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This article was published prior to the publication of the post-Brexit agreement between the UK and EU which covers the relationship between the UK and EU following the end of the implementation period (commonly referred to as the “transition period”) created by the European Union (Withdrawal Agreement) Act 2020, and should be read in that context. For up-to-date commentary and information on our services, please see our Beyond Brexit page.
Since the referendum result has been known, speculation has been rife as to what "Brexit" really means for the UK and most if not every sector of the UK economy - including the Agriculture Sector.
It is widely acknowledged that Brexit will, in one way or another, mark a watershed in the fortunes of the Agriculture Sector and the rural economy. After all, UK membership of the EU touches on the UK Agriculture Sector in all sorts of ways - tractors and other agriculture equipment can be imported tariff-free from EU manufacturers, agricultural product from the UK can be exported to the EU, farm owners benefit from the free movement of a seasonal workforce when the labour is needed - to name but a few.
However, it is the future of farming subsidies which has been the focus of attention most recently.
For decades, British farmers - in common with other EU farmers - have been the recipients of subsidies under the EU Common Agricultural Policy, a protectionist policy designed to protect (amongst other things) the competitiveness of EU producers of agricultural products within Europe.
Philip Hammond, Chancellor of the Exchequer was quick to announce that the Treasury would replace any shortfall in EU funding to farmers until 2020. Mr Hammond's policy, with its 2020 deadline, can be interpreted as a short-term stop-gap to tide over UK farmers over until a more permanent policy can be formulated, perhaps with one eye on the outcome of the Article 50 negotiations and the development of wider Government policy.
In the past month, the National Farmers Union ("NFU")1, the Country Landowners' Association ("CLA")2 and the Campaign to Protect Rural England ("CPRE")3 have each started to set out their visions of post-2020 agricultural policy.
The NFU, CLA and CPRE have reached a broad consensus that farming is an important part of the UK economy and the Government has a great deal of influence over the development of the rural economy in the UK - none of which should be at all surprising.
The following policy aims are common themes amongst NFU, CLA and CPRE post-Brexit literature, but there are evidently differing views as to which should take priority over others:
- Establishing food security - part of a long-standing ambition to reduce dependencies on food imports.
- Securing energy security and carbon reduction - over the past 10 years UK farms have played an increasingly important role in the production of low carbon energy - be it wind, solar, anaerobic digestion or biomass (such as miscanthus).
- Protecting the environment - the proximity of farming operations to sensitive environmental receptors and rural settings in general have long tied environmental management with agriculture.
- Securing opportunities for growth in exports - aside from the clear benefits of selling produce to other countries, some expound the idea that opening up food export markets will have wider benefits to the UK economy, opening up markets in which the UK can sell its services.
- Increasing internal competition - with an estimated 34,000 fewer farms that a decade ago, there are fewer farming businesses in competition with each other.
Time (and no doubt plenty of debate) will tell as to which policy aims are prioritised over others, and give shape to the post-Brexit subsidy regime.