Wednesday, 20 July 2016

Brexit: and the future of farming subsidies

This evening, the President of the Adam Smith Institute will be launching a paper on 'Rebooting Britain':
Rebooting Britain with Dr Madsen Pirie — Adam Smith Institute

And one of his recommendations is "that agricultural subsidies be scrapped":
Use Brexit to 'reboot Britain' - and cut corporation tax to 0pc, says think tank
Corporation tax, farming subsidies and fishermen are among the targets of a free market think tank which has demanded reforms to "reboot" Britain after Brexit | City A.M.

The new head of Defra seems to agree:

Controversially, and perhaps worryingly for farmers, Leadsom also appears to have argued in the past for the end of farming subsidies. “Subsidies must be abolished,” she wrote in a 2007 article on how to rejuvenate British farming.

Theresa May brings Andrea Leadsom into government as environment secretary - as it happened | Politics | The Guardian

The Minister is now between a rock and a hard place:

Andrea Leadsom, the surprise appointment to the Department for Environment, Food and Rural Affairs (Defra), as she struggles with the looming end of EU farming subsidies. Farmers and conservationists are tussling over what form any new subsidy should take, while the new secretary of state will have to explain her views on subsidies having previously rejected them.

The National Farmers Union (NFU) told the Guardian: “We will obviously be looking for guarantees from government that the support given to our farmers is on a par with that given to farmers in the EU, who will still be our principal competitors.”

Conservation and health groups have also lobbied the government this week, ahead of Leadsom’s appointment, to ensure that any future subsidies from the taxpayer are given only on condition of farmers fulfilling strict requirements to protect the environment. At present only a small proportion of payments are directly tied to environmental stewardship, and some of the current rules are unpopular with sections of the farming community.

Big farms do best out of the current subsidy system, with many gaining millions while small farmers make do with a few thousand pounds. Conservationists are concerned because intensive farming has led to big declines in the number of farmland birds and other wildlife, and want any new system to try to halt or reverse that. They are hoping to swing public opinion behind them.

Brexit won't free UK from paying for botched EU farming subsidies, warn audit office | Environment | The Guardian

The question is: who was getting these 'subsidies' anyway:
Why our landed gentry are so desperate to stay in the EU | Giles Fraser: Loose canon | Opinion | The Guardian
Revealed: how we pay our richest landowners millions in subsidies
The Landed Gentry ‘Jackals’ Claiming Billions in Farm Subsidies | DeSmog UK

Here is the Adam Smith's rationale for cutting subsidies - and why it would be better for dairy farmers:
Farmers are milking it through state subsidies — Adam Smith Institute

And others would agree:

The subsidy myth

Many people ask why, despite receiving massive financial subsidies, farming continues to be in perpetual crisis.

Production subsidies were introduced in the UK by the 1947 Agriculture Act to persuade farmers to increase production and thus ensure national food security. Farmers received a guaranteed price for their produce and were encouraged to plough up pastures, drain wetlands and reclaim moorland and so put more land into production.

Today, subsidies to UK farmers (under the Common Agricultural Policy (CAP)) are meant not only to increase agricultural productivity but also to protect standards of living for farmers and farming communities in the EU and to bring consumers cheap food. However, the farmgate price has fallen so low that subsidies now form a substantial part of farm incomes for many farmers. This so called 'cheap food policy' is in reality a cheap farmgate price policy and it is the corporations that benefit most from these low commodity prices.

Essentially farm subsidies are corporate welfare; public funds in the form of farm subsidies are going straight into the pockets of the corporate traders, processors and retailers and most farmers are not seeing any real benefit. Even the Co-operative Society, the largest farmer in the UK, which receives about £5 million in subsidies, made an overall loss of £0.5 million in 2000.[19] Some farmers, of course, including the so called 'barley barons' of East Anglia, have been happily playing the system and making a great deal of money.[20]

A ROUGH GUIDE TO THE UK FARMING CRISIS : 3 - The UK farming crisis: which crisis do you mean? | Corporate Watch

Besides, as this comment from a small-holder in East Devon points out, the little guys didn't have much support anyway - thanks to the UK government:

A couple of years ago the EU allowed member states to decide the size of farm that would qualify for payments..

So a devolved to the UK gov decision.

In their infinite wisdom UK government decided that it was ‘uneconomic’ (hmmn?) to administer the system for farms of this size..

Despite the fact that this acreage feeds over 90 families a week, with most of their vegetables and eggs, plus makes a modest living for a family..

So there was nothing financial to lose… On the continent; farms much smaller than this are still supported, and seen as valuable contributors to food security, diversity, ecology, and the local social fabric.

Brexit: It is now more important than ever that this country has MPs who will represent the people - Claire Wright

We could always look at New Zealand:
What Brexit Allows Us To Do - Abolish All Farm Subsidies For Example - Forbes
In New Zealand, Farmers Don't Want Subsidies
Market monopolies a bigger threat to agricultural markets than subsidies | Stuff.co.nz

See also:
Brexit is a life or death matter for Britain's farmers - Telegraph
Over 80 organisations sign letter to new Secretary of State for Exiting the EU

Futures Forum: Brexit: and the future of farming
Futures Forum: Brexit: and the rural economy
Futures Forum: Brexit: and the environment

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