Panel to look at farm funding across UK after Brexit

The question of how farm funding should be divided up across the UK after Brexit has been a thorny political issue, not least because the Scottish Government in particular has been concerned about a loss of powers. It also has an ambition to continue some form of basic payment after Brexit, although that would depend on funding being available (the Welsh Government does not intend to maintain a form of basic payment).

The Government has appointed an independent panel chaired by Lord Bew to review the issue: Fair funding for farmers. Each of the devolved administrations will be represented on the panel.

It is also stated that the intention is not to maintain the Barnett formula in relation to agricultural spending after the end of the lifetime of the current Parliament.

Under the present distribution of funding, Northern Ireland does best on both a per capita and a per hectare basis: Funding for farming across the home nations

Agriculture Bill lacks clarity

The House of Commons Environment, Food and Rural Affairs Committee’s Scrutiny of the Agriculture Bill report is calling on the Government to ensure imported food products are held to current British standards as part of any future trade deal. The inquiry was launched alongside the Agriculture Bill, which was introduced in the House of Commons in September 2018 and examines the provisions that will be needed in the agricultural industry following the United Kingdom’s exit from the European Union.

Due to the inquiry running parallel to the Bill, the Committee focused on three key areas of the Bill, including future trade deals. The Committee is calling on the Government to ‘put its money where its mouth is’ and accept its amendment to the Agriculture Bill regarding trade. The amendment stipulates that food products imported as part of any future trade deal should meet or exceed British standards relating to production, animal welfare and the environment.

The other two key areas prioritised by this Report are the transition from the EU Common Agricultural Policy (CAP) to a new system based on public money for public goods and fairness in the supply chain The Committee recommended that there should be a multi-annual financial framework to provide a long-term commitment to agriculture. The Committee also concluded that the Groceries Code Adjudicator should oversee the proposed fair dealing obligations for first purchasers of agricultural products, rather than the Rural Payments Agency.

Given the importance of this Bill in shaping UK agriculture in the future, the Committee expressed disappointment that it was not given the chance to scrutinise the Bill pre-legislatively. This unsatisfactory precedent has been swiftly followed by the publication of the Fisheries Bill.

Neil Parish MP, the Chair of the Environment, Food and Rural Affairs Committee, said: 'The United Kingdom currently has exceptionally high environmental and food standards and an internationally recognised approach to animal welfare. This legacy cannot be ripped apart by the introduction of cheap, low-quality goods following our exit from the European Union. Imports produced to lower standards than ours pose a very real threat to UK agriculture. Without sufficient safeguards we could see British farmers significantly undermined while turning a blind eye to environmental degradation and poor animal welfare standards abroad.

This Bill lacks clarity and gives any future Secretary of State the opportunity to avoid scrutiny and make crucial decisions while going somewhat unchallenged. We would like to see sufficient opportunities for parliamentary scrutiny before any new systems or policies are rolled out.

The report can be found here: Defra committee report

The scale of Italian food fraud

The very complexity of the Common Agricultural Policy provides opportunities for fraudsters. One recalls that a British farmer claimed for fields which turned out to be in mid-Atlantic. A herd of cows was supposedly living on the upper floors of an office block in Rome. Italy has been particularly prone to systemic fraud involving organised criminals.

According to the Rome-based think tank, the Observatory of Crime in Agriculture and the Food Chain, the Mafia have infiltrated the entire food chain. The value of the so-called agromafia business has almost doubled from €12.5bn in 2011 to more than €22bn in 2018 (growing at an average of 10 per cent a year) according to the Observatory. It now accounts for 15 per cent of total estimated Mafia turnover.

According to a recent article in the FT Weekend Magazine 'the cartels have developed white collar expertise in infiltrating the local councils and committees that award tenders and subsidies.' A Mafia family could claim about €1m a year in EU subsidies on 1,000 hectares, while leasing it for as little as €37,000.

In part the Mafia's interest in land deals stemmed from lower earnings from its drugs business and a drop in public money for public works contracts. With margins as high as 700 per cent, profits from olive oil can be higher than those from cocaine and with less risk. According to police, about 50 per cent of all extra-virgin olive oil sold in Italy is adulterated with cheap, poor quality olive oil.

Counterfeited organic food also offers the opportunity for big profits. Italian gangs were discovered importing wheat from Romania and labelling it as organic, which commands a price three to four times higher.

Apart from the opportunities to make money, the move into food also reflected the organisations's growing propensity to enter legitimate businesses. Of course, laundering profits in this way is not a new tactic.

However, there has been a crackdown. Even the smallest leaseholders have to pass police checks, enforced retrospectively, and there have been numerous confiscations of land. Specialist police tasters work to uncover adulterated foods, especially in olive oil.

CAP reform plans fall short

This is not the first time the Court of Auditors has criticised the CAP and it probably won't be the last, given that its findings are generally politely brushed aside: Plans fall short

It is argued that 'The proposed reform of the Common Agricultural Policy after 2020 falls short of the EU’s ambitions for a greener and more robust performance-based approach. The auditors identify a number of other issues with the proposal, notably in terms of accountability.'

The auditors note that many of the proposed policy options are very similar to the current CAP. In particular, the largest part of the budget would continue to be direct payments to farmers, based on a given amount of hectares of land owned or used. However, this instrument is not appropriate for addressing many environmental concerns, nor is it the most efficient way of supporting viable income.