Global warming and navy beans: Decision making by farmers and food companies in the U.K.

Journal of Rural Studies, Vol. 13, No. 3, pp. 343-355, 1997 © 1997 Elsevier Science Ltd Printed m Great Britain. All rights reserved 0743-0167/97 $17.00 + 0.00

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Global Warming and Navy Beans: Decision Making by Farmers and Food Companies in the U.K. L. E. Holloway and B. W. Ilbery* Division of Geography, Coventry University, Priory Street, Coventry CV1 5FB, U.K.

Abstract - - Farmers are continually adjusting their business enterprises in response to the shifting economic, political and social pressures which affect each aspect of their production. These adjustments may include structural changes, agronomic (production) changes or moves into 'diversification' enterprises, and are manifest at different scales, from the farm unit to changes in a country's or region's agricultural structure. One factor influencing future changes in agriculture is likely to be climate change ('global warming') which will alter the physical environmental conditions of production. The consequences of this might include a change in the crop species cultivated in different areas. This paper examines the responses of farmers in part of southern Britain to the possibility of growing navy beans, a crop used for baked bean manufacture and obtained almost wholly from North America, as a response to a warmer climate. The paper seeks to explore the network of relations at the farm, national and international scales which will determine the likelihood of commercial adoption of the crop occurring in the U.K. Through discussion of the results of interviews with farmers, food processing companies and associated agencies it is concluded that there are significant structural barriers to the adoption of navy beans as a diversification option on U.K. farms as a result of international trade restraints and a measure of inertia and risk aversion within the processing companies. © 1997 Elsevier Science Ltd

through the adoption of new agricultural or nonagricultural enterprises (Ilbery, 1991). This paper uses the case study of a possible opportunity to begin production of navy beans to explore the complex set of factors which may influence a farmer's decision making process when he/she is considering an alternative crop. Navy beans, used almost exclusively in the production of baked beans in tomato sauce, are not grown commercially in the U.K. at present due to insufficient levels of thermal receipts during the growing season. It is expected, however, that climate changes due to 'global warming', as predicted by most climatologists (see, for example Houghton, 1991; Intergovernmental Panel on Climate Change, 1992), will lead to conditions suitable for the production of the crop in parts of southern England (for a detailed discussion see Dodd, 1991; Holloway et al., 1995). It is important to note at the outset that the adoption of navy beans (or any other alternative crop) does not have to be a

Introduction

Diversification of the farm business through the adoption of a new crop may be one solution employed by U.K. farmers in their struggle to maintain economic viability in the face of the current period of restructuring being experienced in West European agriculture. Largely as a result of a production-oriented European agricultural policy there has been a 'crisis' of overproduction of some basic agricultural commodities leading to the enforced removal of land from production. Similarly, the negative associations of intensive farming with environmental damage and landscape change are causing farmers to have to comply with a degree of environmental legislation. A response of some farmers has been to diversify their farm businesses *Author to whom correspondence should be addressed. 343

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L.E. Holloway and B. W. Ilbery

necessary response to climate change because conventional crops may be less viable under a changed climatic regime; rather adoption is contingent upon a wide variety of factors, just one of which may be the reduced viability of conventional crops, and indeed navy beans may simply become just another production possibility. Other factors will emerge from the following discussion. Studies of the effects of climate change on agriculture have concentrated mainly on the biological impacts of a different temperature on crops and on the resulting suitability of crops for different geographical areas (see Smit et al., 1989; Parry, 1990), and have in this sense been rather mechanistic in assuming a direct agronomic response to altered climatic conditions. Exceptions to this include work on human interaction with climate change (Smithers and Smit, 1995) and work by Smit (1994), who has suggested that the very nature of systematic geographical study means that geographers should play a leading role in the assessment of the impacts of climate change. Nevertheless, most of this type of work has been concerned with setting up frameworks for analysis rather than with specific analyses of particular crops and particular farmers in unique circumstances. In particular there has been little contemplation of the decision making of the farmer as an individual. Chiotti and Johnston (1995) have stressed the need for an approach which considers the structural, economic, social and behavioural aspects of change in farming through, for example, an examination of the effects of climate change on agricultural restructuring processes. This type of 'integration' approach is also found in the work of Crosson and Rosenberg (1993) and Rosenberg et al. (1993). Crosson and Rosenberg (1993) have been concerned with developing a regional approach to adaptations to climate change, through a consideration of spatial and temporal variations in the effects of global warming along with a recognition of the complexity of farming systems and the integrated nature of regional economies. In this way a degree of local specificity is accommodated although the implicit boundedness of a region may be problematic. A precursor to this paper, that by Rosenberg et al. (1993), suggests the need to explore the non-climate change 'base-line' changes occurring in a given agricultural system (e.g. adjustments due to agricultural 'industrialisation') before 'adding-in' a climate change scenario as an extra variable which will have complex effects on pre-existing trends. What these studies do not tend to consider are the context-specific situatedness of individual farmers and the importance of the changing and negotiable relationships between farmers and, inter alia, food processing companies: the variability of these rela-

tionships may be reflected in changing spatialities of production which would imply that a strictly regional approach is inadequate. For the crop considered in this paper at least, changing local, national, European and global relationships impinge on the adaptation processes which may develop on individual farm units. We have, however, worked with the suggestions of Crosson and Rosenberg (1993) and Rosenberg et al. (1993) in our consideration of the changing structural base-line of the farming system being studied and in concentrating on a detailed examination of one area of southern England as a 'region' which may be affected by 'global warming'. Some of the initial reactions of farmers to climate change and the adoption of the new crop are presented elsewhere (Holloway and Ilbery, 1996). The current paper intends to widen the perspective to examine the broader array of influences on new crop adoption (and hence a changing geography of agriculture) through placing 'the farm' in a structural context of policy, economics and power relations which may provide resistances to change beyond that of the farmers' concern with the risk involved in adoption of a new crop under a changing and uncertain (physical and economic) production environment. The results of a questionnaire presented to farmers will be discussed along with information derived from informal interviews with senior representatives from companies which manufacture baked beans and also from research and policy agencies. In adopting such an approach, the often implicit assumption that climate change will determine a change in the geography of agricultural production is avoided, and an assessment of first, the nature of the processes of agricultural, change without climate change and second, the nature of the constraints placed on farm-level adjustment, can be made alongside a consideration of the farmers' individual attitudes and responses to threats to and opportunities for their farm businesses. A recurring theme in studies of agriculture over the last decade has been the economic subsumption of individual farm units by external capitals both upstream and downstream of the farm itself (Marsden et al., 1986). This subsumption has been mainly formal in nature (Pile, 1992), leaving the farmer formally in control of on-farm production but increasingly constrained in his/her farming by external capitals with which the farmer has entered into relations, for example through the medium of contract agreements or by debt to a bank. In such relations, the individual farmer is generally subordinate to the demands and restrictions of the organisation, and it is recognised that there is a process of (unequal) negotiation between the farmer and 'capital' (Ward and Munton, 1992) in that the

Global Warming and Navy Beans farmer has a degree of freedom (albeit constrained by the necessity for economic reproduction) in what and how relations are developed. It has been demonstrated (for example by Marsden et al., 1986) that the continuing processes of subsumption have resulted in generally lower returns to the farmer (despite a favourable policy environment) due to, for example, high input costs and decreasing prices which have obliged farmers to attempt to raise incomes through a range of restructuring strategies which include intensification, specialisation (Bowler and Ilbery, 1987), increasing farm size to spread capital costs, producing under contract with a secure price (Hart, 1978), and the adoption of new enterprises - - diversification (Evans and Ilbery, 1989). According to Slee (1986), diversification includes the adoption of crops which are not supported under the Common Agricultural Policy (CAP), and this allows the adoption of a crop such as navy beans to be seen as a form of diversification. Nevertheless, in the same way that external agencies have a large and increasing leverage on conventional farm production, there is the potential for agencies to similarly exert influence over the adoption of new crops, both in terms of if and how the potential enterprise is initiated. Adoption of a new crop (or, equally, any other diversification enterprise) may thus depend far more on the attitudes of decision makers within organisations external to the farm than on the attitudes of the farmer or even on potential climate change.

Navy bean production in the U.K.: the farmer's view The selection of navy beans as a case study was influenced by the crop's suitability to fit into a conventional arable system of crops which can be harvested with a combine harvester, by the fact that some research into the suitability of the U.K.'s physical production environment had already been carried out (Dodd, 1991), and by the fact that navy bean production is closely linked to 'downstream' food processing companies which obtain their supplies through an (indirect) contracting system (see below). The U.K. currently imports virtually all of its navy bean requirements from North America (the U.S. and Canada) and there would therefore appear to be an opportunity for U.K. farmers to grow an import-substituting crop given the requisite rise in average daily temperature during the crop's summer growing season. A sample of 80 farmers with some arable land in northern and central Hampshire was generated using the 'Yellow Pages' telephone directory (see Fig. 1). This area had been indicated as potentially thermally suitable for navy

345

bean production under a conservative estimate of an average daily temperature rise of 0.5°C (see Intergovernmental Panel on Climate Change, 1992; Holloway et al., 1995; Fig. 2). The farms in the sample were a mixture of specialised arable units and mixed arable and dairy/livestock farms. Farm sizes varied between 35 and 1215 ha, with a mean farm size of 318 ha. This figure is substantially larger than the U.K. average farm size (just under 61 ha in England; MAFF, 1995), emphasising the nature of the area as one of relatively large scale arable production. Arable crops were relatively more important the larger the farm, with dairying a more important factor on smaller units of less than 200 ha. The preliminary findings of a questionnaire survey of these farmers, reported in Holloway and Ilbery (1996), can be summarised in three points. First, the majority of farmers in the sample (77.5%) said that they would consider growing navy beans; the main reason for acceptance was that the crop would be a good, leguminous, alternative break crop (and it is interesting in this context to point out that those farmers who had stated that they took a scenario of 'global warming' seriously were more likely to respond positively to the idea of growing navy beans than those who had not, 87% and 77%, respectively). Second, farmers would require good marketing facilities, a high gross margin and a contract to produce navy beans. This latter requirement is significant here because it suggests that, to a large extent, the commencement of navy bean growing would depend on the willingness of U.K. baked bean manufacturers to obtain some of their supplies of navy beans from the U.K. Third, farmers considering the crop would naturally expect advice and information on production and they expect this to be given free from the contracting agency. This paper moves to a wider consideration of the responses to the idea of navy bean production on U.K. farms from the farmers themselves and from those agencies with an interest in the concept. The 58 farmers who expressed an interest in growing navy beans were asked to assess the difference the crop would make to various aspects of their farming. These aspects were diverse and covered basic agricultural factors through to 'status'. The answers were categorised and are illustrated in Table 1. The table indicates that the great majority of farmers believe that the introduction of a navy bean crop would have little significance in changing the fabric of their businesses. This concurs with the idea expressed by many farmers that the crop would fit well into their existing farming patterns. Equal numbers of farmers thought that equipment purchase (of a combine 'stripper header' and in two cases a precision drill) and using contractors to bear the cost of the additional equipment would be

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L.E. Holloway and B. W. Ilbery

necessary. Only nine thought that variable costs (especially fertiliser but also pesticides/fungicides) would be reduced, despite the fact that the navy bean is a low input break crop. These nine farmers, when asked, considered replacing a high input break crop (e.g. oilseed rape) or cereals with the beans. Of the relatively large number of farmers who said that they expected an increase in profits, many qualified this expectation by saying either that they hoped this would be the case or that they would not grow the crop unless it was the case: one saying that 'it had better do!'. There is an element here of 'rational' behaviour echoed in the concerns of processing companies to obtain raw materials from the cheapest source without sacrificing reliability of supply (see below). Spreading the labour load more evenly seemed to be quite important, with 16 farmers saying that this would be advantageous, although two others thought that the late harvest of navy beans would interfere with soil preparation for following cereal crops, and may even be too late to allow the drilling of a winter cereal. Increasing the economic stability of the farm also seemed to be quite important, with 21 farmers saying that they thought a navy bean crop would do this, with some mentioning the benefit of spreading risk over a

\

larger range of enterprises: this is important in a consideration of negotiation with external capitals - - the farmers are clearly willing to trade independence (through the necessity of having a contract) for some increase in economic viability. Farmers were encouraged to suggest other conditions or factors which would encourage them to grow navy beans. The comments offered could be categorised as either 'needs' for the potential success of a crop, or 'contextual' thoughts about favourable circumstances for navy bean production: the comments, while not necessarily representative, can be seen as suggestive of several key idea, and do illustrate how differently situated farmers respond to a scenario of change.

Needs

Four types of 'need' were identified: (1) Three mentions were made of climatic conditions. Two stressed the importance of this factor: viable navy bean production 'depends

Basingstoke

Test Valley

East Hampshire

• Winchester

0 I

5 I

!

(kin)

Figure 1. The Hampshire fieldwork area.

10 i

!

Global Warming and Navy Beans entirely on climate' and relies on 'just the climate' (although as will be discussed later such simplification may be out of place). The third stated that dry conditions at harvesting were necessary to prevent staining of the crop. (2) Agronomic issues were considered important by many potential growers. Of these, the fact that the crop tended to have a low growing pheno-

347

type (and that improvements to this would aid harvesting of the mature crop, particularly on stony soils), was frequently mentioned. A more erect, higher standing crop would be beneficial. Other issues were mentioned by individual farmers. These included a requirement for research into appropriate rotations and disease patterns; the response of the crop to alkaline

Above 2050

l

1900-2050 1750-1900 I

Below 1750

o

lOO

t

I km

Figure 2. Ontario Heat Units (OHU) in the U.K. for a climate on average 0.5°C warmer than at present. (The white areas would be thermally suitable for navy bean production under this climate regime.)

348

L. E. Holloway and B. W. Ilbery Table 1. Navy beans and changes to farm structure and viability

Equipment requirements

None Stripper header

Change in total labour requirement 35 8

Drying equipment

1

Use contractor Use co-op Don't know

8 I 5

None Reduce

Don't know

Change in seasonality of labour requirement

52 None 1 Spread due to late harvest Clash with drilling Extra required 5 Don't know

Change in farmer status

34 16

2

None Increase

Decrease r

1 5 Don't know

Changes to fixed costs

51 4

None Increase

Changes to variable costs

49 5

None Reduce

Changes to farm income

45 9

1 Don't know

4

2

Don't know

4

None Increase

Possibly Increase Don't know

Change in farm economic stability

29 24

2 3

None Increase

Possibly increase Don't know

33 21

2 2

N = 58, column totals may exceed this where more than one response was given. soils; a link with bird pest control as these were experienced with other bean crops; weed controls and the need, in terms of quality control, to 'ensure workers know why it is important to do certain things in a certain way'. (3) Understandably, prices and profitability emerged as being major factors in farmers' attitudes towards navy beans. These depend to a large extent on the 'external' political economic situation, stressing the importance of external agencies in agricultural change and adaptation. Three mentioned that EU subsidies would make the crop more attractive since an area-based subsidy would smooth out profit variations caused by possibly highly variable yields. Two of these three, and one other, suggested being able to grow the crop on set-aside land as is possible with some industrial crops at present (although as navy beans are clearly a food crop such a concession would be unlikely). Navy beans would not currently be eligible for area aid subsidies unlike similar pulses such as field beans and dried peas. Similarly, a guaranteed price would make the crop much more attractive. A farmer who mentioned this stated that if there was a guaranteed price then he would grow 100 acres (40 ha) of beans: this was about 9% of his arable area and would represent a considerable alteration to his farm business structure. Another farmer was keen enough on the idea to say that he would take on extra land for navy beans if the economics were right. A relatively high gross margin was a requirement for some farmers, although many simply said that a margin higher than other break crops would be satisfactory. Comments were also made with regard to other crops. Two respondents said that continued decline in prices for cereal crops would make navy beans more attractive to them. Comparison was made by another farmer with the returns on a second wheat crop for the same acreage, saying that that would influence his decision of whether or not to grow navy beans. Farmers are, therefore,

concerned to assess the viability of navy beans relative to conventional crops which may of course be varying in profitability themselves. (4) Miscellaneous. Two farmers specified the benefits of using navy beans as a break crop in a rotation. One said that using navy beans would help the move away from second wheat crops, the other that beans would be a better break crop than linseed as they are easier to grow. One farmer thought that improved storage and handling conditions would be necessary to ensure a crop of high enough quality. Finally, one potential grower said that the crop would be more attractive if it was beneficial to game and wildlife.

Context Again, four types of comment were apparent: (1) Relations with current suppliers were mentioned by three farmers. One said that attempts to supplant the U.S. crop by a U.K. grown one would 'upset' the U.S., and this might mean that the crop was politically unacceptable. Another suggested that the U.S. suppliers would be able to reduce their prices sufficiently to compete. These comments recognise the potential for constraints to be put on U.K. navy bean construction through political agency applied from outside the farmer-processor relationship. The third thought that trying to grow an import substitution crop was actually an advantage. (2) Several comments were made in association with the market for the crop. This was summarised by one farmer who said that the 'correct financial and political preconditions' were essential. Two farmers recognised that a good market existed for the crop in the U.K., whilst another was more cautious and said that a niche in the market had to be ensured before serious U.K. production could commence. The market (in

Global Warming and Navy Beans this case a very few large scale processors) has very tight specifications for an acceptable crop, and one reply suggested caution in trying to supply such a market as the crop is 'no use if below par'. (3) The importance of contracts and cooperatives will be discussed later, but a few comments were made here which preempted that section. One farmer said that he imagined that a system similar to the one used for vining peas would come into operation, with a cooperative to market and sell the crop, and a system of staggered harvesting using different varieties (see Holloway and Ilbery, 1996, 1997 for a discussion of vining pea production). Another said that co-operation would allow the purchase of specialist equipment such as stripper headers. According to a further farmer, the crop requires 'a decent contract with a decent return'. The importance of having a reliable, assured outlet was also stressed. It is thus recognised that new relationships with 'external' agencies will be important in commencing navy bean production. (4) One farm manager made some interesting remarks regarding the European context. He said that the U.K. government wouldn't promote the crop, so it would be grown in other European countries. The multi-national food processing companies would simply go to where supplies were cheapest, and he suggested that this would be likely to be in areas like Eastern Europe or the Ukraine where there were large areas of good land which could be readily exploited. The manager also said that hc could see the same process happening for other crops. He continued by saying that the opportunity was there for U.K. farmers to grow the crop, and suggested that navy beans could be made more viable by attempting to grow them under plastic. There is implicit recognition in the above paragraphs of the great significance of 'external' influences in a consideration of U.K. navy bean production by individual farmers: growing navy. beans in the U.K. is reliant on a particular set of contingent external circumstances. These include relatively "local" factors such as the attitude of baked

349

bean manufacturers but extend to consideration of the global nature of the navy bean supply system. These important issues are considered further below.

Farmers and the relationship with contracting agencies From the preceding section it is clear that accounts must be given of the nature of the relationship between farmers and processors and of the attitudes of processors and associated agencies towards the possibility of U.K. navy bean production. The sampled farmers were asked whether they produced any other crops under contract. Interestingly, a much greater proportion of farmers who had indicated that they would consider growing navy beans than those who would not consider navy beans already had contracts to produce other goods: 91% and 30%, respectively. The former group consists then of farms already further tied in to the food production system, which might in turn engender a more positive attitude towards change in the first place and production of a new contracted crop in the second. Table 2 shows the reasons given by farmers for being prepared to 'negotiate' with capital through contract production. The table also shows the perceived negative aspects of contract production which might act as constraints on adoption of the crop. The most common factors are those connected with the market, that is, having a guaranteed outlet and income on the positive side, but not being able to take advantage of a situation where market prices are high on the negative side. Eight farmers mentioned the risk of a contractor going bankrupt and thus being unable to pay for crops already delivered. This issue may have been so significant because a local contractor had been bankrupted just prior to the period when interviewing was carried out, and some interviewees had been adversely affected by this in terms of lost income. Having a contractor-defined set of cropquality criteria invites two types of comments. Some producers see it as an advantage to have defined criteria to work towards. Others claimed that

"lhble 2. The advantages and disadvantages of contract production Advantage Known market Known price Eases planning Reduced risk Known specification

Frequency 40 29 10 9 4

Disadvantage Cannot play the market Loss of independence Risk of crop rejection Contractor may go bankrupt Tight crop specification

N = 80, the total number of answers exceeds this as many farmers mentioned several items

Frequency 32 12 7 8 3

350

L . E . Holloway and B. W. Ilbery

product specification was often too tight, in some cases to allow contractors to escape contractual obligations on grounds of quality when they had acquired enough product (indeed, when asked to consider terms which would make navy bean contracts acceptable to them, several farmers specified that a degree of flexibility in bean specification would be required).

usually qualified this by saying that a ('free') market would have to be in evidence first and that the crop would have to be demonstrably viable. One farmer said that he would be prepared to risk growing without a contract if the crop could be produced on set-aside land, and another simply shrugged and stated that he would grow without a contract although this would be 'high risk farming'. Two further reasons for contract production were supplied: one farmer said that a contract would ensure a good quality seed supply and another said that navy beans were a 'strange crop' needing the security of a contract. Several farmers mentioned that they would prefer to deal with a smaller scale merchant (as a middle man) rather than with a centralised buyer, and indeed this would be the supply situation required by baked bean manufacturers (see below).

Potential adopters were asked if they would only produce the crop if a contract could be obtained. The great majority (88%) would require the security of a contract before commencing navy bean production: only a few farmers would consider production without a contract, with the associated risks that this would involve. For most farmers the important point is to have an assured market: they need to 'know you can get rid of them', especially initially at the 'experimental' stage, before the crop is an established one. Because a free market in the crop does not exist, then these farmers cannot afford to do other than grow to contract. The crop is an 'unknown quantity' and farmers 'can't grow (it) on spec'. Several farmers mentioned that a contract would reduce risk and increase farm stability. According to one farmer, a contract would be 'essential, you cannot accept a failure, all fields must perform' and another said that he would 'plant nothing that isn't pre-sold' anyway. Other reasons given were to prevent market flooding, the fact that 'the future is uncertain', the specialised nature of the crop and the ability to obtain free information and advice from the contract issuer. Farmers who said that they would produce without a contract

The same group of potentially adopting farmers was asked what they would require in a contract, and what contractual conditions they thought might be imposed on them. Tables 3 and 4 show the range of answers. In terms of what growers would like, by far the most important consideration is price, not simply its level but also associated terms such as reasonable expectations of quality on the part of the contract issuer so that the crop is unlikely to be rejected, the need for a fall-back clause in case of a sub-standard crop, and payment for growing a certain area rather than supplying a certain tonnage, which would reduce the risk for the grower of a poor harvest. One farmer mentioned that he would require 'a cast iron guarantee (from the contractor)

Table 3. Contractual conditions preferred by farmers for navy bean production Condition Fixed, fair price Guaranteed outlet Good advice Known payment date Reasonable quality terms Fail-back clause for slight sub-standard crop

Frequency

Condition

Frequency

32 17 12 9 8 7

Definite specification Good seed supply Premium price A degree of freedom Pay by area not quantity Quality bonus available

6 3 3 2 2 1

N = 58, although the total number of answers exceeds this as many farmers mentioned several items.

Table 4. Contractual conditions thought to be required by processors for navy bean production Condition Competency (good track record) High agronomic standards (e.g. low disease levels) Guaranteed quality Instructions to be obeyed Good handling facilities

Frequency

Condition

Frequency

17 11 10 9 9

Honesty/reliability Commitment to grow a set area Commitment to the crop Flexibility

5 4 2 1

N = 58, although the total number of answers exceeds this as many farmers mentioned several items.

Global Warming and Navy Beans not to wriggle out on quality'. This is especially important for a newly commercial crop where both farmers and their advisors would be going through a learning process. Farmers also recognise the importance of having the contractor guaranteeing to take the crop and provide the right instructions on production. In terms of what growers thought processors would require, it was felt that crop quality issues would be those most significant to a contract issuer: the correct quality would result from competent high-standard farming, and farmers believed that contractors would assess farms on their previous production standards. Additionally, farmers were asked whether they thought that they would experience any problems obtaining a contract to grow navy beans on their farms. None did.

Food processors and the constraints on U.K. navy bean production

The powerful influence on farming (including the adoption of a new crop) of downstream foodprocessing agencies is evident from the discussion above. A detailed report of discussions' with such agencies, presented below, reveals significant barriers to the adoption of navy beans. Two important points can be made about these barriers: first, they are ones which were not recognised by most of the farmers in the sample (most farmers seemed to accept that if they wanted to grow the crop then they could do so); and second, there is shown to be a set of constraints acting on the processors themselves. These latter constraints are of an international structural nature and cast serious doubts on the possibility of commercial navy bean production in the U.K. The discussion below presents information from first, interviews with spokesmen from processing companies, second from the Processors and Growers Research Organisation, and finally from two 'political/advisory' agencies, the National Farmers Union (NFU) and the Agricultural Development and Advisory Service (ADAS). Navy beans are seen as a commodity crop by food processors, that is, the manufacturer is free to buy from whoever can supply the correct quality bean at the lowest price, although, importantly, one of the representatives said that the crop was becoming a more specialised one grown for a niche market and becoming less of a commodity. The U.K. imports from the U.S. (Michigan, Minnesota and North Dakota) and Canada (Ontario), which produce about 300Kt between them and export about 170 Kt, of which the greatest bulk comes to the U.K. Baked bean manufacture in the U.K. is concen-

351

trated in just five companies, with one of these a small scale producer of catering trade product and the largest one responsible for approximately 50% of navy beans imported into the country. These companies supply both branded and supermarket 'own label' product. One representative said that North American navy bean growers average 1300 lb acre ~ (1.5 t ha '), the other differed slightly at 12.5 cwt acre -~ (1.6 t ha-~), but the important point is that yield varies widely on an annual basis, having significant impacts on commodity price. In a bad year for yield, only 2 cwt acre-~ (0.3 t ha ~) may be produced, while a good year may see crops of 3000 lb acre -I (3.4 t ha J). Prices paid by one of the companies thus fluctuate between $60.00 per 100 lb bag (£826.73 t ~) in an exceptionally bad year when there is a crop shortage and $11.50 per bag (£158.46 t )) in a good year when there is a good supply. 'Typical' prices tend to be around $22.00-$23.00 per bag (£303.14-£310.02 t--l). Such fluctuation in price may cause problems for U.K. farmers starting to produce the crop, but there may be the potential for U.K. producers to be able to undercut North American prices when American yields are low and prices are high: this situation may arise more frequently if global warming has a negative impact on North American navy bean production. This situation of changing and variable comparative advantage is something that will warrant further research as the effects of climate change become evident. The U.K. baked bean market is seen as static ('flattish') by manufacturers. The product is price inelastic, that is, fluctuations in the retail price of baked beans have little impact on sales volume. The impression given by the manufacturers towards utilising a U.K.-grown navy bean crop is one of cautiously optimistic acceptance. However, they have serious reservations about reliability and economic feasibility, and thus about the realisation of U.K. production. As one of them said, the current U.K. climate is too cold at planting (May), which adversely affects germination, and too cool during summer, preventing full ripening before damp autumnal weather at harvest in September. The crop needs moist conditions at planting, a subsequent period of dryness and warmth, and it is essential that the harvest period is dry and warm. The processors doubt that these conditions could be met consistently in the U.K. even under a warmer climate and therefore would proceed slowly in supporting U.K. growers, especially as a reliable source (which is highly unlikely to fail) already exists in North America. The attitude is summed up by two statements from the processors. One said that 'if U.K. farmers can grow them, we will look at them, but I feel they've got a long way to go'. The other said that he thought

352

L.E. Holloway and B. W. Ilbery

U.K. beans could be part of their business, and 'would be happy to see U.K. navy beans, but I have serious concerns about year to year variability, and they are not yet economically viable'. Nevertheless, one of the processors had taken in a small volume (2 kg) of U.K. experimental navy beans that year (1994/1995) which, the representative claimed, had been similar to North American beans in quality and had 'canned well'. One of the manufacturers said that 'the cost of growing them here is horrendous' and the crop would require a subsidy to make it viable: the spokesman said that this was undesirable as they would end up paying for the subsidy. The other agreed but thought that if production costs could be reduced, and if subsidies were available for navy beans, the crop could be commercially attractive and could compete successfully with North American beans. He gave two sets of figures to illustrate this. First, if subsidised as other pulses are under the CAP, navy beans could be financially more attractive than similar break crops, despite higher variable costs (see Table 5). However, the table also illustrates that without the subsidy the crop is much less profitable than similar crops. The representative said that U.K. navy beans were 'currently uneconomical, but if the EC (sic.) were to amend its support schemes they could be made economical and more profitable than similar crops'. The same person gave another financial reason for promoting U.K. navy beans: a reduction in freight costs that would be greater than any extra costs incurred in growing the crop in the U.K. Transport from North America to the U.K. processing plant costs approximately £65 t J and the representative thought that about £50 of that resulted from transAtlantic shipping costs. In theory then, if U.K. growers can supply at a cost of less than £50 t ~ more than the price paid for U.S./Canadian beans then there would be a financial advantage to U.K. processors in buying U.K. beans. This still relies on CAP subsidies being applied. The representative thought that other EU countries could also produce navy beans and, especially in southern Europe, could produce a better crop for less input than the U.K. Similarly, Eastern Europe

(e.g. Hungary or Romania) has large expanses of land available and the advantage of possible economy of scale. However, freight costs rise immediately water has to be crossed and the infrastructure doesn't exist in Eastern Europe to be able to guarantee graded, clean beans. 'The only U.K. in-built advantage then is close proximity without a sea barrier', and there is the distinct disadvantage that manufacturers might have to double contract (with both U.K. and North American suppliers) to ensure continuity of supply, with the risk of having to purchase far more beans than necessary. An important final point was made by one of the processors. This is that there is officially an import duty on navy beans of between two and four per cent of the import price, although this has been suspended on a year by year basis for the last ten years on the grounds that there are no reliable EU suppliers. If EU production started, then the duty might be imposed, costing manufacturers additionally to import North American beans. The representative said that this could cost his company an extra £750,000 per annum unless EU beans were utilised. It may be that the willingness of the EU (or U.K.) policymakers to impose duty (and/or subsidise production) will depend to some extent on the need to encourage or facilitate navy bean production as a replacement for crops which become less viable in warmer climatic conditions. Two further points arose. First, a considerable area of land would be needed to be devoted to navy beans if a viable industry were to exist in the U.K. One of the processors suggested 150,000200,000 acres (60,704-80,938 ha). This would imply co-ordination between growers, particularly as average farm size in potential navy bean-growing areas in the U.K. is much smaller than average farm size in current navy bean areas in North America, and this alone might be a strong barrier to adoption of the crop in the U.K. Secondly, due to climatic differences, the method of harvesting would have to be different in the U.K. from North America. In the U.S. and Canada, the crop is cut and laid in windrows to dry, before being picked up by a combine. Because the U.K. is cooler, the crop would of neces-

Table 5. Potential navy bean gross margins (subsidised and unsubsidised) compared with other break crops (£ ha ') Dried peas

Field beans

Navy beans (no subsidy)

Navy beans (subsidised)

Subsidy (area payment) Crop value Total income Variable costs

365 420 785 200

365 400 765 180

0 500 500 230

365 500 865 230

Gross margin

585

585

270

635

Source: spokesman for a major food manufacturer.

Global Warming and Navy Beans sity be harvested straight into a combine fitted with a stripper header, and the beans may require drying in storage, adding to the cost of production. None of the baked bean manufacturers operates by issuing contracts directly to farmers or farmers' groups. Because of the nature of the crop, that is, it is harvested dry and can be stored so that processing into baked beans can take place all year, a North American based 'middleman' (elevator company) operates between farmer and processor. The processor requires a weekly supply to be available from the elevator company, and themselves carry very little stock. The processors would not, then, be prepared to issue contracts directly to U.K. farmers either, but would require another agency, either existing and being prepared to diversify or to be established, to carry out the functions of North American elevator companies. These functions are threefold. First, it is the elevator company which contracts a farmer's production. Typically the company contracts to take half of the yield of a specified area of land at a fixed price. The farmer is free to sell the rest on the open market, but in practice tends to sell the second half of the crop to the same elevator company but at a variable price (the situation in Ontario is different, in that production is controlled by a national board rather than by contract). The second function is crop storage and care. In North America, the beans are stored in 100' (30 m) high grain elevators each holding approximately 1000 t. The company will either dry and clean the crop and sell it relatively quickly, or will store the beans until the price rises. Storage conditions are important and beans are kept at a moisture content of between 13 and 18%: less than this leads to cracking and more to the growth of moulds. There would need to be, therefore, a high capital investment involved in drying and temperature control before navy beans could be grown in Britain. Further, additional storage facilities may be required (either on farm or with the 'middleman') as the beans need to be kept isolated from other crops and substances as 'beans are notorious for picking up taint'. The final function of the elevator company is to arrange shipping from North America to the U.K. The manufacturers pointed out that the correct facilities do not exist at present in the U.K., and that this sort of expensive infrastructural development would be necessary before commencing commercial production of a U.K. navy bean crop. The Processors and Growers Research Organisation (PGRO) is an independent research institute concentrating on vegetable crops grown for processing. A spokesman from the PGRO thought that navy beans are or will be agronomically viable in the U.K., especially under warmer climate conditions

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and if good September weather could be guaranteed. However, political and economic considerations will make their commercial adoption unlikely. This attitude underlines the relative insignificance of the physical agricultural environment when compared to the influence of the political-economic structure. Several of the points made echo and reinforce those of the manufacturers. The PGRO has been jointly involved, along with a major supermarket, in the recent experimental production of navy beans in Hampshire and Essex with some success: a harvestable crop was grown but the production process was not economically viable. Navy beans, along with other Phaseolus beans, are not eligible for area aid under the Integrated Administration and Control System (IACS) formula and, without such aid, are not commercially viable. The spokesman thought that this situation was due to pressure from the U.S. and Canada which both export large volumes of navy beans and other Phaseolus varieties, and that if, as he suspects, a political deal has been struck to discourage navy bean production in the U.K., then it is unlikely that production will commence. Further, U.K. farmers have consistently been told by government agencies that they are not able to grow the crop in this country. The issues raised by the NFU and ADAS were in many respects similar to those raised by the manufacturers' and PGRO spokesmen. However, both were more pessimistic than the previous agencies. Agronomic difficulties were mentioned by both, including poor September weather and low plant growth resulting in the inclusion of too much dirt with harvested beans. Dirty beans are valueless: the farmer 'almost pays to get rid of them', so it is important to maximise the production of tradable beans. Cleaning the beans, or separating clean from dirty samples, is prohibitively expensive. Global warming would need to be accompanied therefore by genetically 'improved earliness and plant habit' (i.e. an earlier maturing, taller, more erect plant) and, according to one of the agencies, such improvements are currently being made. Again, however, the political and economic situation is of overriding importance, and in particular the ineligibility of navy beans for Area Aid payments. Both agencies agree that production is not viable without subsidy, but that subsidy is unlikely to be forthcoming due to political pressure from the North American source countries. Indeed, 'it is not clear whether the inclusion of navy beans would be GATI'-legal', and any attempt to award Phaseolus beans a subsidy in the EU would result in a GATT panel inquiry, which, according to one spokesman, would be lost by the EU. There is the further issue that, with aid, navy beans are likely to be relatively profitable (see

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L . E . Holloway and B. W. Ilbery

Table 5) and thus may not simply displace other pulse crops: they may also displace cereals (and 19 farmers had indeed said that they would replace some cereal acreage with navy beans). One of the spokesmen said that this would have (unspecified) budgetary implications. Without aid, the only way to make the crop viable is through significant reductions in production costs, in particular the cost of seed.

Discussion and conclusions

Many farms in the sample are currently undergoing structural change and it is within this context that ideas about global warming and navy beans must be accommodated; it is not sufficient to assume that changes in farmer behaviour will occur deterministically in response to global warming as would conventionally be suggested by climate/agri-ecosystem modelling procedures. The major changes identified from the Hampshire sample were first, changes in inputs (for example a general decrease in nitrogen applications); second, a general increase in farm size; and third, the introduction of various (agricultural and non-agricultural) diversification options. This third change is important because it demonstrates that, in principle, farmers are receptive to the idea of growing alternative crops; the introduction of a navy bean crop would not, then, be simply a response to a warmer climate, but would be part of an ongoing process of change, itself strongly influenced by external agencies, and it may be difficult to assess just how big a part a response to global warming by farmers will play. It is apparent that food processing companies will heavily influence the direction of change in agricultural production, and this must include change in response to climate change. Most farmers in the sample (89%) thought that the influence of processors (and also retailers) will increase, and that this influence will widen to include crops other than those traditionally grown under contract. It is likely then that farmers' opinions towards production of navy beans will be subsumed by the opinions of structural agents. Farmers may be keen to grow navy beans, but unless processors are willing to contract to buy a U.K. grown crop because they are satisfied that a crop of the correct quality can be guaranteed then the crop will not be grown. Finally, various political and economic factors external to the processors may act to inhibit production, and this is recognised by agencies, and to a lesser extent, by farmers. In this sense the effects of global warming, if it occurs, could be largely subsumed by a combination of structural resistances and a combination of processor and farmer decision-making behaviour.

The complex interplay of structure and agency at different scales is highlighted through discussion of adaptation to climate change through the adoption of a new crop. What is demonstrated is that while farmers recognise the need to 'negotiate away' some of their independence in the continual adjustment of their businesses (in which climate change is just one, perhaps minor, factor), there is the concurrent issue that the possibilities for such negotiation and adaptation are restricted at farm and agency scale by some resistance to change at the farm level and by political and economic constraints on the behaviour of agencies. Acknowledgements - - This paper is a result of research linked to Horticulture Research International, Wellesbourne, Warwick. The authors would like to thank the farmers and agency representatives who participated in the study. We are also grateful for the comments of an anonymous referee.

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