Thursday, April 28, 2016

More on Brexit and agriculture

My latest contribution to the Brexit and agriculture debate, this time for the Global Plant Council: Global Plant Council

Tuesday, April 26, 2016

We need to stay in the CAP but we must continue to work for reform

I was one of the speakers at an event on the impact of Brexit on food at the House of Commons last night. It was organized by the Food Foundation, Food Research Collaboration and the Food Ethics Council. The other speakers were Tim Lang of City University and Fiona Smith from Warwick who covered the complex international trade dimension which she described as a 'quagmire'.

Tim Lang claimed that the issue of how food and drink would be affected has been 'largely ignored' in the debate so far. His report suggests there will be 'volatility, disruption and uncertainty' in a post-Brexit trade world. 'The UK should wake up to the significance of our and the EU’s food role in this changed world,” said Lang. 'The public isn’t yet interested, seeing it as a matter of farming. This is dangerously wrong.'

I argued that Pillar 1 subsidies would be vulnerable after Brexit, Pillar 2 subsidies less so. Kerry McCarthy, the shadow cabinet member for Defra, asked why this was the case. I responded that Pillar 2 subsidies would be defended by a coalition of environmental and conservationist lobbies along with farmers, whilst Pillar 1 subsidies would be defended by farmers alone. Pillar 2 subsidies would also receive more support from academics as they were seen as providing public goods.

There was agreement among the panel that the emphasis needed to be on sustainability and that the CAP needed to address public health issues. There was increased public concern about these issues, but it would take at least ten years to make progress. If the UK remained in the EU, the Government needed to take a more systematic and engaged approach to CAP reform.

Kerry McCarthy made a good point when she referred to the Janus-faced nature of the CAP, on the one hand encouraging niche, high valued added, quality production and on the other hand intensive forms of commodity farming.

As President Obama pointed out, we live in an interconnected world and that is why we need a policy like the CAP, for all its imperfections.

Tuesday, April 12, 2016

Saturday, April 09, 2016

Brexit fears hit farmland prices

English farms have seen the steepest fall in their value since the financial crisis, as investors worry about what might happen to farm subsidies after Brexit. Values fell 3 per cent in the quarter to March according to an index constructed by estate agent Frank Knight. This is the largest quarterly fall since the end of 2008. Average values have risen nearly 180 per cent in the last decade.

Knight Frank think that farmland values will fall 8 per cent this year on the assumption that commodity prices remain low and there is not a collapse of sterling.

Farmers Weekly has noticed a 24 per cent drop in the acreage of land advertised in its pages in the three months since January compared with the same period last year. The average price of an acre of English farmland has dropped below £8,000.

Wednesday, April 06, 2016

NFU release Brexit report

The National Farmers Union have released the report they commissioned from Wageningen University on the possible implications of Brexit for EU agriculture: The report explores three alternative scenarios of what might happen after Brexit.

The NFU Council will decide in mid-April whether to take a position on the referendum. Most farmers probably favour remaining in membership, but a sizeable minority want to leave.

Feedback meetings on the report being held by the NFU around the country are attracting big audiences. This is in line with my experience of addressing meetings in Yorkshire on our Yorkshire Agricultural Society report on Brexit. These attracted audiences of 200 and 160. I will be addressing a meeting in Cumbria on May 5th.

The results of each scenario show that the biggest driver of UK farm income change is the level of public support payments available. The positive price impacts on farm incomes seen through both the FTA and WTO default scenarios would be offset by reductions in direct support. A reduction of direct support, or a complete elimination of it, would exacerbate the negative impact effects seen under the UK Trade Liberalisation scenario.

The cattle and sheep sectors are particularly dependent on direct support payments, but so too are mixed farms and field crops. Consequently, the combination of a more liberal trade policy and a reduction or elimination of direct support would make many British farms less viable.

The report can be linked to from here: Report