Farmers are glad to possibly get rid of the Common Agricultural Policy, but Brexit enthusiasm stops here

Sir Peter Kendall was speaking at a Stratford4Europe event held in Stratford-upon-Avon on British agriculture and Brexit on January 10. The farmer and former officeholder has been talking about what the decision means for the industry, but also about the driver in the Brexit car.

A few days later, I also interviewed Mrs Alex De Ruyter and David Hearne, both economists at the Centre for Brexit Studies at Birmingham City University to dig a bit more into the topic. 

I don’t think anyone was expecting me at this conference. I was some dark brown-haired outlier in a grey scatter plot. I had to be further on the chart anyway so the main data points would not be annoyed by my trend-spoiling live-tweeting behaviour.

I just showed up at a conference in Stratford-upon-Avon given by Sir Peter Kendall. Pro-EU group Stratford4Europe organised the event. Sir Kendall was the President of the National Farmers’ Union (NFU) from 2006 to 2014 and is now Chair of the Agriculture and Horticulture Development Board (AHDB).

A Commonly disliked Agricultural Policy

He is to speak about the impact of Brexit on agriculture. He starts his conference by the only topic that generates much enthusiasm about Brexit and agriculture: an eventual reform of the EU’s Common Agricultural Policy (CAP), which gives subsidies to farmers according to their production and, to a lesser level, their environmental compliance.

Although Sir Kendall is confident there is some consensus on reforming, he warns the audience that will probably not be accomplished without pain in the acres:

Some would be glad to seise this opportunity for an agricultural policy for the UK by the UK, but this would not be that easy as we would probably need to settle a policy for four regions. But the opportunity to develop a new policy is still amazing for us in all cases.

As hard and complicated as negotiating a brand new nation-wide regionally-nuanced policy can be, he tells us that, as of today, the discussions around it did not progress much:

As we went around the country [during the last election], I was amazed, talking to a number of MPs, by how many people wanted to complain about different aspects. We never got into the debate about what the future was going to be, it was always what was wrong with the current system.

Nevertheless, David Hearne, from the Centre for Brexit Studies, has a lot to say about what in the first pillar of the CAP makes it wrong and inefficient:

The intention of this payment is to support and stabilise farmers’ income in the face of volatile markets for agricultural products.

Unfortunately, in practice, this creates incentives for farmers to farm more hectares (in order to earn more direct payments).

In following this signal, they push up the value of agricultural land meaning that, in essence, European taxpayers end up subsidising rural landowners.

Spending taxpayers’ money to protect an uncompetitive industry?

But Kendall’s thoughts about Brexit get bleaker as he moves on. For one thing, continental Europe is a significant market, especially for proteins like sheep meat, lamb and beef. The industry would undoubtedly suffer from leaving this market and experience new tariffs on exports:

The fastest growing lamb markets today are Germany and Poland – we [also] export a lot to France and Spain. Keeping access to these markets while having our own agricultural policy would be the best of both worlds.

We keep going with tariffs on imports and food autonomy, during which he will have some issues in balancing his desire for “more British food on more British plates” and letting the market forces work. Britain’s food autonomy is lower than in other sunnier, more arable lands of continental Europe, to be sure.

He would love the consumers to be convinced to accept a little trade-off to support more local farming – not necessarily by letting the industry becoming “niche producers” to differentiate itself too much from the much more competitive foreign countries.

In his views, a hard Brexit would be devastating for the industry, especially with the current administration that is averse to financial support and subsidies, but Kendall estimates it would be necessary for the industry, at least to let it adapt.

The European Union currently has high tariffs on imports, so if the UK were to leave it and not bother to implement new ones would certainly hurt the industry, especially from countries like the US, Australia and New Zealand, this latter being famously known for having more sheep than kiwis.

But researchers at the CBS diverge from this view if one considers the consumer. While they recognise that the Brexit, especially a hard one, might cause the industry to suffer a bit, “no question about that” (especially sheep meat, beef, lamb, mostly produced in the West and Scotland), they would rather advise consumers to bear in mind that British agriculture is fundamentally uncompetitive compared to many countries: dull climate, lack of space and other countries’ lower standards.

In other words, it would be hard to justify financial support or tariffs that would just end up making the taxpayer/consumer spend more. This all depends on what kind of Brexit we will have, as I am often reminded.

The industry might have an NHS-like issue

I have been involved in a couple of data stories about its impact on the NHS workforce, more or less. It turns out that the Britons’ decision to leave the European Union might have disheartened a few European workers from joining the public sector and work to enhance the quality of life of the UK voters.

The farming industry also employs a lot of migrant workers, for its arable farming, mostly from East European countries.

Before Brexit, the lack of worker supply for hard-to-fill positions was already a problem, but Sir Kendall seem to think this issue can only grow in proportion. The financial incentives diminished a bit, and, like the NHS European workers, the workforce may feel a bit less welcome. The former NFU leader also does not believe automation will solve everything. Below, Sir Kendall was replying to Environment Secretary Micheal Gove‘s vision for the future of British agriculture:

The notion that with the tip of a finger we can invent robots to do this work for us is I think crazy. And we do have fantastic facilities, but we do depend a lot of migrant workers, and surveys show farmers are struggling to get the crops picked, but whether that’s a combination of the change of the exchange rate, whether it’s a combination of feeling not welcome, this I am not sure.

We see it already in the health services. But farming, how do we mention, raise awareness about farming, making it feel like a vital part of the economy? And not regarded as being dirty, low-paid work we don’t need. And health services and other parts of the economy are treated at higher risk.

It might be harder than it is already to recruit enough crop harvesters. Paying them more might be an inevitable option.

Although it is far from impossible, David Hearne and Alex De Ruyter aren’t that worried about price fluctuations that would follow. They did seem to believe migrant workers might be a slightly bigger issue than it would have been otherwise (without Brexit) – although they were confident that a higher pay might retain some, despite political and cultural turn-offs.

Some arable farming might suffer if migrant labour supply gets affected by Brexit, Hearne says, but I don’t think that is going to be much of a big deal.

Vehicles don’t head to the wrong place, drivers do

Sir Kendall had a lot to say about the current government’s vision with Brexit, green policies and subsidies, so much that he seemed, in the end, to be more excited by Brexit than Micheal Gove, even though he “still believe[s] we are making a massive mistake” with the former.

Hearne also agrees that this might all be up to the driver’s will, but also his capabilities.

It all depends on what kind of Brexit we have. How the government negotiates Brexit, how we choose to sort of play things in the longer term. There are the choices the UK make and the choices that the EU make.


Leave a Reply