Countdown to Brexit: 83 days – ‘Considerable turbulence’ for farmers in a no-deal Brexit

On average, EU subsidies account for 60% of British farms’ income.   Without subsidies, 90% of farms would collapse - and land prices crash.

The Environmental Audit Committee has consistently warned of the dangers of leaving the EU without a comprehensive post-Brexit UK Farming strategy in place.  Its report ‘the Future of the Natural Environment after the EU Referendum’ says:

  • Leaving the Common Agricultural Policy will threaten the viability of some farms;

  • Trade agreements which impose taxes on UK farm exports will threaten farm and food business incomes;

  • New trading relationships with states outside the EU could lead to increased competition from countries with lower food, animal welfare and environmental standards.

A no-deal Brexit could devastate the farming sector in the months that it will take for a new framework can be completed.  The government has promised to match them to the end of 2022, but beyond that nothing has been finalised.

Environment Secretary, Michael Gove, told the Oxford Farming Conference this week that: “farmers and food producers face ‘considerable turbulence’ if the UK leaves the EU with no-deal.”  He it was a "grim and inescapable fact" there would be tariffs on exports - and new sanitary and other border checks.

If the UK defaults World Trade Organization rules and standard tariffs, this means levies of 11% on a host of agricultural products, and at least 40% on beef and lamb exports.

 Background

CAP

The Common Agricultural Policy (CAP) began in 1962 as the first members of what is now the EU emerged from over a decade of food shortages during and after World War Two.

Its emphasis was on production and food security but as farmers were paid for whatever they produced, they over-produced leading to food "mountains".

Subsidies

A reform process, including the "greening" of the CAP which emphasised environmental practices, has resulted in farmers mostly being paid depending on how much land they own. 

UK landowners presently receive subsidies of up to £3m a year.  For instance, the Newmarket farm of Khalid Abdullah al Saud receives £400,000 pa; Lord Iveagh - who lives on the 22,486-acre Elveden Estate in Suffolk - receives over £900,000.

Tariffs

Calum Kerr, MSP and Environment, Food and Rural Affairs spokesman for the SNP, said: "WTO rules would look at an average tariff into the EU of 20%; with red meat somewhere between 50% and 76%.  90% of beef and lamb exports - and 70% of pork - go to the EU.

Michael Gove at Oxford Farmers Conference on 3 January 2019

Michael Gove said that he is urging his Parliamentary colleagues to support the Prime Minister's ‘deal’.  This will ensure that farmers' current – tariff and restriction free - access to the EU will be unaffected during the 21-month transition period following Brexit.  "It will avoid disruption of no-deal while paving way for reforms to put UK farmers in a world-leading position in terms of food production and environmental stewardship."

He praised the role of British farmers as food producers, and their provision of healthy and affordable food as part of a food and drink sector that contributes £113bn to UK economy every year.

Farmers will receive payments for "public goods", such as access to the countryside and planting meadows.

The environment secretary told farmers the government would guarantee subsidies at the current EU level until the 2022 election. There would then be a "transitional period" in England.

Along with the high standards of food production, Gove referred to the importance of the UK's responsible contribution to mitigating climate change and said that "we must not barter these away for a short-term trade off."

Gove also called for greater collaboration to attract more talented people into the industry.  He said that the UK's universities are some of the most respected in the world - and lead the way in bio-science and agri-tech.

Reference: https://www.gov.uk/government/speeches/oxford-farming-conference-2019-address-by-the-environment-secretary

 

 
John ShuttleworthComment