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The FT carries an opinion piece on the need to replace the CAP with a 'smarter' system:
August 21, 2016 7:31 pm
A reformed system of agricultural subsidy should replace the CAP
For decades, the British farming community has been the recipient of generous subsidies under the EU’s Common Agricultural Policy. Last year CAP payments to the UK totalled about £3bn, making up 55 per cent of farmers’ incomes. Once the UK leaves the bloc, these payments will come to an end, potentially endangering businesses across the country.
Theresa May’s new government is aware of the challenge this poses. Earlier this month, Philip Hammond, the chancellor, announced that the Treasury would replace any shortfall in EU funding to farmers that might arise between now and the end of the decade as Britain redefines its relationship with the EU.
However, Mr Hammond is providing no more than a short term stopgap. Farmers remain highly uncertain about their prospects after 2020 and Mrs May and her ministers need to address how British farming support can be reconfigured in a post-CAP age.
Some free market thinkers believe Britain’s departure from the CAP is a golden opportunity to scale back — and even end — agricultural subsidies altogether. They believe the CAP has been hugely distortive because farmers are granted funds according to how much they produce. British farming businesses have therefore been unwilling to innovate, leaving agricultural productivity in the UK lagging well behind that of the US, for example.
Proponents of deep cuts in subsidy also believe they are a sine qua non if Britain is to forge new trade deals with non-EU states. The EU is so heavily committed to agricultural protectionism — imposing tariff barriers on outsiders while subsidising its own farmers — that its ability to sign trade agreements with developing nations has long been restricted. If the UK adopts a different approach, opening up its markets to food exports from, say, Commonwealth nations, it could gain significant new access for UK companies looking to sell services.
Politicians should tread carefully, however. It is in Britain’s interest to maintain a strong farming industry at home and no government should take risks on food security. Farming is an uncertain profession and one that is increasingly exposed to the challenges posed by climate change. That is why most developed countries, whether inside the EU or not, maintain public funding for farming communities.
The right course for Britain is to replace the CAP with a smarter and more innovative system of public support. Instead of subsiding food production, the UK should look to adopt a system of highly specific direct transfers. Future UK governments should, for example, put far more emphasis on paying farmers to tackle specific environmental problems; or to boost training and skills in the workplace; or to invest in research and development projects that boost productivity.
British agriculture is at the start of a tough new era. The country’s farmers have long thrived on the free movement of cheap European labour, direct access to continental consumers and generous subsidies from Brussels. Britain’s decision to leave the EU — one that was ironically backed by many voters in rural communities — is now set to put that business model in jeopardy. The end of the CAP regime in Britain will be no bad thing. But ministers must ensure that British farming communities receive the support they need in order to survive in the brave new world after Brexit.
Meanwhile, Norman Tebbit writing in the Telegraph is also pleased that new thinking is happening:
y friends in the agricultural industry have also been much relieved by the Prime Minister's indication that as we approach the moment of Brexit there will be a study of how the existing EU subsidy will be replaced by a support scheme tailored to the needs of our industry and our countryside, (as Charles Moore suggested in the Telegraph on August 20), rather that those of the French. That sounds like a job for another cabinet committee.
The vast forces of the anti-Brexit elite are already regrouping. Theresa May must resist them
But Vanity Fair has a different approach:
THE BREXIT CULPRITS YOU NEVER SAW COMING
The Brexit Culprits You Never Saw Coming | Vanity Fair
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