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.

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.

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.'

New SAWS scheme to be trialed

A new scheme to enable migrants to work in UK agriculture in the picking season after Brexit has long been awaited, but is now about to be announced.

It appears that Downing Street was blocking the scheme. Why this should be the case is not clear, but Theresa May has taken a hard line on migration issues, evidenced by her insistence that students should count as immigrants.

In any event, Home Secretary Savid Javid and Defra Secretary of State Michael Gove have been able to push the scheme through.

It will be a trial scheme for two years and will cover 2,500 workers which is a small number given that 75,000 seasonal workers are estimated to have been employed in 2016. The current shortfall is about 7,000.

The scheme would be for those from outside the EU and the regulations that would apply to temporary EU migrants remain to be resolved. Countries that might supply workers under the trial scheme could include Ukraine and Morocco. However, Germany has offered 60,000 visas to workers from the Ukraine.

Under the old SAWS scheme, which ran from 1945 to 2013, farmers could employ overseas workers for up to six months to pick fruit and vegetables. Workers were recruited and vetted by four authorised agencies (the pilot scheme will be run by two yet to be selected).

Farmers and growers have been dealing with significant shortages of labour, reflected in the Radio 4 fictional serial, The Archers. The weakening of the pound and the buoyancy of economies elsewhere in Europe has slowed the number of workers arriving.

One of England's biggest fruit growers, Hall Hunter Partnership, have tried an innovative approach on their seven sites. They have tried to improve workers' productivity to enable pay to rise. As a result, more than 70 per cent of the pickers they hire are returning to the UK each year, well above the sector average of 40 per cent.

The proposal has been broadly welcomed by the NFU who see it as a success for their lobbying.

Read more about the proposal in this report from Farmers Weekly: Visa scheme

Imperfect strawberries

British supermarkets have been increasing their willingness to sell fruit and vegetables that do not meet high cosmetic standards in terms of shape and presentation: Wonky veg

However, it has been the more upmarket supermarkets such as Waitrose and Sainsbury's who have been at the forefront of these developments. Hence, I was interested to find in Tesco today 'Perfectly imperfect strawberries' grown in Hereford, stated to be 'less than perfect, just as tasty.' The shapes weren't that odd and they were certainly just as tasty.

This has to be a win-win: food waste is reduced, consumers get a 'five a day' product at a very competitive price and growers are able to get a return on produce that would otherwise go unused.

All we need now is for the Government to get its act together and come up with a successor to the Seasonal Agricultural Workers Scheme so that the fruit can be picked. Judging by the speed with which Michael Gove has fulfilled his pledge to do 'whatever it takes' to deal with the consequences of the summer drought, I wouldn't be too hopeful.

On the drought issue, read the NFU's views here: Failure to act

Farm policy after Brexit

My latest reflections after Michael Gove's Oxford speech: The future of farm policy after Brexit

Subsidies to stay for five years after Brexit

Farm subsidies will stay at their current levels (presumably without an inflation adjustment) for five years after Brexit, Michael Gove will announce today: Farm subsidies

After 2024 they will be replaced by a new system designed to secure environmental outcomes and support rural infrastructure. There is also reference to giving greater access to the countryside which may worry livestock farmers who already have problems with out of control dogs.

The extension of subsidies represents a considerable victory for the NFU and gives farmers more time to plan for the future. The downside is that it may lead them to delaying necessary adjustments to their businesses to prepare for a life without existing blanket support payments. It will create something of a 'cliff edge' in 2024. I have always been an advocate of tapering payments to facilitate adjustment.

The largest landowners may have their payments capped before 2024. The government has yet to make a decision on the cap, but it could be implemented using a sliding scale with the 3,500 farmers who receive more than £100,000 each annually getting a lower amount per hectare above a certain number of hectares.

Mr Gove is expected to tell the Oxford Farming Conference today: 'Paying landowners for the amount of agricultural land they have is unjust, unfair and drives perverse outcomes. It gives the most from the public purse to those who have the most private wealth.'

Mr Gove hopes that the UK will leave the CAP when Brexit happens in March 2019. Whether the UK remains a member of the CAP during the transition period is still a matter for negotiation. but most officials in London and Brussels believe that Britain will still be a member for a period of time after Brexit.

Does Gove speaked with forked tongue?

Defra secretary Michael Gove has become something of an unlikely hero with green activists. Some of this reputation has been achieved by grabbing low hanging fruit such as stopping the sale of ivory antiques or banning the use of plastic microbeads in personal care products.

However, this week he delighted greens by condemning farmers who 'drench' their fields with chemicals and damage soil fertility. In my experience most farmers don't over apply chemicals as it would be a waste of money. Never mind, the Soil Association said they had been 'bowled over' by his comments.

So are farmers unhappy with him? No, because he has giving them assurances behind the scenes. Moreover, he has matched his words with actions. He ensured that the UK voted in favour of retaining glyphosate in the EU and has ordered the biggest cull of badgers ever.

Mr Gove is an ambitious man and he is trying to win support in as many areas of political life as he can.

New aide has remain background

Former deputy chief whip and remain supporter Sir John Randall has been appointed as special adviser on the environment to Theresa May. Sir John was formerly the MP for Uxbridge and South Ruislip. In 2015 he stood down in favour of Boris Johnson.

It is expected that he will play a key role in shaping future government policy for agriculture. He is seen as an antidote to the pro-Brexit instincts of Defra secretary of state Michael Gove.

Farmers have been complaining that Gove's energetic interventions are just intended to raise his political profile, but if farming does better as a result, everyone is a winner. However, some farmers consider that he is paying too much attention to conservation and wildlife interests.

Gove to outline farm subsidy plans

Michael Gove will outline his plans for the future of farm subsidies today: Green Brexit

Farmers will have to earn support in the future by providing environmental benefits, although it looks as if there will be some scope for assistance with investment and food promotion. Upland farmers will also continue to receive support.