To say that farms are likely to be decimated by Brexit is inaccurate, because ‘to decimate’ means to cull one in ten. DEFRA was reported to be expecting at least one in four farms to go bust as a result of Brexit. Even DEFRA’s dire forecast may have been too generous. Last year, former National Farmers’ Union (NFU) Economist, Dr Séan Rickard, wrote a report in which he estimated that up to half of all British farms could prove unviable post-Brexit. It’s difficult to understand how we will fulfil the government’s vision of ‘a more dynamic, self-reliant agriculture industry in which British farmers, growers, land managers and foresters play a vital role in protecting the countryside, while providing world class food, plants and trees,’ if half our farms go bust.
Why would they go out of business? It’s a combination of three main factors. First, the government has announced an end of the EU’s Basic Payment Scheme (BPS), an income support scheme for farmers, with a gradual reduction every year until 2028. In total, 75 per cent of the EU’s Common Agriculture Policy (CAP) funding was spent on BPS. As farming is a high-risk activity susceptible to ‘acts of God’ — blight, disease, extreme weather, floods, etc. — the payments were put in place to insulate farmers from these risks by ensuring they had an adequate income and, at the same time, to protect farming capacity. This was considered to be a public good because it contributed to food security. Dr Rickard’s study found that BPS payments account for 60 per cent of the average farmer’s income, and are the only source of income for 40 per cent of our farmers.
There will be a new Environmental Land Management Scheme (ELMS), but it will be measured against environmental improvements, not farm income. Furthermore, the government has given no indication of funding levels and, crucially, ELMS is not contingent upon active farming. It is fair to say, therefore, that rather than being a replacement of BPS, ELMS is an evolution of countryside stewardship schemes. While that is a welcome positive, it does not negate the major negative from loss of BPS. Farmers will no longer have a safety net and farming itself will become a much riskier business.
The second factor is the imposition of tariffs on British products. In the event of no deal, these will be imposed by the EU and other countries we traded with as members of the EU and with whom we still have no deal, either. These represent about half of all the countries we deal with. This is not a case of the EU ‘punishing us’. The EU is obliged to treat us like every other third country with which it has no trade deal, in order to comply with the World Trade Organisation (WTO) ‘Most Favoured Nation’ (MFN) rule. Put simply, MFN requires you to give the same terms to all of your trade partners, unless you have agreed other terms and signed a trade agreement to that effect.
The problem for UK farmers is that some of the tariffs on agricultural products are prohibitively high. Even assuming our farmers, particularly the smaller ones, have the bandwidth to cope with all the new Brexit bureaucracy, the Agriculture and Horticulture Development Board (AHDB) has calculated that the prices of some types of meat — frozen boneless mutton, for example — will increase by up to 70 per cent. This will make it uncompetitive with the produce of other EU countries, or that of the countries with which the EU has a trade agreement. Lamb producers will be particularly hard hit, as 96 per cent of their exports go to the EU. The National Sheep Association has said
“With a no-deal, that would become untenable. Farmers would stop trying to export the lamb and flood the local market, and would not be able to sell it.”
That might be good news for consumers in the very short term, as they would have very cheap lamb for one or maybe even two seasons, but UK lamb famers would soon go out of business, leaving consumers to rely on more expensive imports.
Trade deals themselves are the third factor, as these regulate, in part, what comes in to the country by way of imports. The UK currently has bans on food produced to low-welfare standards, including chlorinated chicken, antibiotic-laden beef and ractopamine*-packed pigs. Furthermore, the government pledged in its manifesto not to compromise on our food, farming and environmental standards just to get a trade deal. One final protection, as George Eustice recently reminded parliament, is the sanitary and phytosanitary chapter in any trade deal itself, in which each partner lays out their minimum standards for food production methods.
Despite these reassurances, both farmers and consumers fear these standards could be undermined by trade deals, particularly with the USA. There has been loose talk of a dual-tariff regime, which would mean low-welfare produce would be allowed into the country, but on a higher tariff. Naturally, that’s unacceptable. There’s a binary choice here: either we let low-welfare food products into the country, or we don’t. A tariff is neither here nor there — not that the WTO’s MFN rules allow us to discriminate between one country and another based on farming methods, anyway. Bans can only be enforced on the grounds of public health, when something is unfit for human consumption.
A whopping 95 per cent of the British public wants to maintain current food standards. Yet it looks like Brexit will deliver lower food standards, to the detriment of public health, farmers, farming, animal welfare, and the environment. Recent appointee to the Agriculture and Trade Commission, British-American trade lawyer and head of the International Trade and Competition unit at the Institute of Economic Affairs think tank, Shanker Singham, says, if we wanted to keep high standards, we “should never have left the EU.” In recent appearances before Select Committees he has made it clear that he favours ditching these standards, which he considers to be protectionist, in favour of what he calls ‘trade liberalisation’. A word like liberalisation may sound positive, but what it really means in this context is not allowing anything to get in the way of market forces. Thatcherism 2.0.
Mr Singham’s philosophy is very much at odds with that of our candidate to be the next Director General of the WTO, former International Trade Secretary and North Somerset MP Liam Fox. In a recent interview, he said, “Trade is about more than the exchange of goods and services; it’s about values.” For us Brits, those values may include ensuring farm animals live a fulfilled life as free as possible from suffering, selling the bulk of our produce locally or in our nearest geographical markets to shrink our carbon footprint, and having strategies to combat both food insecurity and food poverty.
Then there’s our famously scenic and lush countryside. Some might take it for granted and think it is the way nature intended it: beautiful. That is to underestimate the work of our farmers. Our countryside would look very different, if it weren’t for them. Farmers manage 71 per cent of the UK’s land, enhancing it by maintaining habitats for native plants and animals, preserving footpaths, protecting watercourses and supporting wildlife species.
Who will win this battle of philosophy? Will we trade off qualitative aspects of life that are beyond price for the sake of a tiny amount of GDP growth? (0.16 per cent of GDP over 15 years for the US-UK deal, for example.) Or will we look at trade policy holistically, and consider each trade-off carefully, balancing the potential gains from trade for a few, with the quality of life for all? Sadly, the Agriculture Bill – our first in fifty years – does nothing to help British farmers, British farms or British product standards, so on the face of it, it looks as if the Shanker Singhams of Johnson’s regime are winning the argument.
It doesn’t have to be this way. The Agricultural Bill is still in parliament. There remains a small window of time and opportunity to shape it. Ideally, there needs to be an amendment that includes the measures we want taken to prevent our high food, farming, animal welfare and environmental standards being sacrificed on the high altar of free trade. Write to your MP. Join local (socially distanced) farming protests. Talk to your friends and get them to join in too.
“But they voted for it…” Not all of them! Farmers Weekly reported in 2017 that farmers voted roughly in line with the population at 53-47 per cent. Farming is a hard life and Brexiters like George Eustice promised them life would be better outside the EU. Besides, this is one of those proverbial ‘cut off your nose to spite your face’ situations. If you do nothing, YOU will end up with low-quality food on your plate and you will be complicit in a lower quality of life for farm animals, and possibly even regression on environmental protection.
* Ractopamine is a drug developed to treat asthma in humans but was found to boost growth, especially of leaner meat, in pigs. It often causes the animals to collapse and because of stocking levels – intensive farming – there isn’t the space to remove them from the rearing pens humanely. The drug has been found to concentrate in the internal organs of the pigs which is why it’s banned in China, where pork offal is eaten widely.