Sunday, 26 August 2018

Brexit: and good news for Exmoor farmers

Many in farming in the West Country are pessimistic about life after the EU:
Futures Forum: Brexit: and the risks for UK food
Futures Forum: Brexit: and farmers’ biggest challenge since the Repeal of the Corn Laws
Futures Forum: Brexit: and Devon farmer saying "80% of farm businesses becoming no longer viable"

And many are optimistic:
Futures Forum: Brexit: and leaving the EU providing an opportunity for UK agriculture

Including many in Exmoor, as reported in the FT this week:

Why Brexit could be good news for Britain’s farmers

Sarah Gordon meets the Exmoor residents who hope leaving the EU will save their land and livelihoods

South Molton does not look like a crucible for the future of the English countryside. Even on market day, the narrow streets of this Devon town in the south-west England are far from busy, although sheep are being auctioned and local produce is for sale on the stalls nearby. But this sleepy place on the edge of Exmoor is part of an ambitious proposal by local people to transform the way Britain’s countryside is managed.
It is a do-or-die moment. With Brexit due next year and, soon after, the end of EU agricultural subsidies worth more than £2bn annually, big decisions must be made by policymakers about what sort of rural economy Britain wants, and how best to deliver it.
Exmoor has been farmed and lived on for thousands of years, and has been shaped by that history. Straddling the border between Devon and Somerset, its 267 square-mile patchwork of fields surrounded by tree-topped banks is interspersed with woodland, deep valleys and rivers, and dramatic areas of moorland.
But the area’s future is uncertain. People here voted overwhelmingly in favour of leaving the EU, in part because of widespread dislike of its Common Agricultural Policy and the rules for accessing its subsidies. In the half-century since the CAP was introduced, hundreds of billions in funding have been handed out to farmers across member states, from French dairy producers to Bulgarian grain growers. The aim was to keep food prices low for consumers, while ensuring food security and sustaining the livelihoods of those working on the land amid growing global competition. But the policy has been repeatedly criticised for skewing incentives towards mass production, and for the fact that the largest handouts often go to already rich landowners.
Many Exmoor farmers view leaving the EU as a once-in-a lifetime opportunity to redesign agricultural policy. A group of them have banded together with residents and local groups to come up with their own vision for a post-Brexit future, which they have optimistically named Exmoor’s Ambition. They believe their proposal could secure both the livelihoods of local people as well as the attractions of the area’s beautiful landscape for visitors.

Near Wheddon Cross, in the national park © Nicholas JR White

Whether they can persuade the government is another matter. While most policymakers agree that the end of the CAP should prompt a transformation of rural policy, there are some who see Brexit as an opportunity to reduce farmers’ dependence on taxpayers’ money. Last year, the centre-right think-tank Policy Exchange suggested phasing out subsidies for food production, and argued that the UK could lower agricultural tariffs with other countries to allow for cheaper imports — a move that would put pressure on farmers to cut their costs.
Westminster has said it will match EU subsidies until the next election, scheduled for 2022. It is unclear what will happen after that. “The disaster for Exmoor and other areas would be if the CAP is cut and nothing is put in its place,” says Ian Bateman, professor of environmental economics at the University of Exeter. “That would lead to mass bankruptcy.”

Robin Milton’s family have farmed on Exmoor for nine generations. He raises sheep and cattle on 400 acres of farmland and 2,000 acres of moorland, while also tending one of the oldest herds of Exmoor ponies — small yet hardy creatures well adapted for the poor grazing and sometimes extreme weather on the moor. Subsidies from the EU provide the Miltons with a substantial proportion of their income, and a guaranteed cash flow in an uncertain market.
Lamb prices, for example, have fluctuated by more than 100 per cent over the past four months, explains Milton. “How can you produce a business plan when values move like that?” he asks. With 1,000 breeding ewes, a £10,000 annual profit would be “a good year”, and without the EU’s basic payment scheme, he adds, “there really would not be enough to produce a living” — a message echoed by farmers across the region.

The Valley of the Rocks © Nicholas JR White

While acknowledging the importance of EU money in keeping his farm going, Milton, a 57-year-old who speaks with a warm West Country burr, has harsh criticism for the way the rules for its disbursement have been designed and implemented. Under these, farmers are paid a certain amount per acre of land occupied, provided they maintain it to a minimum standard. This means that landowners with larger and more profitable arable farms in other parts of Britain can get paid more than farmers in challenging areas such as Exmoor.
There are other anomalies. Farmers are penalised rather than rewarded for features such as ponds, which encourage wildlife but are deemed ineligible for support. And there are rigid timetables for when and how farmers can harvest, sow and plough their land, which take little account of local circumstances. One example: hay meadows cannot be cut until July 15 each year, to guarantee that they have gone to seed. But this year, after an unusually hot May and June, the fields were ready to mow a month earlier.
“The rules are the same wherever you are in the country,” says Milton. “They don’t take any account of the fact that Exmoor may be different from Northumberland or Cumbria.”
Most importantly, perhaps, Milton believes EU subsidies disempower farmers, not just by setting inflexible rules that cannot be bent to match local circumstances, but also by telling farmers what to do rather than setting objectives for them to meet. “You’re doing things not because it’s right to do them, but because it ticks a box,” he says. “Farmers feel we have lost ownership of what was there. It’s removed any feelings of trust between farmers and the establishment. The vast majority of farmers I know, they want to look after their land properly. Their main ambition is to leave their farm a bit better than when they started, for the next generation to take over.”
As well as farming, a task that he and his brother have mainly now handed on to their children, Milton is a member of the Exmoor Hill Farming Network, which includes more than 300 farmers in the area. He also chairs the Exmoor National Park Authority. These groups, with input from the Exmoor Society, Natural England, the RSPB and local landowners, have come up with a proposal that they believe would far better answer the needs of farmers and other businesses on Exmoor than the current EU regime. It would also turn the region into a test case for a more effective policy for Britain’s countryside after Brexit.

VIctoria and Andy Comerford in their cheese shop in South Molton © Nicholas JR White

Exmoor’s Ambition suggests that farmers should be offered financial incentives to produce “public goods” — services or products that unregulated markets either under-provide or fail to provide at all, such as a clean and attractive environment or a neighbourhood park. For farmers, this could mean providing anything from access to food to a beautifully maintained hedge, a properly preserved historic farm building or a tranquil view.
This holistic redefinition of what farmers do would have huge implications. Under the scheme, farmers who actively manage farmland and woodland would have the natural and cultural “capital” of their land evaluated, identifying the assets that are of public value. They would then sign up to an annual agreement to maintain and improve these assets, and be financially rewarded for doing so. The types of land management that delivered the greatest public benefits would receive the highest payments, and more money would be given to farmers who convert to organic production, for example, or who undertake conservation work such as hedge-laying, coppicing or the protection of watercourses.
These proposals, in fact, mirror many of the ideas that Michael Gove, the environment, food and rural affairs secretary, set out when he launched a consultation in February on the future of farming after Brexit. Gove, a Brexiter and key member of the Vote Leave campaign, has spoken a number of times about the opportunities presented to agriculture by leaving the EU.
The consultation paper suggested a number of ways of replacing CAP subsidies, including offering farmers payment for public goods. Under the proposal, they would be paid “for delivering environmentally beneficial outcomes . . . such as restoring peat bog and measures which sequester carbon from the atmosphere; protecting dry stone walls and other iconic aspects of our heritage”.
Dieter Helm, the influential economics professor at New College Oxford who pioneered the concept of “natural capital” and chairs the Natural Capital Committee, believes the value of places such as Exmoor to society has been underestimated for years, and that the new proposal would set this right.

Dunkery Beacon, Exmoor’s highest point © Nicholas JR White

“Exmoor is an incredible, unique asset,” he says. “It’s about farming, but it’s also about health, exercise, fresh air, mountain biking, walking and village pubs. The character of the place is the ultimate public good. If you want to provide open access, repair the hedges, create wildflower diversity, then farmers should be supported for that.”
Looking after these public goods, he argues, would justify spending taxpayers’ money more effectively than the current system, under which agriculture produces just £9bn a year for the UK economy but receives £3bn in subsidies and tax breaks. “Farmers are essentially recipients of huge state benefits, and those should be tied more closely to the good of the whole of society,” he says.

It is difficult for visitors to this landscape, with its chocolate-box villages, swaths of moorland and views over rolling hills and coastline, to realise that, beneath the beauty, both farmers and the businesses that depend on them are struggling with tough realities.
Real returns on farming have declined dramatically over the past century. The average income for a farm in an area such as Exmoor in 2016/17 was £27,000, according to government data, including the EU basic payment but excluding the cost of labour of farmer and family and of capital investment in machinery or buildings. Effectively, this means that, even with the subsidy, which averaged £28,000 in 2016/17, most farmers in the region are barely scraping by. “The vast majority of farmers, particularly in those difficult upland landscapes, could not survive without some form of subsidy,” says the MP Peter Heaton-Jones, whose constituency spans about a third of Exmoor as well as other areas of North Devon.
Off the farms, professional life on Exmoor can be challenging. The national park no longer has a bank branch, after the last one in Dulverton closed. For many it is a 10- or 20-mile drive to the nearest petrol station or post office. Owning property is out of reach for most local workers, given that house prices are 14 times the average salary. West Somerset, within which part of Exmoor sits, was the worst performing area in the whole of Britain in November 2017’s report by the social mobility commission.

John Prideaux, farmer © Nicholas JR White

Communications are limited, with patchy broadband and mobile signal, few main roads and mainline rail stations only at Taunton and Exeter, outside the borders of the park. “It’s much easier for us if agriculture in the area is doing well,” says Andy Comerford, who with his wife Victoria runs The Cheese Larder, a shop specialising in local produce, in South Molton. “We get honey from a producer down the road – he brings in a couple of jars every now and then. It sells immediately.”
Until two months ago, the shop’s turnover had grown every month since the couple founded the business in 2013. But with three banks closing their South Molton branches over the past six months, business from locals, who make up half their customers, has dropped off. Fortunately, the tourists who make up the other half are still coming.
Tourism is Exmoor’s biggest earner, bringing in an estimated £105m a year, and creating the equivalent of more than 2,000 full-time jobs, according to national park data — about a fifth of the area’s entire population. Over a tenth of visitors to Exmoor are from overseas, up from 5 per cent in 2005, with significant numbers of Dutch, German and Belgian tourists, according to Visit Exmoor. The tourists, too, rely on the farmers maintaining the landscape they so enjoy, as do a whole host of other businesses, from veterinary practices and agricultural machinery suppliers to hedgers and thatchers, supermarkets and chemists.

Exmoor after Brexit - a test bed for Britain's land policy

“Kill the farming, and you kill all the dependent businesses,” says John Prideaux, who retired from British Rail in the 1990s and now farms the local Exmoor cattle, Devon Reds, near Timberscombe. “The farming generates the landscape, and then people come to see the landscape, eat somewhere, sleep somewhere. If the support system stopped, the farming communities on Exmoor would simply collapse.”
Julie Edwards, of Mole Valley Farmers, which supplies agricultural products, says her business is “symbiotic” with the farmers on Exmoor. “We are absolutely reliant on them. If their family businesses aren’t successful, then we can’t be successful either.” Run as a co-operative, Mole Valley Farmers turns over nearly half a billion pounds a year, and is a significant local employer. Founded in South Molton in 1960 by a group of farmers, it now employs more than 2,000 people at 60 stores in the south-west and beyond.
At Acorn Saddlery, just down the road, founder Frank Edwards and his son James tell the same story. Although the business sells its equestrian and shooting products to customers all over the world, at least half of its customers are involved in some way or another with local agriculture. But, like the farmers, the Edwards see opportunities for their business from Brexit. “Our leather goods are respected all over the world,” says Frank Edwards. “We’re hoping that more will be made in this country and supported in this country.”

John Prideaux and his herd of Devon Reds © Nicholas JR White

Others are more anxious about what Brexit might mean for this rural community. Trudi Spratt runs a recruitment consultancy outside South Molton. She says there has been a fall in job applications since the referendum. “We’re not getting as many people applying. People are staying [in their current jobs] because they don’t know what’s going to happen. And we are losing skilled European workers.”
She believes that, to keep workers in the area, wages will have to rise. “Salary increases are inevitable. It has to happen for us to be able to attract people into work, but unfortunately that is going to hit the smaller employers quite hard. Employers have had to raise wages already to attract staff, across the board, whichever level we’re looking at.”
At Visit Exmoor, the official tourism body for the region, marketing manager Jennette Baxter is also concerned about the future. “What is our biggest worry is the uncertainty [over what happens after Brexit], that’s the biggest frustration, but we’re also concerned about possible barriers to international and EU visitors. Are pet passports going to be revoked? Are there going to be longer queues for customs? Another issue is the challenge of finding seasonal workers. One hotel near Dunkery Beacon has already found it difficult to recruit and is thinking about opening for fewer hours.”

Exmoor’s Ambition estimates the cost of its proposal at £16.9m a year, £1.5m more than existing EU farm and environment support and administration costs — justified, it says, because it would not just protect but also enhance Exmoor’s beauty and productivity for future generations of workers and visitors.

Sarah Bryan of the Exmoor National Park Authority © Nicholas JR White

One of the aspects farmers like most about the proposal is that it brings back local accountability. Rather than hands-off monitoring from a distance, compliance would be measured by results, and overseen by farm liaison officers. “Fairly quickly, we saw [Brexit] as a massive opportunity,” says Sarah Bryan, chief executive of the Exmoor National Park Authority. “Because the [CAP] rules are so centralised, they’re either coming from London or from Brussels. It’s a bit ‘nanny knows best’, telling people what to do, without any clarity or understanding about what we’re trying to achieve . . . One of the positives of Brexit is that we could shape our own destiny on Exmoor and, if there is a support mechanism, have something that we all want.”
Robert Deane, a rural consultant who advised on Exmoor’s Ambition, says the proposals do not suggest giving carte blanche to farmers, but that their voice has been for too long absent from discussions about national agricultural policy. “It seems bizarre that, at the moment, there is no conversation with the people who are actually doing it about whether it makes sense,” he says.
Wydon Farm was one of three farms to have its natural capital measured during the design phase of Exmoor’s Ambition. Dave Knight’s family have farmed here for hundreds of years and are long-term tenants on the National Trust’s Holnicote Estate on the north coast of Exmoor, rearing beef cattle and sheep on 1,400 acres of moorland and pasture. From the top of the hill on which Knight’s farmhouse perches, the view encompasses not just the Bristol Channel and the Welsh coast but also Dunkery Beacon and the Butlins holiday camp in Minehead.
The natural capital assessment revealed a rich and complex variety of assets on the farm, some of which surprised even Knight’s 77-year-old father. Rating Wydon Farm’s dramatic coastal and landward views as well as its productive agricultural land was one of the tasks the assessors set themselves. They also took into account its literary associations: Coleridge was famously woken from his dream of Kubla Khan in 1797 by the “man from Porlock”, just down the coast.

Dave Knight at Wydon Farm © Nicholas JR White

After the second world war, the land had to be reclaimed for farming, as it had been used as a tank-driving circuit — the farm’s moorland is dotted with slit trenches for infantry training. Other historical features include quarries, dew ponds, burial cairns, a possibly medieval field system, 16 bomb craters, Iron Age hill forts, a 16th-century gun encampment, Mesolithic and Neolithic flint implements, and the site of the Domesday Manor of Myne or Mere.
The 630-mile South West Coast Path runs along the borders of the farm, which is criss-crossed by other tracks for walkers. Wydon has the only working water meadow on Exmoor, and hosts the rare high brown fritillary butterfly, red kites, which have been reintroduced into England after facing national extinction, and the Dartford warbler, which was reduced to just a few pairs in the 1960s.
Knight says it is a challenge to make a living from this harsh terrain, but he believes the proposals in Exmoor’s Ambition would support his family’s desire to look after all the elements of the land they farm: its moorland as well as its pasture, its birds as well as its cattle, and its beauty as well as its ­history. “Farming under the current system is done by dates and numbers, with farmers being told how to achieve the end result,” he says. “Rather than just sit back and wait for someone else to decide our future, this is a golden opportunity.”

Proposals such as Exmoor’s Ambition face criticisms. That devolving power down from national to local bodies risks conflicts of interest and loss of accountability. That it is difficult to place an objective “price” on the value of intangible assets such as historical significance — or to weigh up the public benefit of hedge-laying versus, say, coppicing. It will also be complicated to ensure a fair and consistent system of incentives across the UK. Perhaps most importantly, in a time of continued austerity and deep government cuts to everything from police numbers to children’s services, the agricultural community will face brutal competition for the funding it needs.
Other national initiatives will also influence policymakers. A new agriculture bill, expected to set the broad parameters of post-Brexit farming policy, is due later this year; the journalist Julian Glover is leading a review of England’s 10 national parks and areas of outstanding natural beauty.

Pastureland on Wydon Farm © Nicholas JR White

Local groups warn that, if the opportunity to design an ambitious and appropriate new approach to the countryside is missed, the consequences could be dire. “If financial support is lost,” says Sarah Bryan of the Exmoor National Park Authority, “farms would be abandoned, and the moor and agricultural pasture would be overtaken by bracken, rhododendron and other invasive species. More subtly, you would see over time a change in the feel of the place, because the people who managed the land would not be able to afford to stay here.”
But local politicians are confident that national government is starting to get the message. Heaton-Jones, the MP, says that in the past Exmoor’s needs have been ignored by governments of all colours, but that “the battle has been won that subsidies are not a handout to farmers. They are a fundamental part of stewardship of the landscape.
“What you can’t do is seek to preserve it in aspic, and sometimes in the past that has been the view of national parks,” he adds. “I see Exmoor and its ­hinterland as a living, changing thing.”
Sarah Gordon is the FT’s business editor
Why Brexit could be good news for Britain’s farmers | Financial Times

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