Minister admits there’s no ‘Plan B’ to support farmers if UK quits EU

LIZ Truss has confirmed that the Government has no “Plan B” to support British agriculture in the event that the UK leaves the EU following a promised referendum.

Speaking at the Oxford Farming Conference, the Department for Environment, Food and Rural Affairs Secretary said it was “not the case” that officials within her department were working up a contingency plan that would form the basis of UK agricultural policy should the referendum result in a Brexit.

Ms Truss’s comments came less than a week after Meurig Raymond, president of the NFU for England and Wales, said the referendum – due to take place before the end of 2017 – could completely change the way agriculture works. That scenario was confirmed by a study by independent London-based analysts Agra Europe, titled Preparing for Brexit, which predicts only the most efficient 10 per cent of British farmers would be able to survive without the multi-billion-pound subsidies handed out by Brussels.

The report points out that for the majority of British farm businesses, EU subsidies represent the difference between profit and loss.

They would lose most of this at a stroke unless the British Government guaranteed compensating support of one kind or another.

Land prices would crash in the wake of a wave of debt foreclosures by banks and only the super-efficient would survive.

Based on analysis of UK policy papers to date, the report says that a replacement regime likely to be put in place for farmers by a UK government, post-Brexit, would mean their total support would drop by between £3.5 billion and £4 billion a year at present to more like £1 billion a year.

This reality was admitted by the NFU’s director of policy and communications Martin Haworth, who said: “The absolute nightmare scenario would be that we’d be outside the European Union – we’d lose our access to the single market, we’d have lower tariff barriers, so food prices would drop and farmers’ prices would come down, and our farmers wouldn’t be subsidised, whereas our competitors would be – both in Europe and large parts of the world.”

Also speaking at the Oxford conference last week, former Defra Secretary Owen Paterson took a different view when he told delegates in a head-to-head debate with Agriculture Commissioner Phil Hogan that British farmers would be better off if the UK left the EU, and that the UK leaving the EU would not restrain the UK’s ability to trade in the global market.

Mr Paterson said: “Outside the EU it will be essential to continue a significant level of support from the UK Exchequer and to reassure farmers that payments would be made by the UK Government in the same way that Switzerland, Norway and Iceland currently do.

“In fact, the payments made by these countries are actually more generous than those paid by the EU to member states. The EU currently contributes £2.9 billion to the UK via the CAP (Common Agricultural Policy) and related subsidies, accounting for 55 per cent of total income from farming.

“Yet the UK’s estimated net contribution to the EU budget is more than three times that figure at £9.8 billion.

“By leaving the political structures of the EU, a UK policy could not only pay as much, if not more, than the CAP, but funds would be allocated in a much more effective and targeted manner by policy makers with a full understanding of the UK industry and environment.”

According to Mr Paterson, UK agriculture is “heavily constrained by the EU” and is “held back” by EU prejudice against advanced technology and science. He referred to Europe as becoming “the museum of world farming” and encouraged the UK Government to adopt the innovation principle, which he claims the EU has shied away from to date.

In response to Mr Paterson’s argument, big-hitter Mr Hogan recognised that more could be done when it comes to technology and science. “There is recognition in the EU that we need to do more to enshrine the innovation policy and put science back at the centre of decision making,” he said.

Referring to recent reform of the CAP, the Commissioner told delegates: “We now have a marketorientated policy which means that farm businesses decide themselves what they want to produce on the basis of what they are good at and where they can get a good price, rather than looking to Brussels to see what support is available or being hemmed in by quotas.

“The CAP has become more liberal, more flexible, and more outward looking – more focused on trade on the global marketplace.”

Mr Hogan questioned Mr Paterson’s view regarding trade deals and asked: “How would Britain, with a population of 60 million, fare in negotiating with countries like China with a population of 1.3 billion? In the EU it punches at a weight of 500 million, almost twice the size of the US.”

This important debate is only just beginning.