Monday, 22 August 2016

Brexit: and an uncertain future for farming

There has been a lot of discussion post-referendum about what to do with farming subsidies:
Futures Forum: Brexit: and New Model Farming from the CPRE
Futures Forum: Brexit: and a 'new, bold ambition' for farmers
Futures Forum: Brexit: and guaranteeing funding: 'stability and certainty'

The FT carries an opinion piece on the need to replace the CAP with a 'smarter' system:

August 21, 2016 7:31 pm

Britain’s farmers will need help after Brexit

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:

My 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:


Two months after the consequential vote, the profound irony of Brexit is becoming clear—but perhaps not to those who voted for it.

As I watched half a dozen Eastern European workers cutting zucchini and placing them on a slow-moving trailer in the small English village where I was brought up, one of the hard truths regarding the epic, self-defeating lunacy of Brexitcame home to me: Britain’s precarious food supply.
Under the European Union’s right to the freedom of movement, some 250 Eastern European workers come here each year to pick vegetables—mostly onions, parsley, beans, Brussels sprouts, and cabbages—which are grown in the alluvial soil beside the River Avon. This is an sensible arrangement that suits both the farmer and migrant workers. But it was not always so. When I was a teenager, roaming the countryside with a .410-gauge shotgun or a fishing rod, I only ever came across one foreigner in the fields: Franz Reinwart, a Sudeten German from Czechoslovakia, who was brought to Britain as a P.O.W. during the last war and stayed on. The others were English and they came mostly from the local town in Worcestershire.
Franz was a gentle, good-looking man and a hard worker, too, much like his young successors from Romania, Bulgaria, Poland, and Lithuania, who toil long hours in all weather and earn enough to make the summer trip to the U.K. worthwhile. About 60,000 seasonal workers come to Britain every year and it is fair to say that British farmers would be lost without them. More important, if Brexit goes ahead, they cannot hope to replace them with the local labor force, which has come to see this kind of back-breaking work as beneath itself, or, in any case, is probably not very good at it.
I have no idea whether this local farmer voted to stay or leave the E.U. in the referendum, or if he even voted at all. Yet it was often farmers, who need foreign workers—and the rural working class, who are reluctant to become agricultural laborers—who voted to “take their country back.” Watching those men in the zucchini field this week, I wondered, not for the first time, how voters have become so blinded to their own interests.
Among the the multitude of calamities affecting everything from manufacturing to finance, the potential crisis in food has largely gone unnoticed. Not only must Britain bring in labor to produce its crops, but it also now imports more than 40 percent of its food from abroad. This cost has become more expensive since the Brexit vote as the value of the pound Sterling has declined to 1985 levels, even reaching parity with the Euro at one point this past week. As the cost of producing food increases, so will the price of importing it, given the decline of the pound and subsequent spike in fuel prices.
Britain already has a food crisis. One of the U.K.’s shameful little secrets is the huge number of food banks that sprang up after the 2008 depression—one charity alone has operated 445. Now Brexit seems likely only to increase food poverty. To preserve anything like the current living standards, Britain will quickly have to become much more self-sufficient.
Where will the labor come from? The farmers I talked to are hoping either for an arrangement that makes short-term visas available to Eastern European workers, or that Britain somehow continues to accept the free movement of people. Either way, you wonder exactly what rural communities thought they were gaining when they voted to leave Europe.

The Brexit Culprits You Never Saw Coming | Vanity Fair

See also:
Futures Forum: Brexit: and migrant workers in Devon
Futures Forum: Brexit: and the future of farming  

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