Brexit’s impact on farming policy: why everything is about to change

20/07/2017

It’s fair to say that there is little information surrounding Brexit and its impact that is clear to us. Mired in uncertainty, with a distinct lack of direction and decisions, one of the few things that we can say with any degree of clarity is that it will relegate EU subsidies for land to a thing of the past.

Although this may sound like something to worry about, it’s one of the few changes that ought not to overly concern us, for the subsidy system has long been criticised as being ill-suited to purpose – and rightly so.

What’s happened so far?

If you’re wondering what form such changes will take, let’s take a look at them in a little more detail. What has happened thus far is that the UK’s vote to leave the EU means that proposals have been triggered to implement the most significant overhaul in agricultural policy since the country became governed by the Common Agricultural Policy (CAP) in 1973.

Designed to provide a stable and sustainably produced supply of safe and affordable food, CAP was based on good intentions, and was meant not only to protect European citizens as a whole, but also to raise the living standards of farmers and agricultural workers, through creating subsidies to support them.

It did this and more, but problems stemmed from the way in which subsidies were distributed. The system favoured large landowners over small ones, and as a result, arguably encouraged inefficiency in farming practices. This meant that those featured on the Sunday Times Rich List unfairly raked in more than £10 million in land subsidies in 2016 alone.

The support they received, and continue to receive, is currently provided via a two-pillar system, with the first of these delivering direct support payments, and the second rewarding beneficial environmental practices through monetary incentives.

Although this all sounds rather positive, there is a reason that the UK’s main political parties unanimously share the view that direct subsidy provision must be reviewed, and the current system fundamentally changed.

Explaining this, the RSPB, who themselves earned £1,961,450 in single payments annually, said: “As a major landowner and farmer, we use the CAP funding we receive to deliver specific public benefits, such as managing vital habitats and providing a home for nature. The majority of the CAP though is still dominated by untargeted subsidies that provide little in return.

“As we move toward the EU exit door, we need to take the opportunity to create a policy that encourages other farmers and land managers across the country to do much more for the environment, and provides greater support for those who are already farming in ways that benefit nature.”

What are the proposed changes?

But what form is this likely to take? According to The Conservative Party’s election manifesto, subsidy support will remain unchanged until at least 2022, with no sudden alterations to agricultural land investment imminent.

Once changes are made, however, the system will be transformed into a one-pillar format, with payments awarded for criteria such as carbon sequestration, greenhouse gas reduction, public goods and woodland regeneration.

The aim of such changes would be to transition into a free market economy, where payment would only be awarded upon the basis of public good provision, rather than providing direct and unquestioning support for farmers.

The policy proposed by The Labour Party is a little different, focusing more on attempts to reconfigure funds for farming so that they better support community benefits, local economies, smaller traders and sustainable practices.

In one area, however, both are united: that changes must – and will – be made to alter and improve the current system.

A new agricultural landscape?

According to the experts, such policies would create an agricultural landscape resembling that which existed in the 1920s and 30s, but this is not necessarily a bad thing. During this period in history, it was a free market economy that existed, with little to no government involvement at all.

Both of the main parties – Labour and the Conservatives – shared a distaste for subsidies, and believed that agricultural issues were best solved through a laissez-faire approach. It is these same sentiments that are echoed today, with a desire to see subsidies moved away from wealthy landowners.

The downside to such policies was that when the Agricultural Act, which had preceded this period, was repealed, wages at the time fell by around 40 per cent, whilst productivity dropped, rural poverty increased, small farms failed and land was widely abandoned due to urban migration.

This is not a history that politicians are unaware of, but many experts claim that small-scale farm failure is not necessarily a bad thing, and will in fact spur farmers into aspiring beyond their current position and increasing their output.

A time of uncertainty

The truth is that we cannot predict with any degree of precision the nature of future policy, except to say that it will have a marked impact on the shape of agriculture in the UK.

Admittedly, this may be detrimental to small, unproductive farms, but it’s also fair to posit that the changes could be very positive for Britain in an environmental sense, encouraging greater numbers of farmers to turn to sustainable practices in order to help subsidise their incomes.

The reality is that if the Conservative manifesto pledge is upheld, farmers are looking at a very different landscape to the one they’re used to: one where they have to work harder, smarter and greener in order to see their businesses thrive.

Whether this will be good or bad for the country as a whole remains to be seen, but it could well mark the first step into a brighter future for the farming industry.