Interview: Eustice talks subsidies and post-Brexit farming

Defra minister George Eustice put his political career on the line at the start of 2016 by campaigning for the UK to leave the EU.

It was a gamble that paid off. As 2017 beckons, he now finds himself chief architect of a post-Brexit policy for British agriculture.

Describing Brexit as the first opportunity in 45 years to devise a coherent agriculture policy that is fit for purpose, he says: “I think the reality is that once we trigger Article 50, you will then, towards the latter part of next year, quite quickly see things taking shape.”

It is early days, but Mr Eustice has already indicated the new policy will focus on encouraging risk management, ecosystems services and animal welfare. UK agriculture must also “move away from the notion of subsidies”, he adds.

See also: George Eustice sets out principles for a British farming policy

“At this stage we are really exploring what other countries do.

“We have all options on the table at the moment – we really want to understand the pros and cons of each before we try to design something for the future.”

Mr Eustice’s belief that UK agriculture must move away from direct payments has led to suggestions that future British policy could be based on the New Zealand model, which all but scrapped subsidies overnight in the 1980s.

But he suggests a bespoke policy will be devised for the UK.

“I don’t think we compare to New Zealand so we’re not just going to take the New Zealand model off the shelf and do a New Zealand – but we are keen to learn from experience right around the world.

“One of the things New Zealand did do – although they moved off a subsidised agriculture – they did actually make available quite a lot of grants to help farms invest to make themselves more profitable and we are keen to learn from that.”

Crop insurance

The government is also investigating the possibility of facilitating a crop insurance scheme.

Again, it would be a scheme tailor-made to UK needs, although Defra has been looking at the experience of countries such as Canada, the US and Australia.

There will still be rules of course – but from Westminster, rather than Brussels.

But Mr Eustice says it is important not to mix up regulation with cross compliance.

After that, he says, the aim is to move towards a concept of rewarding farmers for ecosystems services.

“This is sometimes misunderstood. I have said we have to move away from the notion of subsidies as it were – and the reason I say that is because I think subsidies for farmers is a bit of a misnomer – in that if you pump subsidies into a system it comes out all over the place.”

At the moment, Mr Eustice argues is unclear who benefits from subsidies – whether it is farmers themselves, landowners who can charge higher rents, farm suppliers who can then charge a little bit more or consumers through the production of undervalued food.

“It is unclear if you put subsidy into a system in that way who benefits. At the moment we have a system that says ‘you farmers are lucky, you are getting all the subsidy therefore you must do all these things that we dictate’.

“Farmers are expected to like it or lump it. I think a better way to go is to recognise that we are asking farmers to do things – to farm sustainably, to protect watercourses, to help support recovery of farmland birds and other habitats.”

Ecosystem services

Farmers who provide such ecosystem services should be properly rewarded.

“We should be paying them and rewarding them for the ecosystem services they provide – not giving them a subsidy and saying they should be grateful, so do as you’re told, which is the system we have now.

“That is why the system we have now I really don’t think is sustainable or defensible in the long term.

“And I actually don’t think it is in farmers’ interests either.

“I think the right thing to do is to recognise what farmers are delivering – and that is [rewarding them for] ecosystem services.

The new system then, will be much different.

“You might end up rewarding farmers using a formula that has an area-based element to it. But it wouldn’t be a direct payment and regarded as a subsidy in the same way as it is now.”

Challenges

It has been a big year on a personal level as well as politically.

This autumn, Mr Eustice lost his father Paul after a long battle with cancer. A much-respected farmer in his own right, Mr Eustice senior was a “huge influence” on his son.

“Most of his life nearly every sector he was in was a sector that was unsubsidised. He felt this very strongly: he always told me what his own grandfather had told him, which was as soon as the government comes in and offers subsidies for something, it is time to get out of it.”

A recent report by the Institute for Government suggested budget cuts meant Defra had the expertise, but not the capacity, to cope with Brexit.

But Mr Eustice says resources and people have already been redeployed to work on the project in Defra – and that will continue.

“Making sure we have the resources to tackle the task in hand is not a problem. We will make sure we have got what we need because this is the biggest decision this country has made for half a century – and it is a decision we have to prioritise.”

About 80% of the laws and regulations that Defra deals with are from the EU, says Mr Eustice.

“No other department has seen such a transfer of power to the EU and no other department has as big a challenge as Defra in bringing power back from the EU. But it is a challenge we are up for.”

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