THE AGRICULTURAL ECONOMICS SOCIETY
Newsletter
July 2025

Letter from the President
Profit, Policy and Preferences
 
In neoclassical economic theory rational firms maximise profits and rational consumers maximise utility. Considerable attention has focused on measuring farm level profit or farm incomes, stemming from the necessary analysis of policies that successive governments and organisations have put in place to maintain farm incomes, and attempting to overcome the low “farm income” problem. In UK farming the current hot topic, and ongoing unrest, relates to the reduced inheritance tax benefit afforded to farmers and landowners when using land, through which wealth passes to the next generation. The rationale for this unrest being that many farm businesses never realise the wealth embedded in land, nor achieve sufficient return on assets to warrant the inheritance tax burden that many farm business beneficiaries may face. Agricultural economic analysis has long revealed ‘low’ farm profits for particular sectors, across countries and over time, indicating low returns to farmer labour. Additionally, in real terms, annual returns to holding wealth in agricultural ‘land’ is typically lower than for other potential asset uses. These two findings would suggest that farmers do not maximise profits on their assets or maximise returns for their labour. Does neoclassical economics not apply to farms and farmers in light of this evidence? Perhaps only if we ignore farmers’ utility functions in our analyses. Typically, we apply utility functions to consumers and the consumption of goods. Yet as we know that farmers derive utility from farming, in addition to the income returns for their labour and the capital returns from their assets, we must return to neoclassical economic theory, but with a revised utility function that accounts for the benefit farmers derive from farming. Arguably the difference realised between farming profit, from returns to labour and capital, versus the typically greater returns that can be achieved from alternative uses simply reveals the preference of farmers to farm. Should agricultural economists give more attention to the estimation of this revealed preference for farmers to farm as a measure of the utility they derive from farming? Such analysis will surely reveal interesting outcomes across different farm types, countries and time. Neoclassical economics appears to be intact, but only if our definition of farmers’ utility functions includes their preference to farm.

Paul Wilson (paul.wilson@nottingham.ac.uk)

AES-Agri-Food Industry Dialogue, 18th June 2025
Strengthening Sustainable Farming & Food Futures in a Volatile World 

The AES welcomed around 30 delegates from across the agri-food sector, spanning processing, finance, consultancy, academia, government, and farming unions, at the Farmers’ Club in London, focusing on how we can work together to build a more sustainable and resilient agri-food system. AES President Paul Wilson and Chair-Elect of the AES Executive Sarah Baker – who organized the dialogue with Carmen Hubbard - chaired the meeting. Below are the highlights from the day’s discussions.

Sustainability in Practice
In setting the scene the concept of sustainability was explored from both academic and industry perspectives:
· Data is critical: There’s a pressing need for accurate, trusted data, potentially held by AHDB, to support decision-making.
· Collaboration is essential: Effective partnerships across the supply chain, including farmers, environmental NGOs and consumers, are vital to scaling up successful initiatives.
· Producers need support: Farmers are being asked to do more with less but cannot meet these demands without coordinated industry backing.

Tackling Volatility and Sustainability
A panel discussed the dual challenges of sustainability and market volatility:
· Circular systems: Greater use of by-products and systems thinking can reduce waste and improve resilience.
· Policy uncertainty: Inconsistent government signals hinder long-term planning and investment.
· Measurement matters: Current carbon emission calculators vary widely; standardised, hence credible and practical tools are urgently needed.
· Evidence-based insights: The AHDB - Andersons Centre report (2024) on characteristics of top-performing farms was highlighted as a model for robust farm-level data insights on driver of performance.

Risk, Structure and Fairness
In a volatile world heightened risks need to address some fundamental issues:
· Structural change: A frank conversation is needed around how to boost productivity, facilitate farm restructuring and ensure long-term viability.
· Supply chain fairness: Long-term contracts and fairer contract terms could reduce risk and encourage sustainability investments.
· Social value: Sustainability must embrace economic and financial viability and social concerns.

Bridging the Gap
Moving from understanding the challenges to solutions point to fostering trust and collaboration.
· Data partnerships: Working with trusted partners at scale can improve data quality and industry insight.
· Risk management: Tools used in other countries may be adapted for the UK situation if participation is broadened.
· Aligned incentives: Collaboration only works when all stakeholders benefit and trust is built, but this takes time.

Final Thoughts
While the challenges are numerous, so too are the opportunities. However, these can be unlocked if the whole sector defines a clear vision for the future and works together around shared goals, trusted data and robust analysis. Hence, a role for agricultural economists! We would like to say a big thank you to all speakers and participants. Ideas for the AES hosting another successful industry event are always welcome.

Carmen Hubbard (Newcastle University)
Sarah Baker (AHDB)
Paul Wilson (Nottingham University)

Preparations underway for the AES Centenary Conference in 2026 

The AES is approaching its Centenary and preparations are well underway for the 2026 AES conference in Wadham College Oxford, from 23-25 March, near the site of the first conference in March 1926. David Stead (UC Dublin and Honorary Secretary elect) is completing a history of the Society in the context of the evolution of the agri-food economy and agricultural economics. The history will be launched as part of the Centenary and several other events are planned, including invitations to other agricultural economics associations. The Presidential Address will be given by Professor Alan Matthews (Trinity, Dublin) and Professor Jill McCluskey (Washington State) will deliver the Keynote. Next year will also mark the “changing of the guard” with the retirement of several of the Society’s long-standing Officers. www.aes.ac.uk 

The JAE and EuroChoices continue to make an impact!

The June 2025 (72:2) JAE has just been published. It includes my Editor’s Report for 2024, as well a Special Focus on The Role of Agricultural trade in Countering Extreme Weather Events, with a Foreword by Guest Editor John Saunders, who I would like to thank for coordinating the 4 contributions. It also contains a further 9 original papers. Clarivate has released its annual Journal Citation Reports (JCR) and the new Journal Impact Factors (JIF).  The JIF for the JAE for 2024 is 4.2, up from 3.4 in 2023. In ranking, the JAE has jumped from 8/39 journals in 2023 to 5/34 journals in 2024 in Agricultural Economics and Policy, and 68/617 in Economics (97/600 in 2023). While JIFs are only one (imperfect) measure of journal performance I do not think this annual improvement would have been possible without strong guidance from the editorial team, the diligence of the journal’s reviewers and a continued flow of quality submissions.

Jonathan Brooks, JAE Editor in Chief (jonbrooks208@gmail.com)

Clarivate’s JIF for EuroChoices has also significantly improved its position in the top quartile in its category.  Significantly, in the first EuroChoices issue of 2024, Jack Peerlings, Krijn Poppe and Yves Segers reflect on 50 Years of the EAAE, from Farm to Food Systems, 1975-2025. They emphasise how the EAAE's publications have played a key role in disseminating high quality research and policy insights.

John Davis, EuroChoices Editor in Chief (eurochoices@aes.ac.uk) 

Memorial to Emeritus Professor John McInerney 1939-2025

A Service of thanksgiving for the life of John was attended on 10 May by around 100 former colleagues, family and friends in the Church of the Holy Cross, Cruwys Morchard, followed by a reception in the Templeton village hall, Devon. Emeritus Professor David Colman, a former colleague at Manchester reflected on John’s rich and varied professional life, while John’s son, Duncan, spoke movingly and inspirationally of his father – and the principles by which he lived. On a gloriously sunny day Devon was at its best in all its Spring glory with hawthorn, chestnut and cow parsley in full blossom on the green hills, lanes and dairy pastures. It was a fine setting for a day of heartfelt and fond tributes – and with plenty of amusing and insightful anecdotes - to a remarkable yet modest and pragmatic man who contributed so much as an academic and communicator, especially on the rural environment and animal care, and will be a much-missed colleague, friend and mentor. 
Wilfrid Legg 

A shorter version of the Newsletter is also circulated with the JAE. The deadline for items for the next issue is 3rd December 2025, to wilfrid_legg@hotmail.com