View from the East By Dr Keith Dawson

AS NOTED in my last column 'uncertainty' is the watchword for 2017 and it has already proved to be – and not just for Michael Flynn’s employment prospects.

The 'Hard Brexit' debacle continues back home with agriculture likely to be a major loser, both on support payments and tariffs on exports to the EU, with the loss of the single market. Skimmed milk exported into the EU from outside the single market attracts a tariff of 74%, while butter is penalised with a 63% tariff and cheddar cheese 43%. A tariff of 53% is levied on wheat exports and frozen beef carcases 160% of their value.

So, despite the drop in the value of sterling aiding exports in the short term, they will be hit hard should a 'no single market Brexit' ever come to pass?

The news this week is that raw materials have increased 20% and with fuel costs increasing, this will hit input and machinery imports increasing capital costs in farm businesses. Increases in fertiliser costs because of the Brexit effect will need to be factored into rates this season.

In Ukraine, we know all about the devaluation of currency and its effect on costs and also trade barriers with sanctions against Russia. Fortunately, most sensible Western farm businesses here operate in euros or dollars for output prices and input costs. We have no EU support payments to buffer price variations.

These payments constitute 55% of UK farmers' incomes to the tune of about £2.7bn, including rural development payments.

Politics and events on the new 'Eastern Front' are never far from the minds of Ukrainian people, with uncertainty being fuelled by the movement of 34,000 Russian troops to the Ukrainian border during the week of Trump's inauguration, as well as a large increase in artillery shelling.

This was an obvious attempt to test US presidential resolve over Ukraine. The sacking of Putin’s pal, US security adviser Flynn this week, will be greeted warmly here, as will the rapid volte face of US presidential staff on support for Ukraine, sanctions against Russia and NATO.

It all looks chaotic and uncertain on Brexit and political fronts which inevitably affects farming and investment.

On the crop front, we are back to more normal cooler temperatures with -20°C in mid-January. Fortunately, a thick quilt of snow is protecting autumn sown crops underneath – at least so far.

March can be a critical month in central and eastern Europe as snows will likely have melted, but cold Arctic winds are not uncommon causing massive crop scorch, as they did in parts of Poland last season. The wheat area is down in Ukraine this season and later sown crops are vulnerable to these winds.

The condition of the EU's OSR crop is pretty variable and areas are down across Europe, even though oil prices are more buoyant than grain. A main driver of this difference is the shortfall in palm oil production due to poor yields caused by drought in the Far East, particularly Indonesia.

Lower than expected global soyabean stocks and stronger than expected Chinese soya demand have also produced upward market momentum, although an increased Brazilian soya harvest may impact in due course. Even olive oil production has been hit by drought conditions last season across the Mediterranean, pushing prices up and creating shortages.

In contrast, record end of year grain stocks, despite the predictions that climate change would damage crop yields, mean that grain prices are unlikely to move significantly, unless there is high winter kill in Russia and Ukraine, which looks unlikely.

There was a great hullabaloo at the end of January that 2016 was the hottest year ever. This was quite simply not true, as both 2015 and 1998 were both not significantly different to 2016, within the limit of measurement accuracy and, of course, in the distant past temperatures were even higher.

The most accurate dataset is global satellite temperature data which has shown, as I predicted, a rapid drop in temperature following 2016’s large El Nino event, back to 1997 levels. The cooling increased Antarctic ice growth and produced significant growth in New Zealand's glaciers over the last 30 years.

It is interesting also to note the latest furore in 'settled' climate science. Whistleblowers at the National Oceanic and Atmospheric Administration (NOAA) in the States have come forward to decry the distortion of data in a paper published just before last year's Paris climate conference.

This paper purported to show that there was no pause in global warming from 1998 to 2016. The haste to publish manipulated data to fit the 'Paris narrative' got in the way of good science by claiming that there was no warming pause.

It is good to see our own Met Office sensibly going against this wave of distortion by announcing that the 'the slowdown hasn’t gone away' and is at odds with the much vaunted but inaccurate climate models.

Despite a $2bn dollar annual budget for NASA's climate research, it is interesting to note that recent research has also shown that global emissions reduced faster before the Kyoto Agreement than after, showing that legislation is a poor substitute for technological and economic development in achieving progress.

Our efforts in the renewable energy field from sugar cane biomass in Cuba are gathering further traction from the election of Trump. The Cubans and other foreign investors see an opportunity as the momentum of US towards dropping sanctions slows still further post election.

There, we have started clearing the first site for a 60mW biomass plant at the Ciro Redondo sugar processing plant, the first of five planned plants. The biomass fuel source for electricity generation is sugar cane waste, bagasse (the fibrous matter remaining after cane has been crushed) and the harvested invasive weed marabu.

There is a huge need to move away from Venezualan crude diesel oil model for generation, coupled with liberation of farmland from the vicious marabu weed. This will allow moving away from horse power to tractor hp.

This land will grow a range of crops from soya, maize, sugarcane and potatoes. Also, double cropping two crops in a year is possible with the 365-day growing season.

That's in stark contrast to the 210-day growing season in Ukraine where yield potential is more limited by its brevity than its soil quality – proving that we need both soil and sun as farmers.