opinion A MOMENTOUS YEAR AHEAD
2018 is likely to be a momentous year for British agriculture and for the industries that supply the inputs that British farmers use in the production of grain and livestock products: livestock feed, fertilizers, agrochemical products and a vast range of other inputs. Essentially, the decisions that are made in 2018 will determine the
size and shape of the UK’s agricultural supply industry for many years to come. Indeed, as has been pointed out in many quarters, the UK has, for the first time in forty-five years, the opportunity to devise an agricultural policy that is suited to its own characteristics and requirements, rather than being subject to the much criticised framework of the Common Agricultural Policy arbitrated by Brussels. It remains a fact that the foibles and failings of the CAP are regarded as a major factor leading to the UK’s electorate’s referendum decision to leave the EU. What were the electorate’s perceptions that led to that
decision? Undoubtedly, ‘subsidies’ played a major role. Agriculture in general
and farmers in particular were seen as undeserving recipients of large sums of public money. It is true that there is much wrong with the way that the payments are administered, including the widespread perception that some recipients receive payments simply for owning land. There is a danger here that pure gut reaction to the present system will lead to flawed and damaging decisions about the future of British agricultural policy. Indeed, it of paramount importance that those future decisions are approached rationally and with consideration of the UK’s interests in their entirety. It is disappointing but, perhaps not surprising, given the
complexities of the issues involved, that no clear indications have, as yet, emerged from Government as to the broad shape of future agricultural policy in the UK. There are some pointers. Michael Gove, recently appointed DEFRA Secretary of State, is said to favour increased attention to environmental matters, with payments to farmers being increasingly directed to this end, a theme elaborated on in his address to the recent Oxford Farming Conference. Another viewpoint concerns the attitude of the always influential Treasury, said to be ‘viscerally opposed’ to the current system of ‘subsidies’ as administered through the Basic Payments Scheme. As this publication, in both the current and in previous issues has observed, these payments make up an important, sometimes dominant proportion of the Farm Business Incomes received by British farmers – these incomes comprising of what farmers earn from the business of farming, agro-environment payments, income from diversification and payments from the scheme. It is this fact that focuses the attention of policymakers on one simple question: what do we require from British farmers?
PAGE 2 JANUARY/FEBRUARY 2018 FEED COMPOUNDER The UK’s abolition of the Corn Laws in 1846 resulted in a
fundamental realignment of British agriculture in the succeeding years of the nineteenth and early twentieth century. The medium and long- term effects on Britain’s arable farmers were cataclysmic in terms of falling prices and production, to say nothing of the effects of the disruption of food supplies during the U-boat war in 1914-18. No one is seriously suggesting that the UK faces a similar scenario in the near or medium-term future or that all measures of support for agriculture in the UK should be terminated immediately following the UK’s exit from the EU. However, this does not gainsay the need for a broadly based assessment of what the UK requires from its farmers and the industries that supply them. The agricultural supply industry and its representatives must and,
indeed, are taking a leading role in getting the debate underway. The industry should not be shy in admitting that it has, at least, a vested interest in the current system. It is likely, in the event that there were to be a significant cut to payments in a British version of the Basic Payments Scheme – or what in effect are what we may term ‘production subsidies’ – that agricultural product would be reduced, with the concomitant effect that the size of the agricultural supply industry would also shrink. In the national context, one likely knock-on effect would be a further reduction in the proportion of UK food supplies sourced from within the UK and a reciprocal increase in that sourced from overseas. There are interest groups within the UK that might welcome this outcome, either from self-interest or from an ideological standpoint such as ‘free trade’, a not insignificant lobby in the present day. Echoes from the debate over the Corn Laws in the mid-1840’s? The purists on either side of the debate will argue their case at
the extreme ends of the policy spectrum where the future of British agricultural policy is concerned. At one end of the continuum lies the prospect of a British
Agricultural Policy in most respects identical to the present regime albeit with some minor adjustments, reflecting the most egregious defects in the current regime. At the other end of the continuum stands the vision of a ‘minimalist’ agriculturist regime where food destined for British consumers would be sourced from the cheapest supplier worldwide. Common sense would indicate that the most likely outcome will lie somewhere in between the two extremes and it is the location of the outcome which is likely to be the main focus of the debate. It is not simply a matter of whether, following Brexit, consumers in
the United Kingdom are to be regaled with the delights of chlorinated chicken from the United States. The real issues are much more complex and deserving of discussion.
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