Smallholding market trends

Young man attending his vegetables on his smallholding (last updated July 2019)

What has been happening in the smallholding sector

To refer to a 'smallholding sector' is slightly misleading, as smallholding is part of the broader agricultural sector and, as such is usually affected by the same price fluctuations and legislation changes.

For much of the 2000s, most sectors of agricultural production were hit hard for a number of reasons. This led to depressed prices and in some cases reduced demand. As the idea behind a smallholding is generally to be self-sufficient and produce a small surplus which is then sold through local outlets, it is likely that demand for the smallholder's produce during this period remained reasonably stable. However, smallholders suffered the same depressed prices that the rest of the farming sector experienced, particularly if they supplied to the trade rather than direct to members of the public. From 2010, the farming sector in general experienced much better fortunes, with most sectors benefiting from greatly increased prices until 2015.

After 2015 producer prices fell significantly and input prices rose so producers had to keep on cutting costs wherever possible. By 2017, despite the value of farm outputs continuing to rise, costs also increased and few farms were profitable in 2016/17. The fall in the value of the pound following the Brexit vote in June 2016 increased the cost of imports so UK farms benefited from imported farm produce becoming more expensive and so less attractive to UK consumers. However, the weak pound further increased farming input costs, including the cost of fuel as oil products are priced in dollars. There are fears that after Brexit farm incomes could be halved unless the UK strikes a free trade deal with the EU.

Organic production

During the 2000s, some traditional farmers began exploring the opportunities offered by full or partial conversion to organic farming. This meant that there was a rapidly growing number of businesses who were in many cases supplying the markets that smallholders traditionally supply. However, the combination of a fall in demand during the economic downturn of the late 2000s and early 2010s and downward pressure on the producer price of much organic produce led to many farmers converting back - by 2013 there were 1,800 fewer organic operators in the UK than there had been in 2008. Since then the market for organic produce has grown again and although the number of organic producers continues to fall, the size of organic farms is growing. Demand is likely to continue to strengthen as consumers become more concerned about the quality of their food. According to the Soil Association, sales of organic produce through box schemes and independent retailers has outperformed the wider organics market in recent years and this could benefit the small-scale producer focussing on selling on a local basis. Other recent trends include growing numbers of people switching to vegetarian or vegan diets and giving up animal products like meat, cheese and butter both for health reasons and for reasons of traceability.

Those smallholders that have been able to find niche markets may have fared better than those who have continued to supply the traditional markets.

Keep up to date with developments

The Country Smallholding Magazine website gives a great deal of practical advice on being a smallholder and recent developments in the trade. There is also information there on shows and events.

There are various websites that provide up to date news and information for smallholders, including the Smallholder and The Accidental Smallholder.

Detailed information on the wider agriculture sector is available from:

  • the Department for Environment, Food and Rural Affairs (DEFRA)
  • the Department of Agriculture, Environment and Rural Affairs in Northern Ireland
  • the Scottish Government Rural Affairs and Environment Department

 

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