Wednesday, May 25, 2016

No bonfire of controls

Here are some extracts from a presentation I made at a conference at the British Academy on 'The EU and the UK: the Wrong Kind of Regulation?

Farmers find the most negative aspect of the European Union to be what they perceive as the excessive burden of regulation. There is particular complaint about the ‘gold plating’ of EU regulations in the UK, adding to what is required by the EU, although when farmers and their representatives are asked to come up with examples they can usually produce very few and some of those are trivial.

There is no doubt that regulations impose transaction costs on farmers, taking them away from the activity of farming. My brother-in-law is a sheep farmer and I have seen the paperwork associated with the movement of his animals. However, regulations are there for a reason and those farmers who anticipate a bonfire of controls if there was a Brexit would probably be disappointed. There are four main drivers of the regulation of agriculture and food:

  • The protection of human health
  • The protection of animal health and welfare
  • The protection of the environment
  • The protection of the consumer

It is worth noting that the UK has been in the forefront of pushing the EU’s smart regulation agenda which emphasises:

The need to take impact assessments for significant proposals
  • The desirability of seeking alternatives to legislation
  • The need to evaluate current legislation, so-called fitness checks
  • The importance of consulting on proposed regulations
  • Another defining characteristic of UK policy has been that risk management should be based on robust science and evidence. This has led it at times to question risk management decision as being unduly risk averse leading to disproportionate legislation, for example in relation to plant protection about which I will say more later.

    Farmers receive substantial subsidies from the EU. The payment of these subsidies by the Rural Payments Agency is often badly delayed with consequences for farmers’ cash flow. This is partly the responsibility of the agency, but it also reflects the complexity of the regulations and the difficulty of applying them. Simplification of CAP rules has been objective of the EU for some time, but progress has been slow. In part, this reflects the fact that the regulations are the result of an often messy compromise between different interests.

    The EU has effectively prevented the commercial use of genetically modified crops. However, whether this represents the right or wrong kind of regulation depends on where you stand on this controversial issue. Regulatory issues are not just questions of burden reduction but also of political judgment.

    As far as food regulation is concerned, the emphasis has been on free movement and food safety. It has been argued that the regulations are safe and comfortable and not that useful. In particular, there has been a relative neglect of nutritional issues which are important in relation to obesity. However, that in turn reflects defects in the scope of the Common Agricultural Policy. Good policy instruments in the form of regulations rely on well thought out and comprehensive policy objectives.

    David Baldock of the IEEP, also on the panel, and I agreed that the main areas in which regulations might be relaxed after Brexit were GM crops, the Nitrates Directive and some aspects of the Water Framework Directive.

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