opinion WHAT SORT OF AGRICULTURE?
Since the vote to leave the EU, more than a year ago, followed more recently by the Prime Minister’s invocation of Article 50, the debate has largely raged around the proponents of Hard Brexit and Soft Brexit. It is not entirely clear how these two stratagems would impact
the agricultural sector and its suppliers, including the feed industry. The government has promised that payments will be maintained until 2020 but former farming and environment minister Andrea Leadsom said subsequently that there would be ‘a major policy overhaul’ when the EU subsidies stop. It is the nature of this overhaul which will principally concern the agricultural supply industry, and its livestock feed component. There is a spectrum of possible policy outcomes that will follow
the debate over the future of British agriculture currently getting underway. At one end of that spectrum is the continuance of the present support structure, shorn of its most egregious elements; essentially a restatement of the current system of agricultural support adapted to UK requirements. At the other end of the spectrum, agriculture would be largely left to the workings of the marketplace with the state intervening only when there were specific concerns regarding, for example, food safety. It is frequently a source of surprise to the uninitiated how much
of Farm Business Income comes from support payments, the Basic Payments Scheme, and, by definition, the small contribution to Farm Business Income made by the actual business of farming. The relative proportions vary depending on market conditions and the type of farm involved. It is the Basic Payments Scheme that attracts the ire of those who would see agriculture solely dependent on the marketplace. The scheme, damned as a subsidy, is reportedly a major target for people in some of the UK’s major policy making institutions including, so it is said, the Treasury. It is self-evidently the case that the agricultural supply industry in
the UK has a major interest in how the debate on the future of British agriculture develops. The size and structure of the agricultural supply industry reflects, to a significant extent, the size and shape of British agriculture as it has developed over the years. The latter process reflects, to a great extent, the intervention of the Common Agricultural Policy and the support measures it has instigated with regard to farming. It is a significant employer, especially in the more rural parts of the UK. The feed industry in particular is also a major investor in rural Britain in terms of the industry’s investment in feed milling capacity and associated activities. As such, the feed industry is an important
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contributor to the UK’s rural economy, a factor that needs to be borne in mind as regards the UK’s departure from the EU. That said, it is clear that the agricultural supply industry has a
vested industry in the shape of British agriculture post-Brexit remaining very much as it is at present. There are some features of the Basic Payments Scheme that have rightfully attracted the attention of the critics, even from those with a clear interest in the continuance of what can properly be described as the status quo. There is no reason why, after Brexit, that the UK authorities could not address these aspects. The alternative course of action would be to scrap the current arrangements and replace them entirely by an agricultural support system predicated upon specifically British requirements – or, alternatively, not to replace them at all. The impact that this course of action would have on the UK’s farmers, and on their suppliers, remains to be quantified but it is reasonable to suppose that the impact would be negative in terms of the volume and range of agricultural products readily sourced from within the UK – and on the volume of business accruing to the agricultural supply trade, including its feed manufacturing component. The impact upon the livestock feed industry’s employment and investment in rural communities would be substantial as would be the knock-on effects in other areas of the rural economy. It is clear that a detailed assessment of the consequences of a
complete exit from agricultural support is urgently required, both in terms of the direct impact on British agriculture and its suppliers and the knock-on effects on other sectors of the rural economy. While this could be carried out by the industry itself, it would seem appropriate for external participation to be incorporated, in order to counter the inevitable charge of conclusions motivated by an undue degree of self-interest. Given the timescale leading up to the due date for the UK’s formal exit from the EU, this process, albeit daunting, would not seem to be an insuperable objective. The interests involved, it must be stressed, are not just those
of agricultural supply industry; they are also co-existential with the interests of a much broader rural community. While the agricultural supply industry would be immediately and adversely affected by a decision to, as it were, pull the plug on support for agriculture, it needs to be recognised that there would be adverse effects way beyond those immediately involved in farming and farm supply. Those shared interests must be urged upon those with the ultimate responsibility for shaping the future of British agriculture following the UK’s exit from the European Union.
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