Little certainty in farming’s big agenda beyond Brexit
The debate about the consequences of Brexit has, understandably, focused heavily on how trading conditions may change, particularly for manufactured goods, the supply of services and the cross-border movement of people.
This month, an overdue intervention added another major area of uncertainty stemming from Brexit. The Department of Agriculture (Environment and Rural Affairs) has opened a critical debate about how the farming industry will adjust to life without the CAP (Common Agriculture Policy).
A 68 page document outlines a range of consultative proposals, which now await responses from interested organisations by October 10, 2018, so that the civil service can prepare ideas — belatedly — to put to the minister (assuming that there will be a minister). This ‘green paper’ is an incomplete opening gambit.
What happens when the CAP is gone is a difficult and costly problem which must reconcile divergent interests.
Decisions on the devolution of farming policy and the method of deciding the level of government spending on farm support are critical to the debate about the future of farming policy in Northern Ireland.
The consultation document works on the assumption that farm policy will remain devolved in NI and potentially may differ from decisions made for England or Scotland.
That assumption may be justified where farm support policies are based on farm size or other defined non-market related applications.
The consultative paper presumes, reflecting UK government expectations, that a system akin to the out-going CAP system of Single Farm Payments (SFP) will be introduced. The consultation describes the replacement system as a Basic Payments Scheme which will maintain a farm support budget based on the present system of payments per hectare, which will be constant in cash terms for the years 2020-21. A replacement scheme is to be devised for 2022 and onwards.
Presumably the UK government may also introduce some forms of market support, if only to regulate occasional shortages or surpluses, which will of necessity be regulated on a Uk-wide basis. The likelihood is that the greater part of farm support will not be market product related but will reflect policies to enhance productivity, environmental sustainability or to facilitate supply chain flows.
A critical assumption underpinning the consultative paper is that UK policy ‘will provide an unprecedented level of regional discretion and flexibility (which) represents a unique opportunity to develop a new dynamic... to chart a new way forward with common purpose’.
The assumption that a replacement of the SFP system will be introduced then poses questions about the size of a regional farming budget for NI and, at the next stage, the allocation principles to sub-divide this funding in ways which develop a sustainable land management strategy across NI.
Can NI expect to receive, after 2020, the same level of farm support as is presently available? Currently, according to the consultation paper, the CAP (Pillar 1) provides about €327m each year.
The commitment in the consultative paper is to maintain the current budget in cash terms. That is already an acknowledgement of a reducing real budget. Seen from a Treasury perspective, there is a risk that this level of funding will be challenged as being too favourable to NI.
The consultative paper emphasises that future farm policy should be used to support increased productivity from farms, improved resilience to market changes, enhanced environmental sustainability and improved operation of the food supply chain.
As presented, the themes are commendable. Some of the implications in terms of restructuring the farm sector need to be made clearer and, where necessary, unpopular decisions tackled.
Missing in the consultative paper is any anticipation of the possible changes in the way in which farm produce markets will change as the UK separates from CAP structures. Will competitive imports displace some of the market share of NI in the UK beef, pork or diary sectors? The farming policy framework has not examined these critical uncertainties.
Brexit may shift rules in NI’S farming industry