Sunday, March 03, 2019

US opens offensive on agricultural trade

The United States is playing hardball on agricultural trade as part of any future US-UK trade deal after Brexit. Last week the office of the US trade representative (in effect, America's trade minister) issued a document that said the US was seeking 'comprehensive market access for US agricultural goods in the UK' through the reduction or elimination of tariffs. The US is also looking for the removal of 'unwanted barriers' related to 'sanitary and phytosanitary' standards.

The US Ambassador followed up with an article in the Daily Telegraph on Saturday which said that the UK risked getting trapped in the EU's 'museum of agriculture' approach: Smears on US farms

The EU has shown itself more than capable of innovation in agriculture with a new era opening up with the digital revolution. However, what the so-called 'museum of agriculture' about is a vision for European farming which emphasises the production of high quality products in an environmentally sensitive way, including observing animal welfare standards. An ecosystems compatible agriculture reflects the preferences of European consumers and voters who have no enthusiasm for corporate, industrialised American models.

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Friday, March 01, 2019

Brexit and Wales

A vibrant and innovative food movement is growing in Wales and there could be new opportunities post Brexit. But is England holding Wales back? Brexit and Wales

The report argues that Brexit poses particular risks for Wales’s export-dependent farmers and food producers. It also gives Wales an opportunity to make a step-change into a new approach to food and farming. Wales has a forward-looking government with sustainability high on the agenda, and a diverse geography. The size of the country gives it an advantage: small enough for individuals and projects to make a difference, big enough for economies of scale, and diverse in its landscapes and culture.

It has several innovative pieces of legislation that could support a transition to fairer and more environmentally sustainable farming and food production, if political authority and public support can be mobilised to link them together.

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Wednesday, February 27, 2019

Gove wins tariff battle

Recent events may give the impression that a no deal Brexit is off the table, but it may merely have been postponed until the end of June. It is therefore significant that Theresa May has ruled in favour of Michael Gove in a battle over tariffs on sensitive agricultural goods.

There was a clash between Gove and chancellor Philip Hammond with the latter taking what he saw as the side of consumers while Gove argued for tariff protection.

Existing high EU tariffs will be maintained on beef and lamb. General duties will retained for pork products, milk and cheese. Products such as sugar will have tariffs to maintain duty free access from developing countries.

Quite what the Irish Republic will make of the prospect of high tariffs on beef, which will have to apply to them, remains to be seen. It may increase their efforts to find a workable solution to the Irish border issue.

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Wednesday, February 20, 2019

The perils of a no deal Brexit

Addressing the NFU conference yesterday, Michael Gove made it clear that a no deal Brexit would be highly damaging for UK agriculture. Tariffs of at least 40 per cent could be imposed on sheep meat and beef, rising to 100 per cent in some cases. SPS checks would be imposed on exports, slowing down their processing which would mean they would be less fresh on arrival: Full text of Gove speech

One piece of good news for farmers is that there will not be zero tariffs on food imports which might have been politically attractive as a way of reducing the price of food. However, as always, the devil is in the detail. It is not clear which sectors would benefit although Mr Gove implied it would be sheep meat, beef, poultry, dairy products and pig meat. There was no mention of grains, fruit, vegetables or flowers.

The Government could also provide direct cash support for hard hit businesses, although it is not clear what the budget would be or how it would be allocated. The vulnerable livestock sector would presumably benefit.

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Tuesday, February 19, 2019

Farming on the edge

With Brexit uncertainty continuing, this analysis by well-known authors looks at the risks associated with Brexit for farming and the agri-food supply chain. In particular, zero tariffs for food might be politically attractive in a 'no deal' scenario but would hit farmgate prices hard: Farming on the edge


Monday, January 07, 2019

Public goods scheme may run into trouble

The Government's intention to switch to public goods payments for farmers after Brexit may fall foul of the poor record of implementation of existing agri-environmental schemes. About 30 per cent of the farmers signed up to the various green programmes are still waiting for payments from 2017.

Payments often come up to a year late. By the government's own assessment, delivery of the country stewardship scheme has 'fallen short' and 'the situation is unacceptable' according to the latest annual report from Natural England.

The new schemes are likely to be even more complex and will have more money going through them, making even more delays likely.

Given the likely complexities of making applications, farmers could simply opt to farm their land more intensively, reversing previous environmental gains.

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Thursday, January 03, 2019

Gove warns of Brexit farming woes

The text of Michael Gove's speech to the Oxford Farming Conference: Defra Secretary

He comments, 'I cannot, here, entirely pre-empt the outcome of the Government’s Spending Review.' Indeed, but it is of crucial importance and the Treasury has a long held suspicion of farming subsidies. Gove claims, 'Embracing change, supporting reform is the key to unlocking the Treasury’s special box.'

The Secretary of State admitted, 'It’s a grim but inescapable fact that in the event of a no-deal Brexit, the effective tariffs on beef and sheep meat would be above 40% - in some cases well above that. While exchange rates might take some of the strain, the costs imposed by new tariffs would undoubtedly exceed any adjustment in the currency markets.'

In addition, 'The combination of significant tariffs when none exist now, friction and checks at the border when none exist now and requirements to re-route or pay more for transport when current arrangements are frictionless, will all add to costs for producers. As will new labelling requirements, potential delays in the recognition of organic products, potentially reduced labour flows and the need to provide export health certificates for the EU market which are not needed now.'

'Nobody can be blithe or blasé about the real impact on food producers of leaving without a deal.'

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The CAP and farming resilience

What contribution does the CAP make to farming resilience? An in depth report on the subject: Resilience Assessment

The resilience of farms and farm systems has become more of a concern in agricultural policy-making. In recent years, European farming systems have generally experienced more pronounced and overlapping challenges: on the one hand, a build-up of shocks such as more frequent extreme weather events, increased price volatility on liberalised markets or unpredictable political interventions to trade policies.

These are accompanied by significant long-term stresses, such as changing consumer preferences, climate change, rural outmigration or the lack of skilled labour. The accumulation of these overlapping environmental, economic, social and institutional challenges could render many farming systems in Europe vulnerable and threaten their functions, i.e. the production of food and fibre as well as the provision of public goods.

The analysis reveals that the CAP and its national implementations do enhance the resilience of most farming systems in the case studies. However, there is a clear bias towards a robustness-cum-adaptability orientation. The main reason for this is that the bulk of resources go into payments that provide buffer resources for farms and enable the continuation of otherwise less profitable business models, thereby stabilising the status quo.

Fewer resources are funnelled into measures that enhance adaptability; this occurs mostly through rural development programs and in some cases producer organisations. An open question is whether the relatively ample support for robustness creates disincentives for adaptation or transformation and therefore impedes these other resilience dimensions.