Some are fiddling while home burns

Everyone you talk to that services the industry is worried. Every indicator as to the financial health (or otherwise) of this industry is looking dire at the moment.

The main one that tells no lies is cash. To be brutally frank, many across almost every sector, large and small, are literally bleeding cash. Their working capital has dried up and plan B has already been put into play.

In fact, some are already beyond plan B. For example, some of those dairy producers unfortunate enough to be supplying First Milk.

The demise of this co-op once heralded as the saviour of the dairy sector is as spectacular as the unfolding demise of the hundreds of businessmen who have trusted the directors with their futures over the last 15 or 20 years. It is an absolute tragedy and, unfortunately, there will be no happy ending.

The final horrible twist in this sorry tale will be producers on Muller Wiseman Tesco contracts worth 30ppl getting the same EU dole cheque as First Milk producers on half that, and both the Scottish Government and NFUS seem content for this to happen.

But the woes of the industry don't stop at First Milk. The debt currently being carried by the banks and now the supply trade is scary beyond belief. How many sheep from the autumn sales remain unpaid to auction marts? And finished sheep around £60 won't go far to sort this.

How many store cattle are actually currently owned by the men that bought them in the ring? Or how many still by the auction mart? With barley less than a £100 per tonne and wheat not much more, it is probably better not knowing as I bet the number will be enormous.

Add to that the sudden changes to carcase specification weights as well as farm assurance and age status of some fattening cattle that some processors have just introduced and the pressure is growing.

How many feed suppliers, machinery dealers and other rural businesses servicing our industry have had to extend their own working capital facilities with their own banks to cope with the current situation? The answer, I'm sure, will be hundreds if not thousands, and they will be as worried as many thousands of their farming customers.

And what has been the response to this unfolding disaster that has been predicted by me and many others for months now? Despite the fine words and endless meetings, our biggest customers, the multiple retailers, continue to cut each other's throats.

So, under pressure from shareholders, they are proving even more difficult to deal with than ever. There have been several interesting TV programmes recently showing examples across the industry from vegetables to meat and dairy where suppliers are getting crucified by the retailers and, in turn, the primary producer always suffers.

With no inflation and a strong pound (or weak euro, take your pick) killing exports, food has never been cheaper and cheap imports have never caused us so much pain and still it goes on.

A much heralded SG, QMS, NFUS jamboree to Canada and the US this week I'm sure will be great fun for the people on it and maybe they will even have the time to write a strategy for Scottish Farming for 2025 when they are on the plane.

But as SG, QMS or NFUS don't actually produce, process or sell anything (never mind export to a new market where the exchange rate doesn't work) then I'm not sure how this can help the current dire situation. And, by the time 2025 comes around, then maybe the amount of red meat available for export from Scotland will fit into their hand luggage the way things are going!

There has been just no urgency from our farming leaders at SG, quango or trade association level as this drama has unfolded over the last 10 months. And never has that manifested itself more than in the much maligned handling of the new Basic Payment Scheme.

It has been utterly shambolic, from the trumpeting of the now forgotten Pack Report, to the latest soap opera that the payment rates and date of payment have become.

It is totally unacceptable that our Cabinet Secretary leaves the bridge of the ship heading for the rocks to go to North America for a week at such a critical time for our industry. But I guess this pretty much sums up this whole sorry BPS saga.

More importantly for worried producers, what are the practical implications of this? Well, we are still none the wiser of the timing of support payments and more importantly the value of these payments.

I can only speak for our business, but we are predicting a drop of over 40% in the value of our support this year and our business won't be untypical of many other upland livestock businesses in Scotland. However, if that isn't bad enough the cash flow story for us, like many others will be much, much worse.

To try and 'soften the blow' of the decimation of support levels for productive businesses, ScotGov agreed to increase the value of the payments under the Beef Calf Scheme (BCS) and even introduced the daft Ewe Hogg Scheme.

As grateful as we may be for the small mercy of the BCS payment, we won't see this money before June, 2016 - and neither will the poor souls who need to keep some hill hogs until the end of March, 2016.

So, instead of receiving a 40% reduction in the cash we normally receive in December, we will receive probably 60% less than last year. For anyone who has a historic payment based on a half decent stocking density because they keep suckler cows or sheep, the story will be very similar.

While all the noise recently has been on the timing of these payments, the real story - once they finally arrive - is actually the size of the payments. That is when the chickens will really come home to roost.

All the cosy compromises and deals cut between NFUS and Richard Lochhead will be exposed for having totally failed thousands of decent farmers, their suppliers and, frankly, Scotland as a whole.

The NFUS have been in the pocket of the Scottish Government for too long and instead of fighting this madness they chose to go along with it, and now it's too late.

Too late to start criticising on the timing of payments, too late to sort out the stupidity of things like greening, but most importantly too late to right the wrong of the totally unjustifiable way thousands of decent businesses, old and new, are being treated with the redistribution of support.

The old worn out excuses that it's the EU or UK Government that are to blame will cut no ice when banks start repossessing hundreds of farms, which they surely will and soon.

Meanwhile, the silence is deafening, other than of course the sound from across the Atlantic of 'Nero fiddling while home burns'.