Brexit Compressed

Regardless of political allegiance, it is impossible not to admit that  Brexit and agriculture will impact on each other in the coming years. Just prior to writing this article, I attended the CLA breakfast at the Bath and West show – in turn just prior to the recent general election. It was encouraging to see and hear UK Farming’s two principal representative bodies speaking on the same platform. The main thrust of the discussion was that the sector needs to lobby MPs now to emphasise how important UK farming is – be it via the CLA’s “The Countryside Matters” campaign or the NFU’s “Back British Farming” campaign.

This was all very laudable and of course another example of the sector preaching to the converted, there was hardly likely to be any objections from an audience who largely rely on farming for their living. However, there was an elephant in the room – the UK government is trying to spend less and even if it has spare money or decides to increase tax revenue, it (or at least a majority of the voters) has priorities for spending that do not include farming. All but the most blinkered would surely agree that education, health and security are more important than subsidising food production or protecting the environment.

This is not to say that the latter two objectives are not important. However, the era of needing to subsidise food production in the Western world has passed – other than if the wider global political instability increases and food security become strategically more important again. When someone cannot afford all the food he or she wants to buy in the supermarket, it is wholly unrealistic to expect that person to support the use of public money to protect the environment or to reduce the price of food for everyone. The two uses of public money are at the opposite extremes of Maslow’ hierarchy of needs – one is a “need” and one is a “want”, or one is a “need to do” and the other is a “nice to do”.

So the point of this article is not to decry the efforts of CLA and NFU at all, nor to say that British Farming is not important – far from it; it is but to say that the reality is that no matter how important the farming sector and wider countryside are too many, the political situation means it is highly unlikely that post-Brexit, UK farming will receive anything other than a fraction of what it receives via the EU Common Agriculture Policy. That fraction is also likely to be directed away from commercial farming towards the environment.

Brexit and agriculture

Brexit and agriculture; a likely reduction in subsidies?

The current government has pledged the same amount of public cash for the UK farming up to the end of its term – 2022; interestingly it has already provided wriggle room by only stipulating the same total cash to the same complete sector. The position for any individual farm/farmer may well thus change from 2020 onwards (i.e. when the UK leaves the EU).

There will be much debate and commentary over the next 2 years about Brexit and agriculture. and the implications for UK Farming. We have the CLA and NFU fighting for us, but at an individual commercial, lowland, farm level, I would advise to not hold out much hope of anything other than a substantial reduction in subsidy income from 2020 onwards.

As a start, it would be good to understand the performance of the business without the Basic Payment – not just in simple headline amount terms. If you are a dairy farmer how much per litre is it worth to you (probably less than 0.75p), if you are a cereal farmer, how much per tonne (probably less than £20/t wheat) and if you are a beef or sheep farmer, how much per kg (very difficult to generalise what this may be). That can start putting the loss in context and help working out what to do to mitigate that loss. Taking the dairy sector alone, less than 0.75p/litre does not seem a large amount when milk price has fluctuated by nearly 10p/litres in recent times.

The loss of subsidy income is certainly going to be another challenge for UK farmers – but the time and emotion spent between now and losing it (say 3 years) will be far better spent planning for the change than by metaphorically “shouting” that we still want the money. In the meantime, it is right to leave the representative bodies to do the shouting as they will do so professionally and at the right level in government – but I would wager that it will ultimately be unsuccessful for the typical commercial, lowland farmer. To that end, I would not encourage anything other than pessimism in relation to the prospects of UK farm subsidies post-Brexit.

As with any potential bad news, it is better to address and plan for it rather than worry about it or hope it will go away.

If you have any concerns regarding brexit and agriculture in the UK  and potential impacts, please do not hesitate to contact our expert agricultural team.

Futher articles on the impact of the recent election and Brexit include “The impact of the election result on care funding” and “Uncertain times for the United Kingdom

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