The B-word was bound to come up at some point!
With only two weeks to go before we’re supposed to be leaving the EU, it seems a good time to have a brief look at some of the issues for farmers. This is just a snapshot of a couple of issues. The challenges are potentially huge.
DEAL OR NO DEAL?
Whether or not the UK agrees a withdrawal deal with the EU will largely determine the immediate impact on farming businesses.
If the UK agrees a deal, the present trading arrangements with the EU will carry on, with changes being discussed during the transition period which ends in December 2020.
If there is no deal, import tariffs will be imposed on food imports by the UK government to protect farmers from cheap foods coming into the country, many of which will be produced to lower food-safety and animal-welfare standards.
But because the UK would – overnight – be a non-EU country, farmers exporting goods to Europe would be faced with much higher tariffs. Import taxes in the EU for dairy are often 35% and for lamb 40%. Competing against zero tariffs for countries exporting within the EU – for example Ireland and France – means that British farmers would simply be squeezed out of the market, and many of their businesses would collapse.
SUBSIDY OR SURVIVAL?
The EU’s Common Agricultural Policy has been controversial for a long time, with the biggest subsidy payouts going to those with the greatest area of land, notably the Queen and the National Trust.
But it has also quite literally meant the difference between the ability to make a living or bankruptcy, for thousands of farmers. Many farm businesses simply wouldn’t have survived without it.
The UK government will keep the subsidies as they are until 2022, then they will gradually be changed to a different system,
The Environment Secretary, Michael Gove, has proposed a radical change to the way subsidies are paid. In the future, farmers will be rewarded for ‘public goods’. These will be schemes to protect the environment, but nobody has yet spelled out exactly what they will entail. You can read more about it here.
Brexit is likely to cause a massive shake-up of British agriculture, possibly as a short-term shock or as a more gradual change to different priorities in food production and environment management. There will be winners and losers. Given that a third of UK farmers are aged 65 or over and fewer young people are going into the business, it’s likely that many small farms will cease to exist and the remaining farms will get bigger.
But farmers are a resilient lot. Given enough time and a fair system, they will manage the changes and survive, as they have done in the past.
As we need them to do.