Selling the farm

[00:00:00] And how much have you spent on seed? Two and a half thousand on the rape. So rape, which I told you not to drill, which you did, two thousand five hundred. Wheat. Six grand. Six thousand pounds. Chemicals. One thousand five hundred. Diesel. Two thousand pounds. Two thousand in diesel. I don't like this game. Just track to service. You broke that though. So you're now at seventy eight, eighty, eighty six, eighty seven, eighty seven, eighty seven, eighty seven, eighty eight.

[00:00:30] Ninety nine, ninety four minus ninety five thousand four hundred pounds. This is the Debunking Economics podcast with Steve Keen and Phil Dobbie. Well, that's Jeremy Clarkson and Caleb getting to grips with how much it costs to run a farm on Clarkson's farm. Now, I'm not sure anyone has ever got really rich from farming except those who've been using it as an inheritance tax dodge.

[00:00:57] But how does the government balance trying to stop that happening whilst driving the UK, and this is the same everywhere, into an age of food security and self-sufficiency? Because right now, the UK is further away from that than most. That's this week.

[00:01:19] Well, as Donald Trump wants to try and push the UK to eat chlorinated chicken, and at the same time, the UK government is trying to introduce an inheritance tax for farmers. The farming community is front and centre in the UK at the moment. But he raises a lot of questions which apply around the world about, you know, just how much protection do we give to the farming industry?

[00:01:42] Now, Steve, I've been spending a bit of time lately watching the latest episodes of Clarkson's farm. And you'll get, by the way, you'll be getting a lot of my Jeremy Clarkson over the next half hour. But it's interesting because, of course, he hates the people. That's why it's called Moe Down as opposed to stand-up comedy? Yeah, I think so. Or just barely anything, really.

[00:02:05] But in the last episode of Clarkson's farm, there was a very short clip to Rachel Reeves, the UK chancellor, holding her a red box. And Americans have been saying, what is this? Because I think it was like only there for a frame. It's one of those things where, you know, if you're watching something and you see a picture of a girl in a bikini and it's only there for one frame. Most women don't see it, but men do. Because it's got to be something that, you know, you really want to see. Otherwise, it just flicks by.

[00:02:34] So Americans saw this and said, who is this woman holding up the red box, not realising the story behind it, which is the fact that in the UK, the government has introduced an inheritance tax for farmers. So until recently, farms were exempt. So if you had a big farm, you passed it on to the family so that the working farm could continue. That was not subject to inheritance tax.

[00:03:00] I think if you sold it, ultimately you'd pay capital gains tax, which is a lot less than inheritance tax. So, I mean, they were tackling something that's a problem because of all these variations of taxes. But if you had a stack of money like Jeremy Clarkson, then you could buy a farm and then, you know, it used to be the case, buy the farm, it gets passed on, gets – and if you sell it straight away,

[00:03:31] then you don't pay any capital gains tax. So buy a farm for 10 million pounds, for example, pretend to be using it, or as he did, engage a farmer. So long before – time before he had this TV series, he'd had the farm for about 10 years. And, you know, so he had no interest in farming. He just actually bought it with a bit of money he had. A bit. So that when he died, that – you know, so he's a little bit – you know, when he's saying he's fighting for farmers, actually, he started it all as a tax dodge, I think.

[00:04:00] I've got to be careful what I say because I don't want to get sued by him because he's got a bit more money than I have. But, I mean, it looks like from the outside. Buy a farm, you die, it's all part of your estate, no capital gains tax, and because it's a farm, no inheritance tax. Easy win. And so lots of people – So you sell – you'd be bought for 10 million, which might have been taxed and different, right? And then you sell the thing if it's 10 million or whatever. It's 10 million straight cash passed on to your family. No tax, OK, yeah. Yeah.

[00:04:27] So that's why the government said, well, OK, if it's more than 3 million, we're going to apply an inheritance tax. But we'll only apply it at – inheritance tax is quite hefty. It's 40%. And we'll only apply it at – you know, and it's even – so it's now 20%. So they said, well, OK, over 3 million, we're going to apply it. And we're going to apply it on all farms worth over 3 million pounds. But we're going to halve the inheritance tax. It's going to make 20%.

[00:04:55] And if you do have to pay it and you want to keep working the farm, you can pay it out over 10 years. So on the one side, you can understand what they were trying to do. They were trying to avoid the tax dodgers who were just trying to buy a farm. There's a lot of very wealthy people who bought farms. But on the other side, there's a lot of genuine farms and farm property has been shooting up in value because land in the UK is so valuable that lots of people are finding that, you know, their farm is worth over 3 million. In fact, I've got some figures.

[00:05:25] So by the way, he paid 6 million for the farm thinking that, you know, he's going to avoid that inheritance tax. And the farm is now – we reckon it's worth about 12 million. So, yeah. So of that, the first 3 million won't be taxed. So 9 million will be taxable at 20%. So he'd have to pay 1.8 million, which is why he's so upset with the chancellor because it's costing 1.8 million. But – oh, he's, you know, his children.

[00:05:54] But spread over 10 years. So I don't know. Where are you on the government on this? Have they done the right thing or is this a travesty that is attacking the very heartland of the farming community in the UK? Nothing in between, black or white. Sorry. I'm going to give you some grey soil instead. I'll truck it over from Amsterdam. There's – I mean, that's the same thing happened back in Australia, you know, decades ago. I don't know if you know the term – have you ever heard of the term pit street farmers?

[00:06:25] No. I can understand what it means. So pit street is the wealthy – a wealthy district of central Sydney where a lot of banks, et cetera, are. They have a lot of loggers, yeah, and dentists. Yeah. And the idea was that to avoid – I've forgotten how it managed to avoid tax, but they'd buy a farm somewhere and reduce their tax burden. So in terms of closing a tax loophole, it makes plenty of sense to do something like that. But the other side – I mean, I haven't watched – you better do your Jeremy Clarkson impression.

[00:06:53] You haven't watched Clarkson's farm? I haven't. But it's – the extent to which he actually is doing genuine farming these days brings up the other side of it, which is – It's great. I mean, he is – he has done, you know, no end of good for the farming community because everyone recognises now what hard work it is. And, you know, and the characters in it are all very likeable because they're just – well, everyone loves someone who gets down and does stuff.

[00:07:48] Hmm. I imagine. And you imagine, actually, that's by choice, you know, that's probably – it's probably including stuff like Scotch whiskey and stuff like that, you know, which they could possibly do with that. I'm sure they could very easily be self-sufficient. Australia is the same. You know, it's imports 15 percent, but a lot of that will be packaged goods. So, you know, you probably can't get below 15 percent. But 40 percent for the UK is a lot, isn't it? It's a lot.

[00:08:12] And this is the point that I'm focusing on with global warming, that you don't – I mean, you had the experience during COVID, and this is – I hate getting caught up in this bloody thing. If anybody annoys me too much, I'll drag out my Darth Vader mask. But the fact that the UK could not make masks, okay, when COVID hit meant that, okay, they conned you and said, look, masks don't work, you know. You put them on and it doesn't really help at all.

[00:08:40] What they actually meant was we've only got 50 million in storage. If we let everybody in the UK have one, they'll all be gone in a day. We need them for hospital, so we're going to tell the public, hoi polloi, that masks don't work, which was total – you know, using a technical term, that was total bullshit. So now they're going to be telling us you really don't need to eat. You don't need food. Yeah, that's right. If you suddenly have a famine and you can't – well, you don't really need food, you know. You can substitute it with something. Food doesn't really help, you know. I mean, Jeremy Clarkson might well be in that category.

[00:09:09] I haven't seen his physique recently, but – He looks like he enjoys quite a lot of food, actually. There you go. Okay. Well, you know, this is where the – It's always as if he's in the same room, isn't it, really? Except for, you know, the beauty contest. I mean, well, he wins hands down. So – I don't know. They're all in the same boat. Anyway, you carry on, you carry on. Okay. Well, see, if you don't produce masks, that only matters during a pandemic. If you don't produce food, that matters every bloody day. Yeah.

[00:09:38] And the lack of food security for the UK is extreme. And this is why I think whatever you do, you've got to be making sure you've got food security. And I very much doubt that's at the front of my – the mind of the woman carrying the red box. It's all about, you know, let's specialise and comparative advantage, et cetera, et cetera, which is the mindset that has led economics to the situation where many countries can't produce things they used to once produce

[00:10:04] because, hey, it's more efficient to let the people with a comparative advantage produce it than you. Well, that works until it doesn't. And when it didn't with masks, we saw the absurdity of the shenanigans over masks in the UK and most of the Western world. The masks were made where I moved to for COVID, which was Thailand and also China.

[00:10:28] But if there's a sudden collapse in food supplies globally and the UK might be told, sorry, you're going to give you 40 – you're going to have to eat 40% less. And, you know, I don't think Jeremy Clarkson would enjoy that diet, let alone the rest of the country. It might test the world to good. Well, actually, it's interesting because in the latest episodes of Clarkson's Farm, he's actually bought a pub and he's trying to make the pub serve only English food.

[00:10:56] So he's very much on this whole, you know, local produce. But it can only go so far because we've got that 40% figure. But within amongst that 40% figure, there'll be bananas, there'll be stuff that, you know, that we just can't grow in the UK. Yeah. And it would be quite a limited diet in the UK if we just survived on the stuff that can be grown in the UK. That's what we may well face. So, like, this – the biggest – Coming to potato. There's so many fears about what global warming will do.

[00:11:21] But one of the major ones is damaging production of grains, grain crops in particular. And the study done – published by the OECD in 2021, where the work on modelling was done by Tim Lenton, who's a colleague of mine and a research colleague at the University of Exeter.

[00:11:44] And he looked at the combination of both the AMOC declining, so the Atlantic meridional overturning circulation dropping, and two and a half degrees of warming. And the model predicted that 70% of the – the amount of land area on the planet which was suitable for growing wheat would fall by 70%. Similar for corn, there'd be a 1.5 times increase in the amount of land suitable for rice.

[00:12:11] But the amount of increase in rice that would – it would in no way compensate for the fall in grain output. So, if you talk about a 70% fall in grain output, that's a 70% fall in population you can sustain as well, roughly speaking. Now, that's catastrophic. That is not a boon to the global economy. That is not – food's going to get slightly more expensive. You're going to have 70% less food. And if that happened, then we would have global famines.

[00:12:39] Now, in that situation, countries that were producing enough food for their own people before the crisis hit and exporting the surplus are not going to export – if the surplus disappears, they're going to probably hang on to as much as they can domestically. And we've already seen this last year with India, where India no longer exports any form of rice other than basmati because the right crops have fallen. Yeah. So, you absolutely have to have food security.

[00:13:08] So, in that sense, very much – there's no way that Reeves' policies are directed at that first and foremost. It's mainly getting around the tax – Yeah, well, I mean, before that, before we get there, you know, I mean, the forces are driving us in that direction, aren't they? Because there's competition for land. So, you know, you could say, well, there's loads of land that can be used for agriculture in the UK and there's loads of land that could be used for building. But unfortunately, they are very often in the same place. So, people want to be within commuting distance of London, for example, for a great deal of the jobs in the UK.

[00:13:38] And a lot of the arable land to feed those people in and around London is in the same places. So, I mean, you know, just in my town, I can see fields that are now being replaced with housing estates. So, you've got that competition. But the other driving force behind all of this as well is – and maybe it's because Britain is importing stuff – food is cheaper here than it is. So, in Australia and in America, two places which are more or less self-sufficient on food, you pay more for agricultural product.

[00:14:07] I can't figure out why. Are you sure? Yeah. What are your numbers on that one? Yeah, well, I'll give you some figures in the second half. Let's go to the numbers. But in certainly – well, actually, yes, let me give you the figures now. I'm saving all this stuff for the second part. But we'll burn it all now for you, Steve. I'll have nothing left to give you in the second half. Apart from Jeremy Clarkson. Apart from this, I'll just have 20 minutes of Jeremy Clarkson. But the – well, actually, when it comes to meat and livestock, for example.

[00:14:35] So, UK wholesale price for chicken is the outlier because it is a lot cheaper in the United States. So, we'll come back to that. But beef, UK wholesale price for beef is between £1.85 and £5.51 a kilo. So, in the US, it's £6.80 to £9.90 per kilo. So, US beef, even though we hear about all of these shortcut measures and how animal welfare is not as great, they are paying a lot more for their beef.

[00:15:03] And pork is more expensive in America as well. So, you know, can't quite figure that out. But I also found that just buying fruit and vegetables in Australia at the retail prices were more than I was paying in the UK. Now, there's purchasing parity and all that, which influences those things, of course, isn't there? You know, you can – There's also – I mean, this is one element which mainstream economics can't get its head around because they presume that as you increase volume, cost rises.

[00:15:29] But in fact, in the real world, it applies more to factories than it does to farms. But look, the unit – the variable cost per unit is constant or falling. Your fixed costs are amortised over a larger volume. And consequently, you get the result that if you can increase your capacity by export sales, you actually make a larger margin than you make out of the domestic stuff because the higher your capacity utilisation, the lower your per unit costs.

[00:15:59] So I've seen this stated in what – just have a think, you know, one of those classic YouTube channels that gets far more views than we're getting. That talks about new technology. And they said that the – I think in the case of the solar cells, they said that China is the world's major exporter and producer and exporter of solar cells.

[00:16:22] And in fact, they said they get a higher profit margin at a lower per unit price for their sales to Europe than they make domestically. And the only – the explanation for that is by using a larger – they gave, say, from 80% capacity with domestic production to 90% with domestic production plus exports. The extra 10% that sold at the export market has a much lower fixed cost per unit.

[00:16:50] It's the same or smaller variable costs, and they actually end up with a larger profit margin. So, you know, so there's a capacity there for the export market to be priced below the cost of the domestic, not because they're dumping so much, but because by increasing capacity utilisation, they drop per unit costs. Yeah. And by improving productivity as well, which we'll come to after the break. We are going to take a break. I think it's about time. Yeah. But –

[00:17:19] Did Jeremy take us out? Well, no, before I do, the – I mean, let's just finish off with where we started in this first part, which is about, you know, is she doing the wrong thing by saying that, you know, she's going to introduce an inheritance tax for farmers? It seems to me the conclusion is that, you know, there needs to be something to stop tax evasion, but she's also got to make sure that she is protecting farmers, and maybe she's not doing that in the right way, which is why Jeremy Clarkson was served.

[00:17:46] So I actually think the easiest way is if you own a farm, after you've had it for a few months, you get a government inspector comes around, you have to meet the government inspector, and you have to fix a bit of fencing and milk a cow. And if you can't do either of those two things, I think the farm should be taken away from you. But anyway, that's it for part one of debunking economics. By the way, you mentioned this whole thing about we're not getting many listeners on YouTube.

[00:18:15] We're doing okay on ACAST, but on YouTube and on the podcast, the audio version, no one's watching us at all on YouTube. I look and I see if I search for your name, I get all these videos of Steve Keen with massive audiences, and the only ingredient I can find which seems to be the difference between massive audiences and no audience, and I'm not taking this too badly, but it's me. That's right, yeah. So you've got to improve the impressions, obviously. Well, I don't know, maybe that's what's putting people off,

[00:18:43] but we'll be back in part two of Keen's Farm, and we'll look more at this. I ain't going to go to Maggie's Farm no more. I ain't going to go to Maggie's Farm. So when we come back on part two, we'll have a look at total factor productivity and other spurious economic concepts. We're back in a second.

[00:19:08] This is the Debunking Economics Podcast with Steve Keen and Phil Dobby. So, Steve, I mentioned total factor productivity, which is a measure, one of the many, I guess, but trying to look at your outputs versus your inputs. It's as good a measure as any, isn't it, to look and see whether something is...

[00:19:38] Is it? ...of the French. Good. I'm glad I've got the research, and I've got all the numbers there, then. We can just throw them all away. The numbers make sense, but not about what the bloody economists think they are, because this is one of the fantasies that's popped out of neoclassical minds, because the initial model, the neoclassicals build of how production occurs, is called the Cobb-Douglas production function, named after Cobb and Douglas, obviously. And they were a mathematician and an economist, respectively,

[00:20:07] who the economists had a set of index numbers about GDP or output. It wasn't actually GDP. Output, labour and capital. And then wanted a mathematical function, which the mathematician Cobb put forward. And that had production being... Output being labour multiplied by capital, where labour and capital are both raised to a power. An exponent, like, you know, X squared type thing. Only rather than X squared, it was two numbers which summed to one.

[00:20:36] And the idea there was that if you double all inputs, you got a result that you doubled output, which makes sense if you don't change the technology. Twice as large a farm with twice as many machines will be twice as productive. So that's why the exponents summed to one. But the exponents were based on the income shares that labour and capital get in the economy. So labour getting, roughly at the time, this is back in the 1920s, 75% of GDP.

[00:21:07] The exponent for labour was 0.75 and the exponent for capital was, therefore, 0.25. So that was the model. I give a lot more background on that, but I'll leave it at that to begin with. And then in the 1950s, Robert Solow came out and said, well, we don't actually include technology in here. We've got labour and capital, but not changes in the level of technology. So let's add another term, which became total factor productivity,

[00:21:33] where that says the output is equal to this technology factor, TFP, total factor of productivity, and that grows over time, exponentially grows over time, multiplied by labour, raised to the power of 0.75, times capital, raised to the power of 0.25. And then when you did the statistics and said, well, how much does output change given changes in total factor productivity, changes in labour and changes of capital, more than 85% of the increase in output over time

[00:22:02] came from changes in total factor productivity. So this became a major fixation of neoclassical economists. And they try to explain growth on the idea of total factor productivity, which according to them is ideas, bright ideas. That's what it actually comes from. In fact, if you really want to get bored, I'll hit you with the full logic. But I realised that these models of production,

[00:22:31] the kind of economists use, imagine you can put machinery, humans and machinery together, and goods will come out the other end, which is exactly the same as saying, I call it the magic theory of production. Harry Potter plus a wand equals fish, okay, or equals cows or equals automobiles. No, but if you put machinery and people and land together, then you do get something out of it. Well, that thing is, land's getting energy, and this is the basic point. They left out the role of energy. So when you include the role of energy, which is, of course, you can't produce energy.

[00:23:01] Energy is something that just exists. You exploit it. You therefore generate waste when you do it, etc., etc. But it turned out that that factor that they think was what they call total factor productivity was actually the amount of energy that is used by a typical machine at any point in time. So if you go back 250 years, and what's the machine that's doing the ploughing? Well, it's a couple of oxen attached to a wooden plough that's cutting up the earth. And what is it now?

[00:23:29] It's a 400 horsepower or whatever tractor with Jeremy Clarkson at the wheel. A Lamborghini, in fact. A Lamborghini. That's right. A Lamborghini tractor. Does he have a Lamborghini tractor? He just sold it, but yeah. He did actually have a Lamborghini tractor. He couldn't get into his cow shed or wherever he was keeping his tractor. He kept on crashing it. But yeah, it was problematic. That's one of the amusing points. A lot of people would not know that's why Lamborghini and Ferrari both began to tractor manufacturers. Yeah, and still are.

[00:23:59] I don't know if Ferrari is, but Lamborghini still is. Yeah. But anyway, the energy is what that so-called total factor productivity is the amount of energy that a machine outputs as useful work. That's what it actually is. So TFP, all the numbers you're going to give, economists think it's about bright ideas that have meant we can do better stuff. Yeah, it's bright ideas. You've got to have ideas to build new machinery, but it's fundamentally the amount of energy we're using. And that again, of course, that becomes another bottleneck

[00:24:28] because you can't run out of ideas, but you can run out of energy. Right. So I've been looking at a TFP index. It looks like it is including energy, you'll be pleased to know, and labour and investment. Sort of, yeah. And investment. So it's still useful to compare one country to another because the same, you know, if it's any use whatsoever. They're making the same mistake. They're making the same mistake. So the TFP index for the UK is 62. Globally, it's 57. Not 69?

[00:24:59] No, not 69. Or 42. Okay. Yeah, no. So I choose 69, a favourite number of yours. 62. 62. Globally, it's 57. It's 50 in the United States. It's 51 in Australia. So on the basis of all of that, you'd say, well, actually, you know, the UK is quite productive with the resources in the... But I mean, surely part of that would be it's not going to be great in Australia or the US where you've got vast tracts of land, not particularly arable. I mean, surely a big part of it

[00:25:28] is going to be the arability of lands. Because, for example, France, which has smaller farms generally, has got a TFP index of 76, much better than the UK. The quality of the land, obviously, is a big chunk of this, isn't it? I know. Yeah, I mean, I imagine... And the mechanisation. It's more mechanisation that matters. The more mechanised, the higher the figure you're going to get for that TFP because what it's actually telling you is the amount of energy

[00:25:57] that your machines are processing and turning into useful work for you. So that's what it really... It's one of these signs of the... It was once actually called by economists, it was the sum of our ignorance. You know, 85% of what we think causes economic growth, we don't have an explanation for. But, in fact, when you look at it, the explanation is that it's a... It's energy which they've left out of their production functions. So, interestingly, France doing so much better than the UK

[00:26:27] in its productivity. The average-sized farm in France is 63 hectares. In the UK, it's 82. So they're doing it on smaller farms. Maybe they just have a more intensive approach because they've got smaller farms. Maybe they've got smaller farms because they've got less of these pretend farmers using it as a tax dodge. Maybe that's part of it all as well. But also in France, they aren't very big on subsidies. So they get fuel subsidies. They get assistance for modernisation to try and increase that productivity. They get low-interest loans on capital and equipment.

[00:26:58] I feel like the UK is not doing any of those things. So if the Chancellor was smart, she'd be saying, well, OK, we have got a point. Maybe $3 million is too early. Maybe we'll make it $10 million or whatever where it cuts in. But in compensation, let's look at what France is doing and how can we get to that level of productivity that we're seeing in France? Because that's a big win, obviously, in that road towards self-sufficiency. You've got to get more out of the land that you're using. Yeah. And I think France has had a history of trying to hang on to its rural lifestyle, which the British have completely ignored.

[00:27:27] The British lifestyle is shooting grouse and kicking peasants off the land. Yeah. The French approach is... Only because you can't shoot the peasants. It's illegal. Well, not anymore. You can always rely upon a law change at some point to make them fair game. But... The peasants do... Not the peasants. The peasants do deserve it, though, because they are... I mean, I've never done it, but they look like they're quite easy to shoot because they just sit there. See, you know, they're asking for it. The peasants as opposed to the peasants.

[00:27:56] Yeah, exactly. You know, the peasants, they can run fast. We will not get you together with the pheasant flugging. The pheasant flugging. No, we're not going to do that. Particularly in the German Clarkson voice, they'll be very difficult. Yeah. But what it means is that France is probably closer on food self-sufficiency than the UK is. And that's the thing which absolutely matters. So if you go back to the limits to growth, which, of course, is one of my key references, they made a number of recommendations about how we could survive a down... You know,

[00:28:27] a potential... We could avoid a potential collapse in the capacity of humanity to produce goods and services on this planet. And one of the recommendations was we have to put absolute first priority on food. That had to be absolutely number one. You can invest in food beyond the point at which it's profitable. because if you... They had five system states they included. One of us food per capita. And if food per capita starts to fall, then basically everything else falls apart.

[00:28:56] So one of the important guidelines was to make sure you had the food producing capability. And the UK has not got it. And given how short-sighted Starmer and Reeves are and everything else, I can't imagine they've got any long-term perspective on the need to reach food self-sufficiency in the UK. Yeah. But that's what they should be aiming for. If I was running the policies that I would be looking at first and foremost, and that might involve borrowing a lot of ideas from the Netherlands where they have more than food self-sufficiency on far less land

[00:29:25] because they've industrialised their food production systems. Yeah. But there's good and bad on that, isn't there? But just back on France where it's less of that intensive sort of greenhouse-type farming, they are importing a lot less, 20% compared to 40% in the UK. But I mean, they do benefit that they've got a different climate. You know, the south of France is very different to the north of England, for example. You know, the south of England might be very similar to the north of France. But from that point on, as you go from that point

[00:29:55] in each direction, the weather's getting progressively better or progressively worse. So you can grow a lot more food in France that, you know, that Britain would want to import. Yeah. That's an absolute given. But it means that Britain has to put more effort into being potentially food self-sufficient, not less. And that's one reason I'm not in the UK. I mean, I'm happy to visit. I don't want to live there and find there's suddenly, you know, a sudden cessation of food exports to the UK. You know,

[00:30:25] the boat people in that case would be trying to get to France from England. Yeah. I might be one of them. Huh? I might be one of them. I am stocking up in readiness, actually. Like a lot of English people, we know it's coming. So we are... That's right. We are storing... Fattening up. Fattening up in readiness. Forget the carbs, let's fatten ourselves. Yeah. Yeah. But, you know, the absolute necessity of food self-sufficiency, that's what I'd be focusing on. And certainly importing 40% of your food. I mean, as you mentioned, there's some parts of the food you can't produce locally. So, you know,

[00:30:55] even with greenhouses. So I don't think... I couldn't imagine growing bananas in greenhouses. That's... They're too tall. And, well, I mean, I'm not a farmer. I can't comment on that. But there are some products you can... You have to import them to have them. And, of course, in the past, we used to have very seasonal food. Now you go and buy blueberries, you know, it's 12 months of the year and it's a question which country they get exported to you from. But if you want to stay alive, you've got to have the absolute basics

[00:31:23] of both grain crops and fundamental protein crops. And that's what Britain doesn't have right now. So whatever Starman Reeves are doing on the inheritance front, I'm sure the food security is the last thing they're thinking about. Yeah. Lots of good summer fruits, of course. Best strawberries in the world. You know, you won't beat a British strawberry. But, you know, if you have a late spring, then we're buggered on that, basically. In fact,

[00:31:52] I spoke at an AI and agribusiness conference in Bangkok a couple of months ago and one of the key speakers there was a guy who'd perfected absolutely perfect strawberries grown under greenhouse conditions but robotics all the way through to make sure that every last strawberry was pretty much identical to every other strawberry and absolutely delicious. So he charged an absolute premium price. I think the beginning price of his punnets was something like $50 a punnet when the standard strawberries

[00:32:22] were five and he's now heading his way down towards that so he expects, I think it takes a couple of years to hit the point where his industrial absolute quality control strawberries will be the same price as punnets from standard. Right. So that brings us on to the question about, you know, farming versus, you know, intensive farming using alternate techniques to open field farming which is what all agriculture is just about in the UK. But quickly before we do that, so Britain has this trade deal supposedly being organised

[00:32:52] with the United States. Farming will almost certainly be part of that, should Britain? I mean, it looks like if US beef is more expensive and pork is more expensive than it is in the UK, even if you had that open arrangement, it's just not going to be worthwhile for those farmers to export. They'll put their excess onto that and they'll still do it. Right. But if we can buy UK beef cheaper, why would we be buying US beef? Well, you're not producing all of your local beef. I mean, this is, you know, there's going to be

[00:33:21] an element in the market that still enables that to happen. We're eating less beef. What is the issue is US chickens. So, the wholesale price for chicken in the UK is between £8 and £10 per kilo. In the US, it's £2.30 to £3.50. I mean, that's a quantum difference. So, they could flood us with their chlorinated chicken and the chicken industry, the poultry industry in the UK, I mean, would collapse, I would have thought. So, we do need, it's been widely accepted, hasn't it?

[00:33:52] Even though we welcome, you know, supposedly free trade almost everywhere in the Western world now with limitations. The limitation is always agriculture. We have historically always protected our agricultural industry, whether we've done it enough, but it's always been a key focus. I don't think there's any free trade agreement that doesn't have sort of bits that are clawed out for the protection of the agricultural sector. Yeah, look, there's one very important reason for that, which we're neglecting,

[00:34:19] the anti-regulation ethos that has taken over the Trump administration and being replicated globally is ignoring this completely. We're now seeing the long-term impacts of things that we, bringing new products into our consumption that we have no idea what the long-term impact is and like plastics are one of those. Apparently, there's some ludicrous level now. The average human brain has plastic, a substantial, not, it's not going to be grams of the stuff, but micrograms

[00:34:49] of plastic in your brain. So it gets, with stuff which we've just taken for granted as part of the industrial system, has got through all of us and it's going to have long-term impacts upon human health and extremely deleterious ones potentially as well. So a lot of the regulations... You could possibly even start to impact the way you talk. My God, we've all said to Jeremy Clarkson. What a thought. Yeah. That's like, do you remember there was, I don't know if you remember, there was a Monty Python sketch of Wicker Island where everyone was Alan Wicker.

[00:35:19] Everyone was going around talking like Alan Wicker. We could end up with Clarkson's Island, which would be even worse, I think. But anyway, sorry, yes, but I mean, yes, this impact deregulation and the fact that standards are slipping and... American standards are the lowest of all. I mean, chlorinated... What is the chlorine used to do? I mean, I hate to ask to some extent. I don't know. Yeah. I don't know. But it'd be some sort of mass pest control rather than more intelligent methods of doing the same thing. I don't think it's a flavouring. No, chlorine flavoured chicken

[00:35:49] doesn't sound particularly appealing. Yeah. But the drive to the bottom would work if there were no long-term accumulative consequences of this stuff. But there are. to protect, to hang on to your local diversity and to do less damage to the environment. And of course, that's not being thought about at all in this whole focus upon closing a tax loophole. Now, you have in the past talked about how, you know, look at the Netherlands because they export a great deal more food

[00:36:17] than they consume locally. And a part of that is because, of course, the ports in the Netherlands. I think some of it's stuff coming in and going out again, isn't it? You know, the UK is getting its food from Europe through the Netherlands. So whether that gets counted in and counted out. But as you said before, a large part of this as well is greenhouses. But vertical farms, you know, where you're using lamps, LED lighting to try and grow crops, et cetera, is, I read, 10 to 20 times more

[00:36:46] energy per unit of food to open field farming. And greenhouse is, you know, somewhere in between all of that. Obviously, not quite as much because it's, greenhouses are using natural sunlight rather than these lamps. But it's a high energy intensive way of growing food. I mean, that's not a step forward, is it? Yeah, there are attempts to make that look up with, you know, solar panels to collect the energy and so on and make it sort of carbon neutral. But, yeah,

[00:37:15] when I, this conference had plenty of comments about the difficulties of vertical farming, how many of them have failed, they haven't, haven't worked in the meantime. But what I saw from the general group at the conference was that the people who are dedicated to that are gradually approaching the product, the, the, the, the pricelet point of open field farming and with more quality control and less need for pesticides and things of that nature.

[00:37:45] There are no, if you can keep the pests out with a physical structure, you don't need to poison them. So it doesn't turn up on the food either. So there's various ways in which that vertical farming may ultimately mean a lower cost of production, a lower use of energy, not so lower use of energy because you lose the, you know, the fields are obviously absorbing energy from the sun. So we're not, you know, you don't count that as an energy use, but of course it is. Whether they can ever get to the same level of efficiency, I don't know. But one thing about those vertical farms

[00:38:14] and the green housing is that you can set them up in such a way they don't get destroyed by climatic events, which can destroy open field farming. So my main worry is when we start seeing catastrophic climate effects, you know, polar vortex effects with one extreme, absolute heat waves at the other, it's going to be broad acre farming that suffers, whereas the stuff done in greenhouses and vertical farms, given all, even given its other problems, is less likely to be destroyed

[00:38:45] by those effects than by open acre. So I wonder, though, just rounding off, going back to where we started, this idea that we've got farms passed from generation to generation, and if you start to impose an inheritance tax on those farms over a certain level so that those intergenerational farms have to get broken up, if they don't get broken up, isn't there a danger that you won't see these productivity gains? Because they will, the farming community, I don't know, it's an immensely unpopular thing to say for any farmers listening,

[00:39:15] because they'll say, well, we are moving, we are moving with the times, but I mean, there would be a tendency, wouldn't there, to perhaps move at less of a speed if it's just the family farmer who's just doing it the way your dad used to do it, for example. Yeah, and there are also issues about biodiversity, wild plants, the untamed element of the farms as part of maintaining the biosphere. So we may, you could envisage a future where food is produced in moderate,

[00:39:44] semi-industrial methods. Of course, the fact we use fertilizer is industrial. I've seen calculations that if it wasn't for superphosphate, which is made from both nitrogen-fixing technology, but also from fossil fuels, the carrying capacity of the planet wouldn't be 8 billion people, it'd be 1 billion people. So that's, we're still using, in that sense, even our abroad acre is industrial. Now, if we find a, a potential collapse

[00:40:14] in that, caused by climate change, then the element which is maybe less likely to collapse is the industrial, genuinely industrial, where you're doing it indoors as well. So ultimately, food security might move away from farms, and what we might want farms for, in a sense, is to rebuild the natural environment we've destroyed over the last quarter of a millennium. Yeah. Which would be a shame for the countryside. I mean, because rewilding is great,

[00:40:43] but it doesn't look as nice as a farmer's field, does it? You know, it's... Typical British attitude. Well, no, because it's part of the culture of the UK. The English countryside is very much part of the culture. You know, the local farm, the village pub, the local church, which no one goes to because they're spending so much time in the pub. You know, that's all part of, you know, the institution that's been around for centuries. So it's hard to move away from that. That's part of the French argument in favour of maintaining that as well. They want to maintain that lifestyle. And if we elevate the economy

[00:41:13] over everything else, we lose culture. And culture is part of what makes human life interesting. So I'm in favour of those sorts of protections so you can hang on to that part of your culture. But you probably have to do it with the subsidy for farms in reality. I mean, if you're saying, you know, that you can, the productivity is going to come from alternate ways than, you know, established farming, maybe it is being done in greenhouses and we've still got a lot of land left, which is farmland, which is going to produce

[00:41:43] stuff in a less effective way or produce certain crops that can be grown outdoors but are perhaps not quite as profitable. You are going to need to subsidise them. Potentially. But this again comes down to food is not just an economic issue. You know, if food gets too expensive you can always eat steel. No. You know, you have to have that absolute guarantee that you can feed your population. If you can't do that your society will collapse. So on that front, given what I expect to happen about global warming,

[00:42:12] I'd rather see ways to encourage people to stay on the farms and increase the amount of food being produced in the UK. And as I said, I'm sure that Starmer and Reeves' ideas have got nothing to do with long-term sustainability. Yeah. Well, first thing they can do is go to France, isn't it? Learn whatever quick wins they can get from the way France is doing it. Britain learning from France hasn't worked out all that well in the past. Well, maybe it's time to put old...

[00:42:42] All the rivalries apart. Yeah, maybe. Yeah. All right. Very good. Well, I certainly enjoyed talking to you today and finding a solution to what seems to be one of the great quandaries of the planet. And yeah, watch Clarkson's Farm. It's hilarious. And yeah, we'll catch you soon. Thanks, Steve. Okay, man. Bye. The Debunking Economics Podcast. If you've enjoyed listening to Debunking Economics, even if you haven't, you might also enjoy

[00:43:12] The Y Curve. Each week, Roger Hearing and I talk to a guest about a topic that is very much in the news that week. It's lively, it's fun, it's informative. What more could you want? So search The Y Curve in your favourite podcast app or go to ycurve.com to listen.