The grass isn’t greener down under
LIKE many people in Britain, Agromenes has a good number of relatives in the old Commonwealth. We catch up when they come through the UK and we talk a lot about farming. I’m always keen to understand how they deal with the wider world without the advantages of membership of a trading group like the EU.
My Canadian contacts have long recognised the problem and are, therefore, gung-ho about their new free-trade deal with the EU. They regret that Britain will be excluded because our Government has foregone the single market. That annoys them because our membership of it mattered and they feel we’ve let them down. No doubt Britain will have to negotiate its own deal, but that won’t be for some years.
More predictable, perhaps, is our relationship with Australasia—my most recent conversations have been with New Zealand farmers, who aren’t having an easy time. Wool prices are low and, although dairying has made something of a comeback, there’s now a serious risk of over-production. The one bright spot is wine, which is a major source of revenue, but traditional farmers there are finding life increasingly hard. Although the agricultural economy bounced back after the abolition of subsidies, their position continues to be precarious. Capital is increasingly hard to find and yet, without significant investment in robotics and other technical developments, they cannot compete. Just like the UK, their dependence on irrigation continues to grow and, as old permissions run out, the cost and availability of new licences are of serious concern.
Ultimately, this is an agricultural system that’s objectively uncompetitive; it relies on a tax regime that levies neither inheritance nor capital gains taxes. This means that farmers who have just got by on their annual revenues can retire and pass on to the next generation not only their land, but any diversification or other business ventures without tax.
British farmers have to ensure that, if our urban-centric political parties conspire to remove agricultural subsidies when we leave the EU, they don’t quote what’s gone on with support in New Zealand—as some commentators are doing—without making the fiscal changes that have enabled farmers there to keep their heads above water.
Even with so benevolent a tax regime, however, New Zealand farmers moan about bureaucracy. You might have thought that with wide-open spaces, no production subsidies and no EU, farmers would be spared annoying paperwork. Not a bit of it. New Zealanders are leaving farming because they aren’t prepared to spend so much time filling in forms and meeting environmental health, bio-security and other regulatory requirements. They are basically outdoor types, for whom office routines are anathema. It’s hard for them to accept demands for this detailed supply-chain information.
Advanced farming everywhere has to compete in a marketplace that demands a proper regulatory framework addressing the demands of biodiversity, water conservation, animal welfare and climate change. Farmers blame governments for the growth in bureaucracy, but the truth is that it’s the customers who make the demands. People really do want to be sure their food is properly produced and entirely safe. Perhaps we in Britain should learn from the experience of our Commonwealth friends before we blame the EU for what have become the essential requirements of the marketplace.
‘Ultimately, this is an agricultural system that’s objectively uncompetitive