Post-Brexit UK Agriculture Sector - October update
Monday, 3rd October 2016
In this month's edition we look at how the debate has progressed since our review last month in relation to the post-Brexit Agriculture Sector in the UK.
The story so far…
Last month we reported that a great deal of the debate was focused on whether there would be subsidy support for farming post-Brexit and post-2020 (when Philip Hammond's stop-gap policy expires), and the form subsidy support would take.
As any subsidy support is likely to be targeted at supporting Government policy aims, debate has centred on what that those policy aims should be. The following recurring themes emerged during the period under review:
- Establishing food security.
- Securing energy security and carbon reduction.
- Protecting the environment.
- Securing opportunities for growth in exports.
- Increasing internal competition.
So what developments have there been?
Greenpeace had said in August that Leave campaigners and Conservative Party donors earned £4 million from EU farm subsidies last year, and stated "public funds need to be targeted on helping farmers facing real hardship and in supporting schemes that protect our wildlife, prevent floods and store carbon" (reference).
Greenpeace re-invigorated this aspect of the debate by publishing its investigation which reports the significant overlap between being appearing in the Sunday Times’ Rich List and owning or controlling an entity which is one of the top 100 recipients of the single payment scheme. The Taxpayers' Alliance joined the criticism levied by Greenpeace that the "super rich" should not be paid public funds on the basis of their land ownership.
Whilst the findings of the report might not surprise many in the Agriculture Sector (the raw data is available on the DEFRA website), the report shines a light on a key element of the basic payment scheme: the link between payment of subsidy and achievement of policy objectives is not transparent.
In a sense, the wealth of a recipient of subsidy is not relevant provided that the subsidy is expended in such a way as to produce a "public good" as set out in well-defined policy objectives, which is a point apparently accepted by Greenpeace, the Tenant Farmers' Association and the Country Landowners' Association.
All the above is set against a backdrop of 36 Conservative MPs writing a letter to Theresa May, urging for a "strong stance for protecting wildlife and water" (reference). The National Trust has also called for the subsidy regime to be overhauled so that faming has more of a positive environmental impact (reference).
It is clear that there is much momentum behind the idea that any farming subsidy system should primarily target and promote environmental protection.
If developments over the past month have any sustained bearing on the future course of post-Brexit Government policy, perhaps the future subsidy regime would include the following features:
- A (more) pronounced emphasis on achieving environmental objectives.
- Minimal payments which relate to the (mere) owning or controlling of land, with a proportionate increase on the amount of subsidy directed at achieving environmental benefits.
- A requirement on the claimant to show that the subsidy has been expended on delivering the required environmental benefits.