No Deal Benefits for Farmers

BY CHARLES MACKIE

The biggest threats to farming that a no-deal could bring are traditionally quoted as follows: 

  • Loss of a tariff-free market. The UK will by default revert to the World Trade Organisation (WTO) rules until Free Trade agreements are signed. This will require goods to be exported and imported under the Most Favoured Nation rules with a range of tariffs applied to those goods. The tariffs for animal products are amongst the highest in the range. Currently, a third of the lamb produced in Wales is exported to Europe.
  • Avoiding friction at the border. It will be imperative when dealing with agricultural products that the UK maintains streamlined access and administration to the EU. The Common rule book for all goods will need to be agreed to facilitate agricultural trade, whilst at the same time securing plant and animal welfare. The EU has warned that increased border controls would mean transport between the UK and EU would be “severely impacted”, with the possibility of “significant delays”.
  • Loss of important source of labour to specific parts of the supply-chain, such as horticulture.

In fact a no-deal Brexit could prove to be good news for many farmers: 

Brexit could be a real bonus for many farmers. Leaving would allow the UK to design its own Agricultural policy, as outlined last September in the Agriculture Bill. Farmers will have the capability to negotiate own agreements with non-EU countries. 60% of the UK’s trade is with countries outside of the European Union. British farmers will be more competitive as they won’t be tied down by EU red tape; subject to lots of rules. Same subsidies could be paid to farmers from the government as those provided by the EU. This will be beneficial to the British tax payer as they will be paying half as much tax per year into CAP (the Common Agricultural Policy). There can be freedom from existing EU regulations and policies – freedom from the burdens and complexities of the CAP. New policies can be created that are more sensible and suited to this country. If an EU free trade deal is struck, the UK will still be able to enjoy and have access to the EU – trading freely with neighbours who rely on the UK for export. Also farmers should see more loyalty from Brits buying their products over foreign imports.

Contrary to widespread warnings of the devastating damage that could be inflicted on agriculture by the UK crashing out of Europe without a deal, the weakening of sterling because of Brexit uncertainty has added £20 a tonne to grain prices – a boost that could be wiped out at a stroke if a deal is reached and the pound bounces back. Short-term, many sectors could do really well and for quite a few farmers – cereals growers in particular – a no-deal Brexit could be good.

As George Eustice MP spelt out in the Yorkshire Post Brexit is an opportunity for farmers:

“Longer term, as we leave the European Union and re-establish control of domestic policy, Farmers have a once in a generation opportunity to design an agriculture policy that really works for the UK -gradually moving away from “direct payments” or subsidies and instead putting in place a framework of incentives and rewards for the delivery of public goods.

There has been a growing specialisation on farms leading to more problems with soil erosion, the build-up of pests and disease and the loss of organic matter, or humus, from the soil because not enough farmyard manure is being used on arable farms. We envisage that the cornerstone of our future farming policy will be a new system of financial incentives and rewards for environmentally sensitive farming and promoting good soil husbandry will be a key plank in that policy.

The CAP has driven up the cost of land and rents, making it harder for young farmers to enter the industry. Brexit provides a watershed moment to help farmers become more profitable; to help the next generation of farmers secure land and get on; to help farmers invest in new equipment and deploy new technology; and to support farmers coming together in a collaborative way to fund research and development or to strengthen their position in the supply chain.

Farmers want more independence.  Many say they do not want subsidies. All they really want is the ability to get a fairer share of the value chain and help to  invest so they can reduce their costs and improve their productivity.

There is a dependency on direct payments at the moment and so we propose to phase them out gradually over a number of years, alongside rolling out a new, improved policy. However, the vision for the end state is an exciting one and I hope that farmers will help us to build it.”

Sheep farmers fear most from a WTO departure and they hate the uncertainty that a lack of a deal has caused. This uncertainty makes their business especially difficult, as sheep farming involves so much planning and prediction. Once a deal is achieved or no deal happens that uncertainty will begin to ebb.

Direct payments will eventually be replaced by a new Environmental Land Management System which will be developed and trailed with farmers. Under the new system, farmers and land managers who provide the greatest environmental benefits will secure the largest rewards.

No Deal will have its shocks and surprises but it may actually be the best way to rebuild a system that right now fails too many farmers and gives poor value for money to UK taxpayers.

Charles Mackie is a farmer from West Wales.  

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