Real leadership

WHAT a momentous few weeks it has been with the decision to leave the EU likely to shape our lives for better or worse for a generation.
And closer to home our new Cabinet Secretary for the Rural Economy and Connectivity, Fergus Ewing, has certainly hit the ground running in his new post.  
After months of delays and broken promises, a few weeks after his appointment and the vast majority of the outstanding BPS payments have been gratefully received by farmers up and down the country. It just goes to show what real leadership and a clear focus on a desired outcome can achieve, so well done Fergus!
Of course, we aren’t of the woods quite yet with many still due payments for the ewe hogg scheme and balance payments for LFASS.
And with continuing IT problems, the delivery of 2016/2017 BPS payments by the end of the year when they are so badly needed will be challenging, but there has certainly been significant progress in the last month.
It’s also great news for Scottish taxpayers that won’t now have to fund this mess, as the EU are not going to hit the Scottish Government for disallowances for their failure to meet the payment schedule under this scheme.  Mind you, the fact that France also asked the EU for a payment deadline extension may have had a bit to do with this – but welcome nevertheless.
That’s the first bit of good news. The second bit is the sudden drop in the value of sterling following the Brexit vote.
At 84p or 85p to a euro this week, that is the most attractive rate we have seen for some years and will have a significant impact on the value of the EU support payments for this year if it continues.
Furthermore, exports of lamb, beef, cereals, milk products or whatever have also just received a much needed boost, as all of a sudden these products are much more competitive selling into the Eurozone and beyond. Allied to that, imports are more expensive either from inside the Eurozone or beyond. So,  for example, Polish or Irish beef or NZ lamb for that matter currently don’t present quite the same competitive threat as they did pre the Brexit vote – still a threat but maybe not so undermining to our price as they were, at least for now.
Mind you, who knows where the value of any currency linked to sterling will go after this initial volatility post Brexit settles down?
Italy, the third largest economy in the Eurozone is in nearly as big a mess as Greece. Their banks are knackered as they have never sorted out their 2008 debt problems, and the government is borrowed up to the hilt and beyond.
And if anyone decided to have a closer look at Spanish banks, or the French economy, they don’t look too pretty either.
So maybe Brexit may do us a favour by complete accident by distancing the UK ever further from the continuing economic woes of the Eurozone.
Anyway, part of the reason for this sudden weakening of the value of sterling is, of course, all the political uncertainty surrounding Brexit.
It’s like a volcano that has lain dormant for years which has just erupted, and is now engulfing all in its path, when people living close by thought they were safe.  
The Prime Minister, Cabinet Ministers, Shadow Cabinet Ministers, political party leaders amongst a host of others seem to be resigning or changing almost daily as the political system explodes out of control like this volcano spewing ash from its core.
And as the lava flows from its heart, politicians are being consumed by its unstoppable force.  It really is an extraordinary unedifying spectacle.
But this political mayhem has also led to instability in our economy and the markets are now betting on immediate intervention by the Bank of England to try to stabilise the situation.
So, another part of Sterling’s weakness is the expectation that Mark Carney and the MPC will cut interest rates immediately, possibly to 0%. For those borrowing money this has to be good news as borrowing costs will clearly be reduced to record low levels.  
While helping exports, Sterling’s weakness will also push up the price of imports and not just for beef or lamb. So, the wider economic impact of this will probably see inflation starting to rise. Farming has always performed better with a bit of inflation in the economy and it is interesting to see warnings of higher food prices being issued by the big retailers already.
Maybe they will start sourcing more UK products at last, rather than just talking about it – now wouldn’t that make a nice change!
It is also likely that support payments will be OK until 2020 whatever happens with our EU exit negotiations over the next two or three years, or however long it will take, so that seems positive.
After 2020 we are certainly in the lap of the Gods, although  that was going to be the case anyway inside the EU,  where the 2020 reform was always going see reduced levels of support and be even more complex and illogical than the rubbish that was agreed last time.
Mind you, I think I would rather take my chances outside the EU negotiating some support for Scottish food production from Nicola Sturgeon and Fergus, than the poor English talking to Theresa May, the next Chancellor (whoever he or she may be), and George Eustice.
Look what Theresa May has done to police funding in England, and I notice George Eustice is already suggesting phasing out direct payments completely and replacing them with “much reduced” agri-environment payments and some sort of crop insurance type arrangement, maybe like the US model – who knows.
Of course, that is no surprise; it’s been coming for years, but we have always had the French to rely on to help protect our EU payments – but not now.
For now, that is a long way down the track and with the tumultuous events that are still unfolding every day there will be many twists and turns before this little lot is sorted out.
In the meantime, there is no point in worrying about things or events we can’t control, and we sure as hell can’t control this volcano any more than politicians who lit the fuse that blew it can, most of whom have already been swept away!
So we need to be alert, agile, and ready to take any opportunities that present themselves as this drama continues to unfold.
There will undoubtedly be problems as well, but we have no choice but to deal with whatever we are presented with over the next few years.
Those that ‘see the ball early’ like Andy Murray did so brilliantly at Sunday’s Wimbledon Final facing 140/150mph serves will be successful just like he was.
Those that don’t and sit back and wait for something to happen will get blown away, like many others would have been facing that kind of weapon on a tennis court.
The choice is down to every one of us to be ready to adapt and go with the flow, even though that flow may be as unpredictable and dangerous as lava. Interesting times indeed!