2020 Vision: What farming would be like outside the EU

The year is 2020 and, following a referendum in 2010, the UK has been outside the EU for a decade. What’s the new world like for British farmers? Dr Lee Rotherman of the Taxpayers’ Alliance and Prof Allan Buckwell of the Country Land and Business Association give their speculative views

Lee Rotherman

Agriculture has changed radically since Britain left the European Union and dropped the Common Agricultural Policy.

Initially the UK stopped funding the central CAP budget and set up its own “UK-CAP”, meaning DEFRA matched existing EU subsidies while policy was debated.

Yet this simple action alone saved British taxpayers £1bn a year, through no longer having UK taxes subsidising foreign farmers.

DEFRA then set about devising a new policy, better suited to the needs of British agriculture.

In the past, too many recipients were not those intended. Rather than borderline farming communities still struggling after the latest cull of all their breeding
stock, historically support had favoured the grain barons.

Back in the 1980s, four-fifths of the benefits had ended up going to one-fifth of the farmers because of their volume of output and despite efficiency of scale removing the need for most of this support.

Subsequent CAP reforms in 1992, 2000, 2003 and 2008 had failed to remove much of the sting. On far too many occasions, large sums of money had ended up as surprise subsidies for sports clubs, water companies or public schools.

DEFRA’s new policy meant you only got support if you farmed the land.

Another swift change was less to do with policy and everything to do with clarity. No longer dependent upon the agriculture council and European parliament to agree decisions, the speed of decision making accelerated considerably.

This proved critical in the brief suspected outbreak of contagious bovine pleuro-pneumonia in 2014, where a highly localised cull, with swift vaccination and registration of nearby livestock, avoided another foot-and-mouth fiasco.

The chain of authorisation had been clear from the outset and even the NFU acknowledged that the 72 hours saved had saved the day.

Other changes have been more gradual. Fifty years ago, the UK was mostly self-sufficient in milk. But under the CAP, the system had become so corrupted that many British farmers turned to dealing in quotas rather than selling milk at depressed farmgate prices. Outside the EU, British ministers have been able to instigate reforms to rescue the dairy industry.

Quotas suppressing British production have ended and dairying has re-emerged as a profitable industry thanks to increased demand in the markets of East Asia, particularly China.

And, thanks to a major push by the Ethical British Produce campaign in 2014, supermarkets were shamed into paying an extra 4p/pint to farmers, guaranteeing a profit margin in return for farmers supporting Compassion in World Farming principles.

Leaving the CAP also ended intervention buying, but it did not completely end food storage. Following a British government review in 2013, it was decided to create a special contingency reserve.

This was made up of long-term imperishable foodstuffs, which would be released in case of a major transport strike, interruption of shipping, or war.

That was a strategy of choice. But the policy of spending millions of pounds on intervention stocks, only to offload them on Third countries with the aid of export subsidies, did end.

Outside the EU, other costs have also diminished. With a simpler system, administration costs for grants are less onerous. The old CAP had sapped £72m just in wage costs for the civil servants running it, while another £5.6m was spent on “enhancing public awareness” of CAP as it was euphemistically known.

The more straightforward system in the UK also encouraged ministers to cut back on regulation. Farmers across Britain are now able to get on with their jobs without endless forms to prove that they have complied with health and safety minutiae and rely instead on basic rules and common sense.

Burdensome laws, such as those that required fallen livestock to be taken away rather than buried on-farm, have been repealed. The net result is that 10 years of red tape has been removed and farm businesses across the land are collectively better off.

Allan Buckwell

Buckwell,-AllanThe UK withdrawal from the European Union in 2010 came hard on the heels of the 2007/08 financial crisis and recession and has left Britain reeling politically and economically.

The financial services sector was already jittery after the 2010 super-tax on bonuses, but the referendum to leave the EU induced a rapid evacuation of this sector to Frankfurt and Paris. Confidence in sterling and UK government debt slumped. Fiscally, we were broke.

The few billion pounds of savings on the UK’s net EU budget contributions turned out to be trivial compared to the loss of the tax revenue enjoyed as the EU’s financial capital. Government programmes in all areas, including DEFRA, were severely cut and economic growth has still not reappeared.

Politically the UK was isolated. The USA and China had warned that they were only interested in special relations with the UK as a way in to the EU. The premier of neither has been in London for a decade.

The knock-on impacts on the rest of the economy were equally profound. The prolonged recession meant all sectors producing quality and higher-value produce, which depended on discretionary spending, were hit – especially tourism, catering and recreation.

The agricultural sector, which under CAP had weathered the 2007/08 storm better than manufacturing or financial services, was caught up in the general slump. The ultra-liberals who had led the charge in EU withdrawal did not just object to what they saw as wasteful domestic subsidies in the CAP, but to border protection too.

The UK left the EU common external tariff and UK agricultural prices dropped, especially for livestock products. The beef trade with the rest of Europe, which was just beginning to pick up after the horrors of BSE and the two outbreaks of foot-and-mouth, was knocked back down.

The weaker pound should have helped competitiveness of UK farm exports to the EU, even with a tariff wall to jump. However, the bad feeling caused by the UK’s departure led to a strong anti-UK consumer attitude, only slowly fading as the decade wore on.

Of course the biggest disappointment to the British public, to farmers and to other businesses too, was the discovery that the propaganda about a mountain of Brussels bureaucracy disappearing turned out to be illusory.

First, we belatedly discovered that the UK had been to the fore in the drive to higher environmental, animal welfare and health and safety standards.

Second, without the pressure of UK green lobbyists and a regulation-obsessed UK civil service, the EU had enacted rather feeble greenhouse gas emission reduction targets compared to those chosen here. This effectively imposed a further small, but painful, tax on UK produce.

Third, to get access to EU markets at all, the UK had, just like Norway and Switzerland, to continue to apply all EU regulation anyway, but with no chance to negotiate the details to take account of our circumstances.

Free of the EU and the CAP, the UK swiftly instituted its own farm policy. There was a token compensatory increase in what used to be called CAP Pillar 2 supports for environment and rural development. But, forced by a cash-strapped Treasury, this was too little and too late.

Marginal areas of the country were ruined. Livestock farming was hit by intensified competition from imports, the loss of direct payments and the recession-induced loss of tourism, recreation and sales of higher value, quality-labelled produce.

After seven or eight years, the scrubbing-over of large parts of the uplands was already closing in the landscape, reducing still further tourism, recreation and access to the countryside.

Slow progress made under CAP reforms from 1992 to 2010 in making farmers more market-oriented and environmentally aware was reversed by leaving the EU.

Farming was completely restructured. Farm business size rapidly expanded. Those who survived did so by taking advantage of stressed land sales and the collapse of non-farming demand for land.

The losers were a large group of middle-sized, formerly hard-working farm businesses that went under in the mid-decade amid much hand-wringing from the Eurosceptics, who said it would all be lovely once we wrested control back from Brussels.

They belatedly discovered that, while urban Britain dreams of high standards of environmental land management, it is simply unprepared to pay for them.


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