How climate change and red tape could be jeopardising UK access to affordable food

Published

4 months ago

December 13, 2024

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It might be tempting, given how much coverage has focused on it recently, to assume the forthcoming changes to inheritance tax regime are the single biggest issue facing farmers these days.

But the reality is these tax changes come at a moment of extraordinary pressure, with farmers having to contend with a swathe of unsettling issues, many of which could prove existential for their livelihoods.

Put them all together and you realise that for many of those marching in the streets in London, inheritance tax isn’t the only problem – it’s more like the last straw.

Why does this matter for the rest of us? In part because there’s a deeper story here.

For decades, this country’s level of food security has been more or less constant. This country has produced roughly 60 per cent of our own food for two decades (the figure was even higher in the 1980s). But farmers warn that given all the pressures they’re facing, that critical buffer could be about to be removed, with domestic production falling and dependence on imported food rising.

Whether that eventuates remains to be seen. As of 2023 the amount of food supplied domestically was still 62 per cent of everything we consumed. But now let’s consider the challenges facing farmers (even before we get to inheritance tax).

The first of them comes back to Brexit.

Following Britain’s departure from the EU, the government is making dramatic and far reaching changes to the way it supports farmers. For years, those payments, part of the EU-wide Common Agricultural Policy, were based on the amount of land farmed by each recipient.

Alongside these main farm payments there were other bolt-on schemes – Environmental Land Management schemes, to give them their category name – designed to encourage farmers to do more to look after local wildlife. But these schemes were always small in comparison to the main land-based farm payments.

There were problems aplenty with this old scheme. For one thing, all told, it amounted to a subsidy for land ownership rather than food production. Nonetheless, for many farmers it was an essential support, without which they would have had to sell up and stop producing food.

Under Michael Gove, Defra committed to far-reaching changes to these subsidies. Farms across the UK would get the same total amounts, he said, but instead of the majority being based on how much land they were farming, a growing portion would be environmental subsidies.

When Labour came into government it committed to accelerating this process, with the result that by 2027, fully 100 per cent of farm payments will be for environmental schemes.

Whether this is the right or wrong move is a matter of keen debate within the farming community. Many farmers argue that the net impact of environmental schemes is to reduce the amount of land being farmed for food, and that the schemes serve to reduce their crop yields rather than increasing them. Defra, and environmental advocates, argue that unless the soil and local habitats are preserved and improved, Britain faces ever diminishing harvests in future.

Speaking of harvests, that brings us to another issue farmers are having to contend with at the moment – poor crop yields. The past winter was exceptionally wet, with the upshot that the latest figures just released by Defra show 2024 was the second lowest wheat harvest since comparable records began in the early 1980s.

Now, the whole point of farming is that it’s weather dependent – no two years are alike. It’s quite conceivable that 2025’s harvest bounces back from this year’s. But one projection made by climate scientists is that the coming decades could be wetter and more volatile, spelling more trouble for farmers.

On top of this is another challenge: trade competition. Following Brexit, the UK has signed two trade deals with Australia and New Zealand, which raise the quotas of how much food each country can export to the UK. Look at trade data and you see a sharp increase in beef and dairy imports from Australia and New Zealand.

In other words, UK farmers are having to contend with more competition even as they contend with worse weather and drastic changes to their funding model.

Nor is this where the challenges end. Because we might also be in the midst of something else: a secular slowdown in farming productivity.

Look at a very, very long-range historic chart of crop yields in the UK. You see a few interesting features. For most of our history, from the Middle Ages through to today, the amount of wheat we could grow in a given hectare of land was pretty low and pretty constant.

Now look at what happened in the second half of the 20th century. Thanks to a combination of artificial fertilisers, combine harvesters and other technological leaps, yields leapt by 200 per cent.

This extraordinary leap is the story of British farming for the parents and grandparents of those family farms tending the land today: ever increasing yields even as the government provided large subsidies for farmers. It was, in terms of pure yields, the golden age for farms – fuelled in part by chemicals.

But now look at the far right hand side of the chart – the past 20 years or so. The line is no longer rising so fast. Farm productivity – at least based on this measure – has slowed quite markedly. Yields are no longer leaping in the way they once were.

Or, to put it another way, it’s getting tougher to generate a return for each hour of work and each pound of investment.

This might all seem miles away from the day-to-day debates on farming today. But each of these factors matters. Together, they help explain why things are getting tougher for farmers.

But there’s a broader issue at hand here. Despite having left the EU and implemented far reaching policies such as these, this country hasn’t really had a proper debate about food.

Do we prefer to subsidise farmers in an effort to maintain our domestic food supplies at 60 per cent of our consumption? Would we rather ditch those subsidies and rely on imports instead? Should we favour the long-term health of the environment over short term food production?

These are chewy questions – and ones we really ought to be debating a little more. This isn’t just about inheritance tax…

Politics

Trump blasts ‘too late’ Powell for not cutting interest rates

Published

3 hours ago

April 17, 2025

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Trump blasts ‘too late’ Powell for not cutting interest rates

US President Donald Trump renewed his criticism of Federal Reserve Chair Jerome Powell, accusing him of being too slow to cut interest rates and escalating a long-running conflict that risks undermining the central bank’s political independence.

With the European Central Bank (ECB) cutting interest rates again on April 17, “Too Late” Powell has failed to act appropriately in the United States, even with inflation falling, Trump said on Truth Social on April 17.

“Powell’s termination cannot come fast enough!” Trump said.

Florida Senator Rick Scott agreed with the president, saying, “it’s time for new leadership at the Federal Reserve.”

Trump’s public criticism of the Fed breaks a decades-long convention in American politics that sought to safeguard the central bank from political scrutiny, which includes any executive decision to replace the chair.

In an April 16 address at the Economic Club of Chicago, Powell said Fed independence is “a matter of law.” Powell previously signaled his intent to serve out the remainder of his tenure, which expires in May 2026.

Crypto, risk assets look to the Fed for guidance

The Federal Reserve wields significant influence over financial markets, with its monetary policy decisions affecting US dollar liquidity and shaping investor sentiment.

Since the COVID-19 pandemic, crypto markets have increasingly come under the Fed’s sphere of influence due to the rising correlation between dollar liquidity and asset prices.

This was further corroborated by a 2024 academic paper written by Kingston University of London professors Jinsha Zhao and J Miao, which concluded that liquidity conditions now account for more than 65% of Bitcoin’s (BTC) price movements.

As inflation moderates and market turmoil intensifies amid the trade war, Fed officials are facing mounting pressure to cut interest rates. However, Powell has reiterated the central bank’s wait-and-see approach as officials evaluate the potential impact of tariffs.

The Fed is expected to maintain its wait-and-see policy approach at its next meeting in May, with Fed Fund futures prices implying a less than 10% chance of a rate cut. However, rate cut bets have increased to more than 65% for the Fed’s June policy meeting.

Politics

Wyoming commission floats whether stablecoin is ‘covered’ by SEC rules

Published

3 hours ago

April 17, 2025

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<div>Wyoming commission floats whether stablecoin is 'covered' by SEC rules</div>

The Wyoming Stable Token Commission, a body authorized by the US state to issue a stablecoin, has suggested that it may clarify its language to better comply with potential guidelines from the Securities and Exchange Commission (SEC).

In an April 17 meeting in the extension of the Wyoming Capitol building, Commissioner Joel Revill suggested the body could reduce the risk of the state’s proposed WYST stablecoin qualifying as a security under SEC rules. The discussion among the commissioners and Executive Director Anthony Apollo followed the SEC issuing guidelines that certain “covered stablecoins” were considered” non-securities” and largely not subject to reporting requirements.

Government, SEC, Wyoming, Stablecoin — *Wyoming Stable Token Commission Executive Director Anthony Apollo with Senator Cynthia Lummis. Source:* *LinkedIn*

“We’re looking to kind of create our own vernacular around some of this, to clarify, and then use that as a jumping off point of discussion for the commission,” said Apollo, adding there were internal discussions regarding the SEC guidance but the commission was scheduled to address the matter in a May memo.

The commission, established after Wyoming passed a law to issue a state-issued stablecoin pegged to the US dollar and redeemable for fiat currency, has been exploring issues surrounding WYST. Wyoming Governor Mark Gordon said in August that the government initially planned a launch in the first quarter of 2025 for the stablecoin, later amending the timeline to potentially launch in July.

Looking to the US Congress for guidance

The commission said it would be monitoring efforts by the federal government to establish a regulatory framework for stablecoins. Among the proposed legislation was the Guiding and Establishing National Innovation for US Stablecoins, or GENIUS Act, in the Senate, and the Stablecoin Transparency and Accountability for a Better Ledger Economy, or STABLE Act, in the House of Representatives.

Though Wyoming is the least populated US state, with roughly 600,000 people, it has become home to some crypto firms likely seeking a regulatory-friendly jurisdiction. Custodia Bank, the digital asset bank established by Caitlin Long, is based in Cheyenne. US Senator Cynthia Lummis, who often advocates for crypto-friendly policies, represents Wyoming in the Senate.

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Politics

How Meta’s antitrust case could dampen AI development

Published

8 hours ago

April 17, 2025

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How Meta’s antitrust case could dampen AI development

Meta, the parent company of Facebook, Instagram, WhatsApp and Messenger, is facing antitrust proceedings that could limit its ability to develop AI amid a field of competitors.

First filed in 2021, the Federal Trade Commission (FTC) alleges that Meta’s strategy of absorbing firms — rather than competing with them — violates antitrust laws. If the court rules against Meta, it could be forced to spin out its various messenger services and social media sites into independent companies.

The loss of its stable of social media companies could harm Facebook’s competitiveness not only in the social media industry but also in its ability to train and develop its proprietary Llama AI models with data from those sites.

The trial could take anywhere from a couple of months to a year, but the outcome will have lasting consequences on Meta’s standing in the AI race.

Meta’s antitrust case and its effect on AI

The FTC first opened its complaint against Meta in 2020 when the firm was still operating as Facebook. The agency’s amended complaint a year later alleges that Meta (then Facebook) used an illegal “buy-or-bury” scheme on more creative competitors after its “failed attempts to develop innovative mobile features for its network.” This resulted in a monopoly of the “friends and family” social media market.

Meta founder and CEO Mark Zuckerberg had the chance to address these allegations on April 14, the first day of the official FTC v. Meta trial. He testified that only 20% of user content on Facebook and some 10% on Instagram was generated by users’ friends. The nature of social media has changed, Zuckerberg claimed.

“People just kept on engaging with more and more stuff that wasn’t what their friends were doing,” he said — meaning that the nature of Meta’s social media holdings was sufficiently diverse.

At the time of the FTC’s initial complaint, Meta called the allegations “revisionist history,” a claim it repeated on April 13 when it stated the agency was “ignoring reality.” The company has argued that the purchases of Instagram and WhatsApp have benefited users and that competition has appeared in the form of YouTube and TikTok.

If the District of Columbia Circuit Court rules against Meta, the global social media giant will be forced to unwind these services into independent firms. Jasmine Enberg, vice president and principal analyst at eMarketer, told the Los Angeles Times that such a ruling could cost Meta its competitive edge in the social media market.

“Instagram really is its biggest growth driver, in the sense that it has been picking up the slack for Facebook for a long time, especially on the user front when it comes to young people,” said Enberg. “Facebook hasn’t been where the cool college kids hang out for a long time.”

Such a ruling would also affect the pool of data from which Meta can draw to train its AI models. In July 2024, Meta halted the rollout of AI models in the European Union, citing “regulatory uncertainty.”

The pause came after privacy advocacy group None of Your Business filed complaints in 11 European countries against Meta’s use of public data from its platforms to train its AI models. The Irish Data Protection Commission subsequently ordered a pause on the practice until it could conduct a review.

On April 14, Meta got the go-ahead to use public data — i.e., posts and comments from adult users across all of its platforms — to train the model. If these firms dissolved into separate companies, with their own organizational structures and data protection policies and practices, Meta would be cut off from an ocean of data and human communication with which its AI could be improved.

Andrew Rossow, a cyberspace attorney with Minc Law and CEO of AR Media Consulting, told Cointelegraph that in such an event, “companies would most likely control their own user data, and Meta would be restricted from using it unless new data-sharing agreements were negotiated, which would be subject to regulatory scrutiny and user/consumer privacy laws.”

However, Rossow noted that it wouldn’t be a total loss for Meta. Zuckerberg’s firm would retain the wealth of data from Facebook and Messenger. It could continue to use “opt-in” data from consumers who allow their posts to be used for AI training, and it could also employ synthetic data sets as well as third-party and open data.

Meta, the AI race and data protections

The race to unseat OpenAI and its ChatGPT model from AI dominance has grown more competitive in the last year as DeepSeek joined the fray and Meta launched the fourth iteration of its open-source Llama model.

In addition to training new models, major AI development firms are investing billions in new data centers to accommodate new iterations. In January 2025, Meta announced the construction of a 2-gigawatt data center with more than 1.3 million Nvidia AI graphics processing units.

Zuckerberg wrote in a post on Threads, “This will be a defining year for AI. In 2025, I expect Meta AI will be the leading assistant serving more than 1 billion people […] To power this, Meta is building a 2GW+ datacenter that is so large it would cover a significant part of Manhattan.”

His announcement followed the $500-billion Stargate project, which would see massive investment in AI development led by OpenAI and SoftBank, with Microsoft and Oracle as equity partners.

Amid this competition, AI firms are looking for broader and more varied sources of data to train their AI models — and have turned to dubious practices in order to get the data they need. In order to stay competitive with OpenAI when developing its Llama 3 model, Meta harvested thousands of pirated books from the site LibGen. According to court documents in a case pending against Meta, Llama developers harvested data from pirated books because licensing them from sources like Scribd seemed “unreasonably expensive.”

Time was another perceived motivator for using pirated works. “They take like 4+ weeks to deliver data,” one engineer wrote about services through which they could purchase book licenses.

The practice is not limited to Meta. OpenAI has also been accused of mining data from pirated work hosted on LibGen.

Rossow suggested that, “to ensure lasting impact — beyond short-term profit,” Meta would do well to “prioritize investment in advanced data collection, rigorous auditing and the implementation of privacy-preserving and encryption-based technologies.”

By focusing on transparency and responsible practices, “Meta can continue to genuinely advance AI capabilities, rebuild and nurture long-term user trust, and adapt to evolving legal and ethical standards, regardless of changes to its platform portfolio.”

What a ruling for the FTC would mean

Litigation is now hitting tech firms from all sides as they face allegations of privacy violations, copyright law infringement and stifling competition. Major cases like those facing Google, Amazon and Meta that have yet to play out will decide how and whether these firms can proceed as they have, defining the guardrails for AI development as well.

Rossow said that the current antitrust case against Meta could decide how courts interpret antitrust law for tech firms, spanning tech mergers, data usage and market competition. It would also signal that courts are “willing to break up tech conglomerates” when issues of smothering competition are involved, while at the same time, “taking current precedent a step further in harmonizing it with the laws of cyberspace.”

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