How to make money

20 Nov 2014

In recent years I have pondered that the easiest way to make money must be to rent a shop in Cambridge and populateCup of coffee it with a few tables and chairs and serve good quality coffee. Pricing a cup of coffee would not be a problem; just think of a ridiculous amount and then treble it would be about right. Even better, have a few tables and chairs outside and there will not be a spare seat whatever the weather.

However, this get rich quick scheme may not be as robust as I thought. There has been a recent report that says that individually owned coffee shops are struggling.

Never mind, I now have a new plan which developed as I walked around the pesticide section of the local garden centre. There are now precious few active ingredients available to gardeners and, partly as a consequence, there is a growing range of ‘natural alternative’ pesticides. I noted one natural insecticide sold in 200 ml bottles. It comprised 160 ml of oilseed rape oil and the remainder, I assume, was an emulsifier in order to keep the oil in solution whilst it is being sprayed. The price was £6.99! Yes, £6.99! That must be the way to make money.

I first heard of oils (in this case mineral oils) being used as insecticides whilst talking a few years back to a French farmer. He was spraying his potato seed crop regularly with them in order to reduce/prevent aphids feeding and spreading virus. This has an advantage over conventional insecticides which tend to kill aphids after they have fed on the plant and consequently have already spread the virus. A report for the British Potato Council endorses the potential for this approach, possibly in combination with conventional insecticides, and now field research is being done to measure the benefits of using oils in order to reduce/prevent the spread of viruses.

Sorry, I have strayed from my theme of making money. It seems at the moment that producing commodity crops is not a way of making money as there is no shortage of supply because of good levels of world production this year. This is a recurring story in our industry. Uniquely there are a countless number of producers in the world whose yields can be profoundly determined by the weather resulting in it being impossible to finely balance supply and demand. So, it is perhaps in everyone’s interest that farmers will continue to produce food even when there is the distinct possibility that they will produce too much, resulting in them losing money. Some say that this is the reason why we need subsidies in order to ensure that, if anything, the world has over- rather than under-production of food.

I realise that some countries do not receive subsidies. New Zealand is an example but their commodity crop production is relatively minor in world terms and they have many alternative cropping opportunities. I am the first to admit that they themselves have created many of these alternative opportunities, such as specialist seed production, and that this may not have occurred had they received subsidies. On the other hand, there is a limited area needed in the world for such specialist crops.

Perhaps subsidies should not generally be viewed as wrong provided that they help to reduce significantly the number of years when there is an insufficient supply of the major commodity crops. The last time there was a price spike because of concern of under-supply, it caused food riots particularly in some poorer parts of the world. However, I would rather be part of an industry that does not require subsidies but this may be unrealistic until world production consistently struggles to meet demand.