain to export from any surplus."

Farming, taken on its own, is vital to the economy, the biggest onshore primary industry in the UK, Kendall said.

"But farming needs to be seen as part of a much bigger economic fabric."

Farming lies at the centre of a rural economy that turns over 300 billion pounds a year and employs 5.5 million people, Kendall said.

It is part of a food industry that in manufacturing terms far outweighs such traditional industries as steel, shipbuilding or cars.

(Reporting by David Brough; editing by Keiron Henderson)

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