EU Referendum


EU Referendum: the price of farmers


03/11/2015



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For a measly £500, you can have a copy of Agra Europe's 70-page report report "Preparing for Brexit", whence we can learn that, if we leave the EU, land prices will crash,. British agriculture will face a traumatic shock, and 90 percent of the country's farmers will be ruined.

For your money, you can be comforted by the prospect of a wave of debt foreclosures by banks, akin to the America Dustbowl and the Grapes of Wrath, and a fresh seed of discord will be sown between England, Scotland, and Wales, imperilling the United Kingdom.

Alternatively, we can get the gist of the report from Ambrose Evans-Pritchard, who reminds us that British farmers currently receive 60 percent of their income from EU subventions.

For the Agra Europe scenario to work, however, the British government in a post-EU world would have to chop all subsidies at a stroke, with Agra Europe taking it as a given that David Cameron or any other British prime minister will do little to prevent such a bloodbath.

"What is certain", it says, "is that no UK government would subsidise agriculture on the scale operated under the CAP", an assertion which A-EP drily observes is "conjecture".

In fact, few Brexit advocates – including ardent free-traders – suggest that subsidies should be slashed. They accept that agriculture is strategic, even iconic, and that society has a special duty of care to farmers. Borrowing from Charles de Gaulle, Ambrose calls it, "une certaine idée de lAnglettere".

Yet, despite direct CAP payments to Britain averaging £2.88bn a year from 2014-2020, Richard North, author of the Death of British Agriculture (and known to some readers of this blog), says it is an "absurd assumption" that a post-Brexit government would slash farm subsidies, given the reliance of the UK food industry on agricultural feedstock as a raw material.

He notes that Owen Patterson, the former Secretary of State for Environment, Food and Rural Affairs, depends on dairy farmers for miles around to feed his enormous yogurt plant in Shropshire. His operations would be paralysed under any scenario described by Agra Europe, yet Mr Patterson is a leading champion of Brexit.

North says that the more likely outcome is that Britain would go in the opposite direction, increasing rural subsidies along the lines of Norway, Switzerland and Iceland.

This means moving away from production payments to a multi-pronged strategy that combines farming with rural tourism and conservation, intended to safeguard village life and stop the relentless depopulation of the land. "It costs more, but you get more bang for the buck", he said.

On the other hand, the National Union of Farmers (NFU) have so far refused to take sides on the referendum, deeming it impossible to make any useful judgment until the Prime Minister has revealed his EU negotiating demands and clarified what future policy will be.

Says A-EP, if the 55,000 members of the NFU cannot yet reach an informed conclusion on what is in their own vital self-interest, the rest of us can scarcely do so. And that is not a bad conclusion.

However, the NFU has produced its own report on the UK farming's relationship with the EU, which is a monument to Europhilia. There is no doubt that where its true loyalties lies. For it to be comfortable with leaving the EU, it wants assurances on whether we would have access to the European market, and under what conditions.

The NFU also wants to know what a future British agricultural policy would look like, particularly for direct support and, then, if we continue to have access to the EU's single market, but take a different approach on support to farmers, how fair competition for our farmers would be ensured.

Other things the NFU wants to know is whether Britain would be more or less open to imports and, because farmers rely so much on imported labour, they have a keen interest in immigration policy.

Whether it will take a position in the referendum is anyone's guess but their questions pose a direct challenge to those who eschew an exit plan and the detail that goes with it. One thing is for sure, if we are to have any chance of support from farmers and other special interest groups, we are going to have to produce some answers.