Defra faces enormous challenge on Brexit

The Department for Environment, Food and Rural Affairs (Defra) has made good progress in its preparations for exiting the EU, but it faces an enormous challenge. It is now not able to deliver everything it originally intended for a ‘no-deal’ exit, though Defra told us it still aims to have sufficient arrangements in place if needed, says the National Audit Office (NAO).

Defra is one of the government departments most affected by EU Exit. It is responsible for 55 of the 319 EU related work streams across government, covering chemical and agri-food industries, agriculture, fisheries and the environment.

The NAO report acknowledges that Defra has achieved a great deal in difficult circumstances and to a very demanding timescale. For example, Defra has: developed detailed plans for its preparations, secured HM Treasury approval for £320 million spending in 2018-19; started to build new IT systems; recruited over 1,300 new staff by March 2018 [unfortunately inexperienced ones replacing experienced ones who left - WG]; strengthened its project management capability; and published consultation documents on agriculture and fisheries.

Despite these and other developments, the constantly changing environment has made it challenging for the department to make and stick to a robust plan and meet its project deadlines. The risk of Defra not delivering everything it had originally intended for a no deal scenario is high and, until recently, not well understood by the department. In the work streams the NAO examined it found the following examples where Defra would not be ready:

• Exports of animals and animal products from the UK are valued at £7.6 billion. For the UK to continue exporting, it must comply with international health requirements and all exports must be accompanied by an export health certificate. Defra needs to negotiate with 154 countries to introduce 1,400 different UK versions of current EU export health certificates. Defra is focusing on reaching agreement with 15 of these countries which it estimates account for 90% of total exports, but will not reach the other 139 by March 2019. It has accepted the risk that UK firms exporting to countries where agreements are not reached may not be able to do so for a period after EU Exit.
• Export health certificates will also be required for the first time for exports to the EU if there is no deal which will result in a significant increase in certificates needing to be processed by vets. Without enough vets, consignments of food could be delayed at the border or prevented from leaving the UK. Defra intended to start engaging with the veterinary industry in April 2018, but has not been permitted to do so and now plans to launch an emergency recruitment campaign in October to at least meet minimum levels of vets required. It plans to meet any remaining gaps through the use of nonveterinarians to check records and processes that do not require veterinary judgement.
• The fishing industry contributes £682 million to UK gross domestic product. Defra is still developing its plans to strengthen its control and enforcement activities in English fishing waters. Defra hopes to significantly increase vessel patrol hours, but due to delays in procurement and planning is unlikely to reach its originally intended patrolling capacity by March 2019. In a no-deal scenario, Defra may have to scale up its capacity over time, but is confident that it will be able to manage the risk of any disruption in the interim.

There are further challenges that sit outside of Defra’s control. The UK hopes to seek continued participation in the European Chemicals Agency, but this is dependent on a negotiated settlement. Without this, UK chemical manufacturers would no longer be able to export products to EU member states as registrations of products would cease to be recognised by the EU. To recover market access, they would need to reregister their products on the EU's system via an affiliate or representative located in an EU member state. This is a lengthy process that cannot be started until the UK has left the EU.

Due to the shortage of parliamentary time available, there is a high risk that Defra will not be able to deliver all of its legislation by March 2019. It has three new bills and 93 Statutory Instruments to convert EU law into UK law and is now having to prioritise.

Defra has not been able to fully support businesses in their preparations. As a result of government restrictions, communicated through DExEU, it has not been able to hold open consultations with stakeholders on their preparations for a no-deal scenario. It has also, until very recently, been prevented from issuing specific information for the chemical industry or food importers and exporters.

Amyas Morse, the head of the NAO, said: 'The scale and complexity of what needs to be done to leave the EU is a significant challenge and Defra is impacted more than most. It has achieved a great deal, but gaps remain and with six months to go it won’t deliver all it originally intended in the event of no deal, and when gaps exist, it needs to focus on alternatives and mitigations.'

'Like other departments, it now must ensure its voice is heard by the centre of government to provide an accurate picture of what is possible if a negotiated settlement is not reached, and even if it is.'

The full report can be found here: EU exit

Agriculture Bill to be published today

The Agriculture Bill which sets out the framework for domestic agricultural policy after Brexit is to be published today: Delivering a green Brexit

Direct payments will be paid much as at present in 2019 and 2020. They will then be phased out between 2021 and 2027 which gives farmers plenty of time to adjust, although the fact remains that many of them are reliant on these payments to make a profit.

Those with the highest payments will see the biggest reductions initially. This will have popular support, but it may also affect the ability of more efficient farms to invest and improve productivity.

However, there will be measures to improve productivity and invest in R and D. As with much else, the devil will be in the detail.

The Defra statement makes no mention of devolution and it as well remember that this is essentially a measure for England. The distribution of responsibilities and cash between Westminster and the devolved administrations has yet to be agreed and remains controversial.

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

Could government change its stance on subsidies?

The National Trust is worried that the Government may cave into pressure and preserve many subsidies to farmers. They and other green groups fear that the farm lobby has succeeded in ensuring that food production and agricultural productivity will also be listed as 'public goods'.

This would go beyond the definition of what is a public good in economics, but the definition tends to be elastic in public debate and tends to encompass what would properly be termed merit goods.

Of course, the political calculus behind using farm payments to incentivise environmental benefits was to appeal to the urban electorate (many of them members of the National Trust) and that calculation remains a powerful one.

I do not think that there is a general case for subsidies for food production (many food security arguments are spurious) but there is a case for doing more to boost agricultural productivity which is poor, particularly through encouraging the use of new technology.

There is a £60m Countryside Productivity Small Grant Scheme to assist the purchase of new farm equipment: Farming productivity fund. However, the maximum grant is £12,000 which doesn't go a long way to buying sophisticated kit. Also, farmers applying for the scheme consider that they get caught between demonstrating that the farm business is viable, but not too viable otherwise it would not need assistance.

Farm payments if there is no Brexit deal

The Government has published its guidance, but it doesn't add very much to what we know already. It is full of well-intentioned hand wringing on subjects like Ireland: Farm payments

Is anyone going to be convinced by the claim that 'negotiations are progressing well'.

The NFU is concerned that organic food products might not be allowed into the EU for nine months after a no deal Brexit: Food export concerns

Where are we with agriculture and Brexit?

I gave a presentation on Brexit and agriculture to a group of insurance providers and brokers involved with farming at Bishop Burton College this week.

I started by emphasising that it is important to bear in mind that farm businesses vary considerably and this affects their ability to respond to Brexit. Some of the key variations are:

• Climate/terrain
• Soil type
• Ownership structure: owned, tenanted, mixed (increasingly common)
• Size of farm
• Diversification: how much of the farm business is dependent on farming? Most common: agricultural contracting; tourism; on farm niche value added production, e.g., cheese, yoghurt, ice cream; farm shop and/or café. Most of the low hanging fruit has been taken. One needs the right management skills and management resources can be taken away from the farm business.

What does this imply for farms? It is important for farms to spend some time and effort (and probably money) analysing their businesses and how they will be affected by Brexit Is this a commodity business pursuing economies of scale or a niche business? Should we expand or downsize? Succession issues require attention.

The CAP has been a dysfunctional policy. It was not designed with UK agriculture in mind or contemporary problems. Basic payments have been only tenuously linked to outcomes Policy instruments have been poorly designed and often impact farm businesses without securing desired outcomes. It has encouraged the intensification of agriculture.

There is an opportunity to design a better domestic policy, but whether this will be seized is open to doubt. Current proposals are too concerned with pleasing an urban electorate.

I outlined three broad brush scenarios for Brexit:

• Leaving with no deal on WTO terms
• Some kind of less than satisfactory deal
• A comprehensive agreement. The last is very unlikely given the time that is left and the difficulties that have been encountered in the negotiations so far.

Could the negotiating period be extended? Extending the negotiating period would require the consent of all 27 member states. The EU does have a history of ‘stopping the clock. But I have looked at the ways in which constitutional lawyers say this might be done and none are very convincing.

The UK has a governing party that has been negotiating with itself, but also a split opposition party with unclear policies. There is no sure majority in the Commons for any path to Brexit. A second referendum would shift the decision from a deadlocked Parliament to a deadlocked people, and what would the question be?

It is in the interests of both the UK and the EU to come to some sort of agreement. There have been some signs of a softening of the Commission position. At some point the member states are going to have to get more involved, in particular France and Germany, but they have different positions: France hopes to poach UK jobs and business and German domestic politics are fragile.

Northern Ireland is the most difficult issue. Original EU proposal in March would have given EU courts and regulators near unimpeded jurisdiction over the province. The EU is now considering limiting powers of EU authorities to make checks on UK territory and giving the ECJ only indirect authority. However, the Democratic Unionists are capable of vetoing any solution that outsiders might consider reasonable.

A no deal exit has been talked up. Some of this is people playing political games to suit their own ends. There is also an element of brinkmanship as the case in many negotiations A no deal exit is certainly possible, and it is a scenario I will consider in relation to agriculture, but I don’t think it is the most likely outcome.

An eleventh hour fudged compromise is more likely. EU decision-making characterised by last minute deals. This would leave many issues unresolved that would have to be addressed during the transition or implementation period. But during that period economic relationships would continue much as before.

The fudged compromise still leaves some problems. The Basic Payment is the difference between profit and loss for many farms. It will be phased out (in England & Wales) Public good payments will be more unpredictable, they may involve higher transaction costs and they are more likely to yield income for upland farms.

It's decision time for farms. Do they continue in business? One consequence could be a consolidation into larger units. Land prices could be driven down and they have constituted a barrier to new entrants. However, land prices are also boosted by tax benefits and interest in the sporting value of estates.

The growth rate of productivity in farming is poor (0.9 per cent a year, USA 3.2 per cent, Netherlands 3.5 per cent). Brexit might shake out less efficient farmers who are ‘making do’. Younger entrants might be more open to the possibilities of new technology.

Farmers have shown themselves to be resilient and many are innovative. They may have to rethink idea that expansion was always the answer. They need to analyse their individual farm business.

Are the NFU crying wolf?

Britain would run out of food on this day next year if it had to be self-sufficient after a no deal Brexit claims the National Farmers Union: Run out of food

This is a bit misleading as, although a no deal Brexit would disrupt food supplies, it would not mean a complete absence of imports. Ireland, for example, would be keen to continue to sell its produce to us.

It is true that self-sufficiency has declined, but I find the idea of a self-sufficiency target a bit Stalinist. If we were reliant on just one or two countries for our food, there would be cause for concern, but there are many countries keen to sell to us.

I think that a no deal Brexit would be damaging for all sorts of reason, but we need to be careful about the arguments we use against it.

Farm expansion may no longer work after Brexit

Leaving the EU will bring a more challenging and more commercial environment in which farmers will have to watch net margin rather than gross cash flow, according to Jeremy Moody, secretary and adviser to the Central Association of Agricultural Valuers.

The commercial realities of farming will focus rental values more on the productive capacity of land. Decisions about land occupation will include a consideration of fulfilling new requirements under a domestic farm policy including environmental public good.

In the past businesses have tended to become larger as they seek economies of scale, but this may not be the pattern in the future. Some will find under the new regime that land they have taken on to expand will no longer perform financially.

Scale will probably still be a goal for commodity producers but with a sharper business focus.

Farmers want to remain

It is a deeply embedded myth that farmers voted in favour of Brexit. In fact there is no evidence base in favour of that view other than a Farmers Weekly poll in which respondents were self-selected rather than based on a sample.

However, for what it is worth, Farmers Weekly has done a new poll on how farmers would vote in a three way referendum. 64 per cent selected remain, 28 per cent backed the Chequers deal and just six per cent wanted to leave without a trade deal.

Food security after Brexit

The Food Research Collaboration has published a report authored by Professor Tim Lang and three other leading analysts on food security after Brexit: Feeding Britain

Three main issues are considered:

• The question of whether the Government is paying enough attention to agri-food in the negotiating process, given its central role in both public well-being and the national economy.
• The threat a careless Brexit poses to the UK’s short-term food security – and any long-term attempt to develop a genuinely sustainable food strategy for the whole of the UK.
• The risk generated to the UK’s status as a potential trading partner of the EU by the Food Standards Agency’s decision to press ahead with major reform of UK food safety regulation, at a time when regulatory stability and clarity have never been more important.

The report notes, 'Like all systems operating to finely tuned specifications, the UK food system is fragile and vulnerable to disruption. Contracts for food supplies are typically set 12 months ahead. UK food comes via a complex logistics system run on a just-in-time basis, i.e. three to five days’ supply. There are only tiny food stocks, commercial or public, held in the UK’s food distribution chain.'

Agriculture in Wales after Brexit

The Commons Select Committee on Welsh Affairs has produced a report on Welsh agriculture after Brexit: Report

The report emphasises the contribution of agriculture to community life in Wales and the health of the Welsh language.

The report notes, 'UK-wide common frameworks could be established in a number of different ways, but it is still not clear where they will apply, what they will look like, how they will work, or how any disputes would be resolved. It is imperative that these frameworks are agreed mutually between the UK and devolved governments and ensure the unique issues that face each of the administrations are given due consideration. We believe that these frameworks will need to be supported by robust and transparent intergovernmental mechanisms.'

The Welsh Government's own proposals for phasing out the basic payment had not been well received by farmers. There is a case for retaining some form of basic payment in less favoured areas to support remote hill farms.

How changing food cultures challenge agriculture

One of our leading rural studies experts, Professor Michael Winter looks at the challenges and opportunities agriculture faces from changing food cultures: Food cultures

His report considers how changing food cultures and the need for a healthier human diet might impact on agriculture in the UK. He says, 'I look at what people are eating, where and how, and I consider some of the key trends in food consumption behaviour, that clearly feed back into what UK farmers produce and where and how their products are marketed.'

The chapter on agriculture looks at the ‘fitness’ of the industry to adapt to change and examines some of the market and science-derived opportunities for farmers to diversify the food commodities and products they produce including the breeding of improved varieties of cereals and reviving ancient varieties, and increasing the production of fruit and vegetables. Key to the approach required is for Sustainable Intensification, as the way ahead for agriculture in a resource-constrained world, to bring human nutrition more fully into its orbit.

He concludes (and I agree), 'There is a need to develop a food and farming strategy for the delivery of safe, nutritious and affordable food in the UK, which will allow UK farmers to respond with confidence to the concerns and opportunities presented by civil and consumer society. There is a clear policy imperative to support farmers through the transition to post-Brexit agriculture and policy needs to be designed to ensure that a strong, competitive and food health oriented industry emerges. Agricultural policy should be more focused on health and nutrition. Nutritional security should be seen as a "public good".'

EU needs to offer leadership on global trade

Alan Swinbank looks at Brexit, Trump and the unintended consequences of incomplete agricultural tariff reform: Incomplete CAP reform

He points out, 'Export subsidies are no more. Taxpayer support for Europe’s farmers is largely decoupled, and unthreatened by WTO disciplines. Despite successive reforms of the CAP, bringing down domestic support prices, these excessively high tariffs remain in place, rather like a whale’s carcass left stranded on a beach.'

'If the global trading system is to be saved, the EU needs to lead. Why not counter Trump’s threats and offer to unilaterally reduce farm tariffs?'

Will it be all right on the night?

The Future Farmers of Yorkshire event at the Great Yorkshire Show

What follows is the text of my talk to the Future Farmers on Yorkshire on Wednesday 11th July.

For a long time farmers have had to deal with uncertainty about what Brexit will mean for their businesses. The Government has set out a direction of travel for domestic agricultural policy after Brexit in their admittedly somewhat vague Green Paper and this will be made firmer in the forthcoming Agriculture Bill. There hasn’t been much time to digest the 44,000 responses that were made to the consultation, including the detailed response made by the Farmer-Scientist Network of the YAS.

What is clear is that the Government intends to direct future funding towards the provision of public goods and that direct payments will be phased out. Whatever one thinks of Michael Gove, he does have a clear strategic vision, albeit one designed to appeal to urban electorates. If he had replaced David Davies as Brexit secretary, we would have had a further period of instability at Defra.

Unfortunately, Defra lost a lot of its experienced staff and although it has recently made new hirings, they are generally relatively junior and inexperienced in agricultural matters.

What we do not know is the shape of the final settlement between the UK and the EU which could have profound implications for farms. The Chequers compromise seemed to provide a basis for moving forward, but now looks shaky as arguments continue within the Conservative Party, although I think it would command a Parliamentary majority.

Broadly speaking, one may suggest three scenarios:

• 1. A failure to reach any agreement which would lead to trade being conducted on WTO terms. This would be highly disruptive. Last week, the British Retail Consortium warned, ‘'[The] supply chain is fragile. Failure to reach a Brexit deal – the cliff edge scenario – will mean new border controls and multiple "non-tariff barriers" through regulatory checks, creating delays, waste and failed deliveries. This could lead to dramatic consequences, with food rotting at ports, reducing choice and quality for UK consumers.’
• 2. ‘It will be all right on the night’. Both the UK and the EU have an incentive to reach an agreement, although the incentive is stronger for the UK with its 64 million population than the EU with 500 million. There would be some kind of initial compromise and then the real negotiations would take place during the transition or implementation period which could be extended.
• 3. A comprehensive agreement. Whatever happens Britain is not going to have access to the single market on the same terms as at present. One cannot leave a club and continue to receive its benefits. The EU is resistant to the UK to having its cake and eating it. Apart from anything else, it does not want to encourage other member states to think that they might secure the benefits of the EU without staying as members.

It seems to me that a comprehensive agreement will not be achievable given the political constraints in the UK and the EU. Even getting some sort of interim arrangement is not going to be easy. Time is running out and the UK Government has spent a lot of time negotiating with itself. Too often the result of these negotiations is a position that is not acceptable in Brussels. For its part the EU has been distracted by a number of other problems, most notably the migration crisis.

No one has really come up with a feasible solution to the problem of Ireland which has a successful integrated agri-food economy. The technological means of tracking the movement of goods do not exist and would take a long time to put in place and made to work properly. However, some sort of temporary arrangement might be possible. The declared intention to have a common rule book with the EU for agri-foods is a step in the right direction. It may be possible to buy time on this issue through a fudge, but Ireland will not be easily satisfied.

Some of the biggest challenges for farmers arise from future trading relationships, both with the EU and the rest of the world. Under the worst case scenario, sheepmeat producers would face substantial tariffs at the EU border. These would effectively deny them competitive access to the EU market which accounts for around 40 per cent of UK production. This would be devastating for sheep farmers. However, I remain reasonably confident that we can avoid this worst case scenario and that sheepmeat exports will continue much as they do at the moment.

What is perhaps of greater concern is the trade treaties that the UK intends to subsequently negotiate with third countries such as the United States. It should be noted that the intention to align with EU rules on agriculture and food after Brexit will make securing a trade deal with the US much more difficult, given the US interest in having access for chlorine rinsed chicken and hormone treated beef which are banned under EU rules. Nevertheless, my concern would be that agriculture would not be high up the list of government priorities and would be used as a bargaining chip to obtain concessions on manufactured goods or services. For example, Australia would like greater access for sheepmeat to UK markets.

However, I do think that these treaties will take some time to secure and probably will not be possible until after the implementation period. This will at least give farmers a breathing space. The risk in the longer run is that cheap food imports will arrive in the UK market, having not been produced in accordance with the exacting animal welfare standards required in the UK. Price is a big driver for consumers.

It should also be noted that farmers in France, Germany and elsewhere in Europe will continue to receive direct payments, albeit at a somewhat reduced rate because of the loss of UK funds. British farmers will not be competing on a level playing field. The total sum made available to farmers in support payments will surely be reduced. Public goods payments may be more complicated to access and will certainly be distributed in a different way.

Hopefully, post Brexit, there will be more opportunities for a decentralised agricultural policy for England, not just for the devolved administrations. Yorkshire needs more opportunities to develop its distinctive agri-food offer of which we can see many splendid examples round the showground today.

How can farm businesses succeed post Brexit? Each farm business is different and faces its own challenges and potential. What is certainly worth doing at the very least is a SWOT analysis in terms of strengths, weaknesses, opportunities and threats. Some types of activity may no longer be viable and new opportunities may open up. For some farms, the efficient production of commodities securing economies of scale may be the best way forward. For others, there may be opportunities for niche forms of production which add value and involve direct relationships with consumers.

These different approaches require different management skills. Above all, there has to be an openness to new ways of doing business which is an area in which Future Farmers have much to contribute.

Robots ahoy!

Harrogate: We don't value the soil to the extent that we should argued Clive Blacker of Precision Decisons Ltd. at a seminar om Precision Farming and the Hands Free Hectare at the Great Yorkshire Show, The trend towards even bigger machines was driven by a number of factors and they caused soil compaction.

He envisaged a future with swarms of small robots and their tractor outside looked dinky and not a threat to anyone. Fortunatey, the tractor is now driving in straighter lines than last year.

How soon commercialisation could occur was uncertain with cost a key factor. However, there could be contracted weed removal services.

Shortage of skilled labour was a constraint, but Brexit would get rid of people who weren't interested in learning or training, The project was intended to appeal to the younger generation.

Insurance was an issue. Who was to blame if the owner changed the programme and the machine crashed? Or supposing it was hacked into and went walkabout?

It needs to be remembered that new technology has to be socially acceptable. Someone was telling me about a robot that would trundle round the countryside zapping weeds with a laser and no doubt announcing 'This vehicle is exterminating'. Would you like to meet that walking your dog?

'Policy is coming home'

Harrogate: That was the message from NFU Deputy President Guy Smith at the Future Farmers of Yorkshire meeting on how to succeed post-Brexit at the Great Yorkshire Show today. Policy was going to be made back in the UK for the first time in 40 years.

Government had to help farmers to harness new technology and boost productivity. Farming was essentially a risky business. One was never sure of the value added going forward. That was why governments helped farmers across the world.

In discussion it was noted that people's relationship with food was changing. Nutrition had to be embedded as a value in food.

It was possible to under estimate the resilience or extent of innovation in the sector.

I will post the text of my talk later in the week.

Will biocontrol work for arable farmers?

Harrogate: This was the subject of a seminar organised by the Farmer-Scientist Network of the Yorkshire Agricultural Society at the Great Yorkshire Show today.

Dr Roma Gwynn of Biorationale said that there was no precise definition of biocontrol, but it was about substances based in nature, There was a global annual growth rate of 20 per cent in biopesticides compared with five per cent for chemicals. 30 per cent of active substances registered in the EU were now biocontrol and 50 per cent of those coming through. They were extensively used in horticulture, but there was considerable scope in arable.

Professor Rob Edwards of Newcastle University said that diagnostics helped us to decide where we should and should not use chemicals. A spring wheat trial had been carried out in 2017 and a winter wheat trial on three sites in 2018 to see what worked with different resistance and different treatments. We were going to have to wean ourselves off pesticides. Roma Gwynn said that we should make those we do have last as long as possible.

No difference had been found between treatment regimes and varieties, but there was more protein in biocontrol treated plants. The objective was to enable plants could better access nutrients by placing microorganisms around the root. A more plant centric approach was needed.

It would be 10 to 15 years after Brexit before any distinctive UK legislation would be possible. The project was the beginning of a much longer story.

Rob Edwards said that we had to move from fixing things that were broken to stop them happening in the first place. We were using old fashioned testing criteria for new varieties.

Dr Gwynn said that the project had the potential to drive the conversation, to take evidence to government.

Rob Edwards showed a kit which gives an idea of how strong the resistance trait was. One was managing blackgrass rather than total eradication which was not feasible.

In discussion the importance of healthy soil was emphasised. There were benefits from growing crops together, a polyculture type of production. The challenge was to match that up with modern machinery. Growing clover as a cover crop benefitted the soil, nitrogen input was reduced. Monoculture was a perfect system to encourage pests and disease.

Biocontrol is variable, affected by the weather, not as consistent as conventional chemistry. There was a need to do a lot of things together [implying more demanding management and a higher level of skill].

Work was needed on public perceptions of biopesticides. There were a lot of preconceptions in the public and a need to understand what these were. People would happily buy biocides, but once technology went into food, perceptions changed easily.

A farmer questioned the compartmentalised terminology which was not helpful. What was conventional agriculture?

Rob Edwards noted that alternative UK technologies were used extensively in sub Saharan Africa. Roma Gywnn observed that Kenya had established biocontrol and integrated pest management before Europe had moved. The Kenyan Government had listened and changed regulation.

Wales needs a 'farming plus' policy

Wales must develop a 'farming plus' policy post Brexit to ensure a sustainable agriculture argues Professor Terry Marsden: Post Brexit Farming Model

He concludes, 'Developing a reinvigorated and branded quality agri-food strategy, based on a more diverse set of farming practices, thus becomes a critical element of the post-Brexit approach in Wales.'

Food could rot at ports in the event of a 'cliff edge' Brexit

The British Retail Consortium has warned that there will be food supply issues in the event of a 'cliff edge' Brexit: Food supply issues

The retail organisation warns: '[The] supply chain is fragile. Failure to reach a Brexit deal – the cliff edge scenario – will mean new border controls and multiple "non-tariff barriers" through regulatory checks, creating delays, waste and failed deliveries.'

'This could lead to dramatic consequences, with food rotting at ports, reducing choice and quality for UK consumers. It could also lead to higher prices as the cost of importing goods from the EU increases.'

Scotland to cap basic payments

Defra has moved away from capping Basic Payments to farmers as they are phased out. However, in its consultation paper on post Brexit policy, the Scottish Government suggests capping payments at £25,000 a farm. This would affect 5,000 farm businesses and raise £140m. An alternative option would see payments capped at £200,000, affecting just 50 farm businesses and raising only £4m.

Money raised would be used to support new entrants to farming and smaller businesses, although there is scant detail on how this would be achieved.

Trump administration looks to bail out US farmers

The Trump administration is looking into ways of offsetting the financial losses American farmers have suffered from its trade battle with China. Beijing is set to raise duties by 25 percentage points on Friday on $34bn of US goods in retaliation for new American tariffs. Among the biggest targets are soyabeans, the largest agricultural export to China.

The threat has pushed the US soyabean price below $9 a bushel, an unprofitable price for many farms. Last week, futures slid a further 4 per cent.

Consideration is being given to using the Commodity Credit Corporation set up in 1935 by President Roosevelt. It has $30bn in borrowing authority from the Treasury and latitude in how its funds are spent. Congress in March broadened its authority by lifting curbs on its authority to support crop prices and remove commodity surpluses.

Farm groups have set to head off President Trump's aggressive trade tactics against China, Mexico, Canada and the EU without success. There is concern that in the lomg run tariffs could lead to more land being converted to soyabeans in Brazil.

Cheese mountain in the US

The US has amassed the large stockpile of cheese since records began 100 years ago. If gathered together. the different varieties of cheese would weigh 630 million kilograms and occupy roughly the same amount of space as the Capitol building in Washington DC.

Stocks have increased because processors have more milk than they can cope with, and it is easily stored as cheese. Milk production has reached record levels thanks to selective breeding and consolidation in the agriculture industry, but consumption has fallen as consumers have embraced non-dairy alternatives such as almond milk. The average American now drinks 18 gallons of milk a year, barely half of what they drunk in the 1970s.

In 2016 the US agriculture department bought more than 40 million kg of cheese to reduce a surplus that was 16 per cent smaller than the current one.

When the EU had extensive intervention buying, cheese was not included with one or two minor exceptions.

Animal welfare standards at risk after Brexit

Animal welfare standards are at risk after Brexit according to a report from the Food Research Collaboration at City University: Low standard imports

Macron is president of cities says French farm leader

Just as England's NFU has a woman leader for the first time, so does France's leading farm lobby, the FNSEA. Christiane Lambert, a 56-year old pig farmer, does not hold back in giving it large to President Macron. She says that his image is as a president of the cities who had no idea how farmers lived and worked.

She thinks that French farmers stand to lose €5bn over the next budgetary period if cuts in the CAP budget are confirmed. She thinks that Macron is dithering over the issue. Last year the number of farm bankruptcies in France rose by seven per cent.

More competitive countries such as Germany and the Netherlands have pushed down the prices of beef. dairy and pork products and gained market share abroad. Ms Lambert thinks that labour intensive farming activities have suffered from distorted competition from German producers who employ cheap labour from Bulgaria and Romania.

French farmers are resorting to their usual direct action tactics, planning to block 13 oil refineries tomorrow. The farmers are protesting against imports of palm oil to make biofuels.

Committee report criticises Defra

The House of Commons Defra Committee has produced a report in response to the Government's consultation on the future of agriculture: Report

It states, 'The evidence from a range of agricultural businesses indicates that their sectors will face significant impacts from the proposed withdrawal of Direct Payments. The level of impact will vary by sector as the economics of each are so different. There are likely to be particularly damaging effects on grazing livestock, cereal and mixed farms and the withdrawal of support and any subsequent closures of businesses could have wide reaching impacts on the rural economy and its communities. As in our Brexit: Trade in Food report, we were disappointed that these impacts have not been thoroughly assessed by Defra on a sector-by-sector basis, to then inform future agricultural policy.'

The report notes, 'The consultation paper lacks discussion of wider food policy and has failed to link agricultural policy to wider public health goals and reducing diet-related diseases. Healthy food makes a wider contribution to public health, which is in the public good and we recommend it should be supported as such under the new model of awarding payments to farmers.'

The future of agriculture

The Defra consultation on a future domestic agricultural policy received 44,000 responses, among them that from the Farmer-Scientist Network of the Yorkshire Agricultural Society which you can read here: Consultation response

I think that we submitted particularly strong sections on public goods, international trade and animal welfare.

Choices on food policy

The House of Lords European Committee has published a report on Brexit: Food Prices and Availability: Food Prices

The report finds: 'If an agreement [with the EU] cannot be negotiated, Brexit is likely to result in an average tariff on food imports of 22%. While this would not equate to a 22% increase in food prices for consumers, there can be no doubt that prices paid at the checkout would rise. To counteract this the Government could cut tariffs on all food imports, EU and non-EU, but this would pose a serious risk of undermining UK food producers who could not compete on price.'

'At least as significant as tariffs are the non-tariff barriers that may result from Brexit. The Government remains confident that it can secure an agreement that would allow ‘frictionless’ imports of food from the EU to continue, but it is unclear how that would be possible outside of the customs union. Any such agreement would be likely to require the UK to mirror all EU standards and regulations; a condition the UK Government may find politically difficult to accept.'

'If no agreement is reached, and food imports from the EU are subject to the same customs and border checks as non-EU imports, the UK does not have the staff, IT systems or physical infrastructure to meet that increased demand. Any resulting delays could choke the UK’s ports and threaten the availability of some food products for UK consumers. The Government’s proposed alternative is to allow EU imports through with no, or very few, checks: this raises safety concerns as well as questions over how customs charges would be processed.'

'As well as securing a deal with the EU that will allow continued tariff-free, frictionless imports of food, the Government must also secure agreements with the non-EU countries from which the UK currently imports food as part of EU trade agreements. 40 such agreements are currently in place, covering 56 countries and accounting for more than 11% of UK food imports. The Government’s belief that most can be simply and easily ‘rolled over’ is not shared by those who have given evidence to previous EU Committee inquiries.'

The report concludes, 'The Government should develop a comprehensive food security policy for the UK. A long-term view is needed on whether to prioritise food standards or food prices, whether to reverse the UK’s declining self-sufficiency or increase imports. Other factors should include workforce shortages, priorities for investment, and bigger, global issues such as the impact of climate change on food production worldwide.'

CAP budget to be cut by 5 per cent

The European Commission's proposals for the 2021-27 EU budget suggest a 5 per cent cut in CAP funding. (Some analysts think that the cut is actually bigger). Direct payments would be reduced by four per cent and Pillar 2 payments would take a fifteen per cent hit: Budget cut

Payments to farmers would be capped at €60,000. This is at the lower end of the €60,000-€100,000 spectrum suggested in the original communication on the CAP last autumn. The relatively low capping figure favoured by the Commission will reassure UK farmers concerned about being put at a competitive disadvantage by the reduction of direct payments after Brexit.

The Basic Payment Scheme will be renamed the 'Basic Income Support Scheme'. This is the first time the EU has explicitly identified area payments as being for the purpose of income support. It is an inefficient means of supporting income as the relationship between farm size and household income is far from straightforward.

Risks for food and drink sector from Brexit

A report from a House of Commons Select Committee on Business, Energy and Industrial Strategy highlights some of the risks that the processed food and drink sector faces after Brexit.

'The processed food and drink sector is the largest manufacturing sector in the UK and contributes £28.8 billion to the economy. Exports were worth £22 billion in 2017 and they continue to grow. The sector directly employs 400,000 people throughout the country, a third of whom are EU nationals. It is characterised by just-in-time delivery of products with short shelf lives and is heavily integrated with supply chains spread across the UK and the EU for sourcing raw materials, processing goods and selling them. Many manufacturers have factories in both the UK and the rest of the EU.

The success of the UK processed food and drink sector has been so far highly dependent on participation in the Single Market and Customs Union: free movement of goods and people have tipped the UK export balance towards an over reliance on the EU as a trading partner with 60 per cent of UK exports going to EU markets. 50 per cent of total UK food and drink exports go to five countries, four of which are EU member states.

It is crucial that the sector is able to remain competitive when we leave the European Union as failure to do so would not only impact businesses and workers but also consumers at the till point and the choice available to them in shopping aisles all year round.

The sector would undeniably suffer from reverting to WTO tariffs in the event of a ‘no deal’ scenario. The EU’s Most Favoured Nation tariffs under WTO rules would be disastrous for UK exports and must be avoided at all cost. It is unrealistic to expect that the sector will stop relying on the EU as its main export destination at least in the short term. Consequently, the negotiation of a free trade agreement with the EU should be the number one priority for the Government. Should the UK lower or remove its tariffs on imports in the future, the consequences for British farming could be extremely damaging and the positive impact on prices for goods to households is likely to be very limited.

UK competitiveness would also be adversely affected by any additional delays and bureaucracy encountered at the UK-EU border, given the prevalence of cross-border just-in-time supply chains in the sector. The Government should seek to secure as few additional impediments to trade between the UK and the EU as can be negotiated. Frictions at the border between Ireland and the UK are of particular concern as the sector is highly integrated across the two countries. A credible solution to avoiding a hard border must be found as soon as possible.

The EU regulatory regime in food and drink is also highly integrated, and the UK is a full member of the European Food Safety Authority (EFSA). EU food regulation is associated with high safety and quality standards and already allows divergence. The majority of the evidence was in favour of remaining aligned with EU regulation as it is favourable to exports amongst other things but some opportunities from divergence were identified in a few sectors. Nevertheless, all were unanimous in rejecting any ‘race to the bottom’ as UK consumers would not tolerate any lowering of standards. Most stakeholders also supported the UK continuing its membership of EFSA after Brexit.'

The full report can be found here: Report

The future for agriculture

At last week's Agricultural Economics Society meeting, Jonathan Brooks of the OECD convened a panel on the links between agricultural market prospects and policy challenges at the global, European and UK levels.

At the global level, food prices increased sharply in 2007-8, sparking fears about food security as well as about the earth's capacity to produce enough food for a growing and increasingly wealthy population.

World population growth is slowing. The growth in consumption has halved over the last ten years and is not coming from per capita income growth with the exception of Africa. This pattern is different for dairy, sugar and vegetable oils. India is driving dairy demand. Cereal demand is driven by animal feed.

Since 2007-8, world agricultural markets have stabilised, with prices of most commodities well below the peaks of a decade ago. The return to lower prices has led to resurgent demands for agricultural protection, with several large emerging economies now adopting policies previously pursued by high income countries. PSE levels have increased in those countries.

Markets also remain vulnerable to periodic shocks, and many countries have sought to find ways of managing the risks such shocks pose to both producers and consumers, often via policies that may have a significant impact on world markets (such as public stockholding).

Over the next ten years, the demand for most agricultural commodities is projected to slow. This will provide relief to the supply side challenge of feeding a rising world population and provide greater room for policy makers to focus on the parallel requirements of using the world's resources sustainably and making an effective contribution to climate change mitigation.

One interesting point was that a small number of countries dominate the production of particular commodities which does lend some reinforcement to food security arguments. Russia and Ukraine are increasingly important in world grain trade, but could withdraw exports to protect domestic markets in conditions of tight supply.

What can we learn from New Zealand?

One of the most interesting panels I attended at the Society of Agricultural Economists conference at the University of Warwick was on what, if anything, we could learn from the reforms in New Zealand, often held up as an example of the benefits to be obtained from a radical eradication of subsidies. Interestingly, the position first taken in the discussion was that the experiences were so different in terms of geography, the prevalence of cooperatives, the timing and form of subsidies etc. that little could be learnt. However, as the discussion progressed, some lessons were extracted.

It is important to understand the context in which reforms took place. New Zealand was suffering from fixed exchange rates, the Think Big energy projects and high inflation, leading to a fiscal crisis. The subsidies were in place for a relatively short time and were also offered to manufacturing to offset the effects of a high exchange rate. Capitalisation into asset prices did not have the same impact as elsewhere.

For a long time New Zealand agriculture enjoyed preferential access to UK markets at guaranteed prices, but in the 1960s commodity prices fell. There were some really sad cases among farmers, but not that many went bankrupt. Because most farms were family farms, some use was made of unpaid labour.

New Zealand had first mover advantage with exports to China, but failed to follow through on that and let others capture market share. Hence, the first mover advantage was squandered.

New Zealand had 67.8m sheep in 1985 and 29.1m in 2015. The dairy herd has expanded, particularly on the Canterbury Plains, but this has led to concern about environmental impacts in terms of climate change and water pollution.

It was pointed out that the structure of cooperatives allowed the rapid transmission of intelligence from external markets to producers.

Some specific mitigation measures were provided. For example, although subsidies on interest payments were withdrawn, the actual payments were kept at the same level. There was also help with farm business plans.

The UK should aim for value added growth, but what sorts of policies did this imply? One approach might be to enhance the knowledge base.

Food, Brexit and Northern Ireland

Tim Lang and his colleagues have produced an important briefing paper on the issues that arise from Brexit for food in Northern Ireland: The critical issues

They argue, 'Food is central to the economy of Northern Ireland, and the continuing supply of safe, high quality, healthy food is currently dependent on the absence of border controls between Northern Ireland, the Republic of Ireland, Great Britain and the rest of the European Union. Hundreds of thousands of tonnes of food criss-cross these borders every year. They are currently free from inspection because of shared, underpinning EU Single Market regulation. An unplanned or mishandled food border imposition is likely to have powerful, destabilising consequences for the integrated nature of food supply, trade and access within Northern Ireland for many years to come. It would raise important challenges for food safety, put jobs at risk, potentially constrain Northern Ireland’s access to health-supporting foods such as fruit and vegetables, and create opportunities for food fraud and crime.'

They rightly rule out technological fixes for which specific details have never been provided.

Devolution choices after Brexit

The Institute for Government has issued a report on relations with the devolved administrations after Brexit which focuses on agriculture as one of the areas in which key decisions will need to be made. Some of the main points are reproduced below. The report as a whole can be accessed at: Devolution after Brexit

In particular, how can funding be distributed? Option one would be to use the Barnett formula, which would give greater flexibility to the devolved administrations, but leave devolved budgets more vulnerable to UK government cuts.

Distributing this funding through the Barnett formula would mean that the future level of agricultural funding available for the devolved administrations would be tied to policy decisions made by the UK government. While the devolved administrations would gain greater day-to-day control over how their budget is spent, they would run the risk of their budgets being squeezed in the event the UK government chose to cut the English agriculture budget.

Option two: The UK could decide to create a ring-fenced agricultural support budget, which would be the least change to the current arrangement An alternative approach would be for the UK to establish a new agricultural support budget, protected and separated from the wider devolution budget settlement and ‘block grant’.

The initial distribution would likely reflect the current split through CAP and these levels would be maintained until 2022; reflecting Michael Gove’s commitment to match-fund agricultural support payments. After that, there would need to be an agreement on how the budget was agreed for future years.

The Barnett formula would be one option, but the creation of a new, separate budget is an opportunity to take a different approach. A new budget could allow the governments to create a new funding mechanism, taking into account some of the criticisms of Barnett. The budget could be negotiated periodically, formally and at a four-nation level, as part of the UK government’s spending review.

A ring-fenced agricultural budget for each nation would offer a greater guarantee to farmers in the devolved nations, with funding levels set for a specific period of time. It would protect them against money being reallocated to other policy priorities. A ring fenced budget would also make the UK rather than the devolved governments responsible for resolving the difficult trade-offs between agriculture and other policy areas. Ultimately, from the devolved administrations’ perspective, agreeing to this type of budget could be a missed opportunity for greater autonomy in spending decisions, preventing them from making their own decisions around policy priorities and funding.

An important first step will be reaching consensus on what the UK ‘internal market’ is, and where divergence becomes market distortion. Just as the EU’s single market contains provisions to ensure a ‘level playing field’, the UK Government and the devolved administrations will need to consider what a UK level playing field should look like.

Back to 1947?

Today I attended a Defra consultation meeting on the agriculture and food green paper in Harrogate. There was a good attendance of over eighty people,including a large contingent of farmers.

Defra personnel insisted that 'nothing was set in stone', but they also said that the secretary of state had set a very clear direction of travel.

The clear view of farmers in the direct payments breakout session was that they wanted an across the board reduction in support, i.e., no capping.

There did seem to be a hankering for the world of the 1947 Agriculture Act. In particular, deficiency payments were mentioned. However, the Treasury would never endorse them as the spend is so variable.

I am not convinced that all the money saved by capping will be transferred to new farm schemes. Many of these schemes may not be accessible to all farmers, so the idea that any money lost in direct payments will be compensated elsewhere is optimistic.

It was argued that the figures that showed a high level of dependency in support payments were too optimistic, i.e., the level of reliance was even greater.

It was evident in a discussion on knowledge transfer that many farmers were benefiting from small self-help groups where they could see new methods tried out in practice. However, it was probably the more efficient farmers that were making use of these arrangements.

Above all, a great deal of uncertainty prevailed given that we do not know the shape of any trade deal with the EU and third countries.

Fruit and vegetable production should get post Brexit boost

The Landworkers' Alliance has issued a report arguing that fruit and vegetable production should be boosted after Brexit: New deal for horticulture

It argues that directing more of the budget towards fruit and vegetables will deliver much of what Mr Gove wants in terms of health and sustainability.

However, it is already difficult to secure labour to pick such crops. Google searches by Romanian, Bulgarian and Polish citizens looking for agricultural jobs in the UK dropped by 34 per cent in the past year, according to a study by GK Strategy and OneFourZero.

The fall in interest from overseas has not been matched by an increase in searches from UK workers for UK farm jobs. Bulgaria saw the largest drop, with 2,000 fewer searches for UK jobs in January 2017 compared with the same time the year before.

The two companies said Google search data was a good early indicator of changing behaviour patterns because people increasingly looked online for job vacancies.

The UK agricultural sector already has a 29 per cent shortfall in seasonal workers. The Government has so far failed to introduce any kind of special scheme.

RPSCA calls for two tier animal welfare support after Brexit

The RSPCA has published a report Into the Fold discussing how animal welfare could be supported as a public good justifying taxpayer support. It suggests a two tier system that limits support to those who go 'above and beyond' the minimum in animal welfare: RSPCA proposals

The RSPCA argues that producers should not be rewarded for 'business as usual' or for being legally compliant. Tier one would be a transitional payment awarded to producers for things such as improving buildings, better stocksmanship or to compensate for higher running costs.

Tier two payments would be awarded to members of a higher welfare assurance scheme, such as RSPCA Assured, covering the whole life of the animal.

The report gives some examples of payments that could be made to farmers and how much they would cost. For example, allowing all pigs access to straw might cost £70 a weaner and would amount to £20m if 25 per cent of the national herd not currently weaned on straw were to take up the support.

Implementing a veterinary plan to cut lameness in sheep might cost £10 a ewe, giving a total bill of £89m annually based on a 25 per cent uptake of flocks not currently covered by RSPCA standards.

These are quite substantial sums given the amount that would be released by 'capping' payments to larger farms and the fact that there will be other claims on that money.

Defra to get big staff boost

Defra gets the second largest additional sum of any department (after the Home Office) to prepare for Brexit, an additional £310m. About 80 per cent of its work is affected by Brexit, given that its main task in the past was to seek to influence EU policy and implement directives It needs to develop new systems for agricultural policy, fisheries management and environmental protection. In particular it needs to develop the Government's rather vague green paper on food and farming into a set of viable policy instruments.

Staff will be boosted by 65 per cent. Of course, in the interim, many experienced staff have been lost. Under New Labour I had a period of secondment with the animal welfare team, and I was impressed by the way they integrated veterinary expertise with more generalist skills. But, like the rest of Defra, they were subsequently hollowed out.

Stakeholders such as the NFU will be giving evidence to the House of Commons Defra committee about the department this morning. It will be interesting to hear what they have to say. The initial discussion seems to be about farm policy rather than Defra's capabilities, but I will watch some more later.

The grass isn't always greener in New Zealand

As Brexiteers point to the sunlit uplands, they draw attention to the way in which New Zealand agriculture has flourished since the withdrawal of subsidies. A number of caveats are necessary. The original measures were accompanied by a devaluation of the New Zealand dollar and an end to restrictive practices in ports. Even so, some farmers did take a big hit and went out of business.

What strikes me today about the New Zealand economy today is how dependant it is on exports of dairy products and in turn how important the Chinese market is. Admittedly, the share of dairy products in exports peaked a couple of years ago at 35 per cent and has dropped to just under 30 per cent, but that is still a heavy reliance on one set of products. New Zealand does, of course, have an ideal climate for dairying, although there are environmental concerns about levels of water abstraction for irrigation and the pollution resulting from intensive dairy farming: Green image threatened .

The co-operative Fonterra is New Zealand's largest company and the world's biggest dairy exporter. It supplies almost a quarter of New Zealand's exports. China is its biggest customer, consuming a quarter of the milk produced by Fonterra farms.

It will be recalled that in 2008 Sanlu, in which Fonterra held a 45 per cent stake, was involved in a scandal involving infant feeding power which led to the deaths of six babies and left tens of thousands and others in hospital. The Chinese authorities did not hold back and executed two of those involved and jailed others. The scandal helped overseas companies dominate China's powdered milk market. Foreign brands account for about three quarters of powdered milk sales in China - worth $19.7bn a year.

Now Fonterra has lost out in a different way through its minority stake in Chinese infant formula manufacturer Beingmate. It has lost 70 per cent of its market value in three years and has made losses in the last two years, $152.5m in the year ending December 2017. There have been problems with pricing after a clamp down on price fixing, the distribution network and the discovery of counterfeit powder by the Shanghai police which hit revenues.

Farmer members of Fonterra are getting increasingly concerned and urging the co-operative to drop the investment.

A shortage of experts

The Sunday Express once named me as one of the five hundred most influential people in Britain because I was the only person who understood the Common Agricultural Policy. This was wrong on two counts. First, I have never fully understood the CAP: I am always making new discoveries about its complexities.

Second, there are a dozen or so academics in Britain who understand the CAP better than I do from the disciplines of economics (Alan Swinbank, Alan Matthews), law (Michael Cardwell) and political science (Alan Greer). Conspiracy theorists may wish to note that three of them are called Alan: is this a derivation of 'alien'?

Sometimes the media contact me on the assumption that as I know something about the CAP, I must understand the Common Fisheries Policy as well. It is a mystery to me. I know that we have had enough of experts, but the one academic expert on the CFP that I knew has long since retired. I am aware that there are some conflicts about fishing stocks between marine biologists and fisher folk. The best short account I can find of the CFP is here: Senior European Exp**ts

What is clear is that fishermen (they are mostly male) do follow a very dangerous and demanding occupation and live in tight knit communities. They have been vociferous in their criticisms of the CFP and bringing it to an end is one of the core demands of Brexiteers who see it as an affront to British sovereignty and an area where we need to take back control.

The fact that the EU now appears to be using the CFP as a bargaining chip in the negotiation is potentially politically explosive. Continued access for EU fishing vessels to UK territorial waters in accordance with existing fishing rights is being advanced as a trade off against tariffs on agricultural products and, more importantly processed food and drink products to the EU.

But we should remember that this is a negotiation. Each side is going to push its own interests and perspectives, but ultimately there is a mutual interest in finding common ground. Hopefully.

'Flexitarians' are the real challenge

In the latest Farmers Weekly a 'Cotswold farmer' argues that the vegan movement can be defeated by a lack of publicity. 'I would suggest that we as farmers stop trying to justify our industry and ignore the vegan militia. The press will become disinterested with no televised arguments or public squabbles, and the issue will fade from the public eye.'

I think that the issue is more fundamental as it involves moral or lifestyle choices, changing conceptions of personal identity and what constitutes a well lived life. That moral choice is in my view undermined if people are pressured to eat only particular types of food, rather than making a choice based on an assessment of the issues.

The number of vegans (people who consume no animal products, including dairy or eggs, has trebled in the last decade according to the Vegan Society but still only make up about one per cent of the population). About five per cent of people are vegetarian, but 55 per cent of meal alternatives are eaten by non-vegetarians. I prepare vegetarian food for vegetarian friends or a vegan picnic for a vegan friend.

The AHDB states that 'flexitarianism' is a bigger issue than vegans or vegetarians. 'There are more people looking to limit the amount of meat they eat.' They are concerned about health issues and the contribution of livestock farming to climate change. There is an effort to go without meat on at least one day a week (which, of course, used to be Catholic practice). Concern about animal welfare is also on the rise, particularly among younger people.

The decline in per capita meat consumption has been masked by population growth. But there should be more marketing opportunities for fruit, vegetables and pulses - if farmers can get the staff to harvest them.

NGOs seek full ban on neonics

Please note that the following is a press release from Pesticides Action Network Europe:

'The European Food Safety Authority (EFSA) published today [28 February] 3 reports on the new scientific findings on the toxicity of imidacloprid, thiamethoxam and clothianidin (neonicotinoids) to bees. The Authority highlights that most studies show that neonicotinoids have a negative impact on bees’ health, from damaging their orientation capacity to impairing their reproductive ability. On 24 March, the European Member States will have the possibility to vote for a ban on neonicotinoids; hopefully these reports will contribute to a total ban.

In the frame of the restrictions on the use of neonicotinoids in 2013, the European Commission committed to initiate a review of the ban within 2 years. The EFSA was given a mandate to collect all available scientific evidence on the toxicity of neonicotinoids on bees. The data were then analyzed by the Authority and today, it has published an opinion on imidacloprid, thiamethoxam and clothianidin.

The Authority concludes that the majority of the studies show a negative impact to honey bees, bumble bees or wild bees. Furthermore, the Authority points at the high level of contamination of the environment as the majority of the studies could not be included in the opinions as their controls were contaminated with neonics.

Based on a November 2016 report from the EFSA, the European Commission has made a proposal to Member States to ban neonicotinoids except for glasshouses. The report at the time indicated that, based on new industry data, there was no safe use of the 3 substances. The proposal was nevertheless not put to a vote in the Standing Committee on phytopharmaceuticals as several Member States asked to wait for the publication of today’s report.

Martin Dermine, PAN Europe’s pollinators expert said: "In 2013, there was enough evidence to totally ban neonicotinoids. In the meantime, an impressive amount of additional evidence has been piling up over the last years and the EFSA reports are a small glimpse of such evidence as the EFSA limited its study to bees and to the evidence available until June 2016. EU pollinators are facing a dramatic decline and neonics have now clearly been shown to be one of the major causes. Member States have no choice but to ban neonicotinoids".

As a member of the Save The Bees Coalition, PAN Europe will be advocating, together with nearly 100 NGOs across Europe, to finally obtain a full ban on neonicotinoids.'

I do not have any reaction from farm organisations at present.

Gove goes for low hanging fruit

The briefing surrounding today's consultation paper on domestic agricultural policy has made it clear that direct payments will be reduced to bigger farms to free up money for other purposes. The paper sets out various ways in which this might be done which then form the basis of consultation questions. At this stage I don't want to get bogged down in the detail, but instead consider the principle.

There is no doubt this will be politically popular. Why should wealthy individuals be subsidised to farm? My sense is that most of the public have rather a sentimental view of agriculture made up of small farms. Another issue here is the vegan campaign run on social media in January. I think this was rather effective and has rattled livestock farmers who often failed to respond very effectively. But that is another story.

I also think that one of the issues here is that tax breaks encourage individuals to buy farms and farmland for tax avoidance reasons. This is a complex subject, as one does not want a tax structure that inhibits succession.

What is interesting is that the issue of competitiveness has dropped off the agenda to some extent. It appears in a form in debates over poor productivity, but they are not a central focus in the way that public goods are. Competitiveness is mentioned nine times in the document, for example in relation to the opportunities offered by new technology, and productivity forty times.

Large scale grain farmers in Northern France and Northern Germany will continue to receive CAP subsidies, albeit somewhat reduced because of the loss of the UK contribution. To over simplify, the international grain market is driven by supply and demand considerations, but price is clearly a factor. The UK needs to be very careful not to use pesticides prohibited in the EU or they may find their exports of grain blocked.

I think there is a better clarity/hierarchy of objectives in the Government's thinking that one found in the CAP. I am not against caps on subsidies. But I do think we need to be aware of the consequences.

The future for food, farming and the environment

The Government consultation document is now available with replies required by May 8th. I have not had time to analyse it yet, but hope to do so before long: Consultation

This is clearly an important stage in the evolution of a domestic agricultural policy after Brexit, although I have some scepticism about how much government is influenced by the responses submitted.

Macron takes on the farmers

No one should underestimate President Macron's determination to modernise France, but farmers are one of the most difficult groups to deal with. They may be only three per cent of the population, but they have considerable public sympathy. British farmers have resorted to direct action from time to time, but if they blockaded roads as often as the French do, public opinion would soon turn against them.

I am no expert on France, but it does seem to me that food is absolutely integral to the national culture. Apart from perhaps Italy, there is no country where I can eat so well so consistently at reasonable prices.

I also happened to be up in the mountains the year before last when transhumance was taking place and this gave me some idea of how important farming is culturally in France. Britain is a much more urbanised nation in outlook.

Emmanuel Macron endured jeers and whistles on his first visit as president to France’s largest agricultural fair amid growing tension between his government and the country’s farmers, although earlier in the week 700 farmers have been invited to the Elysée Palace in a charm offensive. Mr Macron was confronted by hostile crowds on Saturday as he toured the showground in southern Paris, underlining the difficulties he faces in winning over France’s powerful agricultural lobby, which has been angered by EU trade talks and Chinese land purchases. Last year the acquisition of 900 hectares of farmland in Allier and 1,700 hectares in Indre by Chinese investors caused alarm.

In a tense exchange with a farmer over a weed-killer which the government has said it will ban, a visibly angry Mr Macron said he would find solutions for farmers who were unable to replace glyphosate, which is claimed to be carcinogenic. The Salon de l’Agriculture traditionally brings France’s political class into close, and often confrontational, contact with the country’s farmers. Last year, Mr Macron was hit by an egg when he visited as presidential candidate.

Macron wants farmers to move away from an over reliance on EU subsidies and to move towards less intensive production methods.

He has said that he will curb the forces of globalisation represented by Chinese land purchases. But he recognises that the EU will not have as much money for farm subsidies when Britain leaves, reducing net income by about eight per cent or some €15bn. (Sometimes I wonder if it might have been in the EU's interest to offer Dave Cameron a little more).

CAP is being eyed by Mr Macron as a French 'taboo' that needs to be revamped. 'We have come to this paradoxical situation in which the CAP has become a French taboo while our farmers continue to criticise the way it works', Mr Macron said in a speech at the Sorbonne last September.

Macron is prepared to pump in €5bn to help farmers to switch to environmentally friendly methods, find successors for their land and bring on a new generation of agricultural entrepreneurs. He wants 22 per cent of farmland to be managed organically by 2022, compared with 6.5 per cent today (ambitious in my view). He is also going to fund much needed early retirements. What he didn't seem to have much to say about were the efficient, competitive grain farmers in the Paris Basin.

As someone who has been wary of France and the French, my attitude is I admit paradoxical. I don't like their arrogance and elitism, but I would also admit their étatisme has brought some remarkable achievements. In a way I think they are most effective when they are assertive, which is why I like Macron and wish him well. But he has a tough task with the farmers.

This one slipped in underneath the radar

It is generally accepted that farmers are going to face a more competitive environment after Brexit. Support payments will be lower; there may be more competition from cheap imports; exports could be disrupted.

At the very least, farmers might expect a level playing field domestically. But that has not been the case for some time. Power has moved down the food chain to retailers. They are engaged in intense competition, not least against the interlopers Aldi and Lidl. The most important element in that competition is price. So they ask farmers to produce high quality goods at the lowest possible prices.

I have been told some stories of retailer sharp practice over the years by reliable individuals that give me cause for concern. I cannot repeat them because I do not have an evidence base. Evidence is difficult to obtain because producers fear retailer reprisals.

The Groceries Code Adjudicator (GCA), sometimes referred to as the 'supermarkets ombudsman', was designed to tackle these problems. With modest resources, some progress has been made. However, in an announcement slipped out this week when other agricultural and food stories were dominant, the Government has said that it will not extend the remit of the GCA.

It suits the government to have intense competition between supermarkets which keeps down food prices. But farmers are left as price takers.

The letter from the minister to the chair of the Defra committee can be found here: Adjudicator

Brexit and food

The House of Commons Defra Committee has issued a critical report on this topic: Brexit and food

It states, 'The Government has offered no clarity to the agricultural industry on its post-Brexit policy. The Government must offer this clarity and stability so that the industry has the confidence to invest and take advantage of the opportunities offered to the sector post-Brexit. We would like to see the Government offer policies that would stimulate home grown food production.'

'The UK has an international reputation for high animal welfare, environmental and food standards. These must not be sacrificed on the altar of cheap imports. Doing so could undermine the premium British brand and might affect our ability to negotiate trade deals with other countries. We will hold the Secretary of State to his assurances that there will be no compromise on animal welfare, environmental and food standards.'

'The Government must make it clear to industry how it intends to deal with potential regulatory divergence with the EU, and the mechanisms it will put in place to track divergence in the future.'

As a divided Government has difficulty in deciding what its policy should be on Brexit generally, I am doubtful that clarification will be forthcoming.

Dyson defends subsidies to big farms

Sir James Dyson has written to the Spectator in response to an article that said that subsidies 'absurdly' favour bigger farms.

He writes: 'My family's farming business, Beeswax Dyson Farming, farms 33,000 acres directly and has invested £75m in technology, training, soil improvement and environmental stewardship over the past five years. Subsidies we receive go directly into the activities they are designed to support but are dwarfed by our own investments.'

'If Britain wants an internationally competitive agricultural sector, rather than a domestic theme park, we must encourage investment in innovation and stewardship. Removing subsidies from efficient farms simply because they are large would remove their incentive to invest at scale. This will hurt the farming economy as we become increasingly uncompetitive against our EU counterparts.'

The 'big farms bad, small farm good' orthodoxy does need to be challenged. It is also important to raise the issue of international competitiveness which is rarely mentioned in discussion of the future of UK farm policy. Post-Brexit, UK farmers will be competing against farmers on the near continent still receiving CAP subsidies.

However, when one pays out blanket subsidies, there is no means of tracking or ensuring that they are used for investment rather than consumption. Sir James evidently does use them for investment, but this cannot be guaranteed.

Regulatory alignment needed to avoid high market access costs

The NFU's director of strategy Martin Haworth told a Euractiv seminar in London: 'We need to explore the markets in China and the United Arab Emirates, but the chance of these replacing the EU market is remote. Without regulatory alignment, the costs (of accessing the EU market) could be really high.'

Tom Hind, director of strategy at the AHDB emphasised the importance of investing in the agricultural sector, noting that 'Brexit or no Brexit, productivity will have to be addressed as the imperative facing our industry.' The sector is currently ineffective in 'translating innovation into practice. The sector needs to seize the current opportunity presented [by Gove] to enable us to be more competitive and maintain market share.'

The views put forward by a range of industry leaders at the seminar can be found here: Invest to compete

In this short video speakers emphasise their key points, Martin Haworth noting that Michael Gove speaks only about public goods and environmental payments and nothing else: Video highlights

Farmers need financial guarantees

Farmers need financial guarantees from government post Brexit if a decimated industry is to be avoided, argues former Labour agriculture minister Lord Rooker: Need to avoid Brexit cliff edge

He said that there was no sign of the promised agriculture bill and no indication of what might be in it. [It looks as if the first step will be a white paper and a period of consultation].

Farm policy after Brexit

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

Productivity challenge

The AHDB has produced a Horizon report on the productivity challenge facing UK farming: Driving Productivity

British farmers are falling behind their competitors in terms of productivity. For example, the USA and the Netherlands have raised their annual agricultural productivity by 3.2 per cent and 3.5 per cent respectively in recent years, while the UK has been limping along at 0.9 per cent.

The report argues that spending on research and development is heavily skewed towards 'blue sky' rather than 'near market' research and is heavily fragmented. There is also a lack of training with British farmers under investing in their skill base.

The migrant labour crisis is already here

It's an argument we've made before, but this is a good blog article by Richard Byrne at Harper Adams pointing out that the migrant labour crisis is already here and cannot be solved in the short term by agri tech: Migrant labour shortage

Irish beef exporters remained concerned about Brexit

Irish beef producers have not been reassured by Theresa May's pledge that cross-border trade would continue uninterrupted after Brexit. The promise of regulatory alignment was essentially a fudge that got round an awkward issue and allowed talks to proceed to the next stage. It was kept vague for political reasons.

Ireland's beef exports to the UK are worth €4.4bn a year. The largest groups have operations in the Irish Republic, Northern Ireland and mainland Britain.

Beef exporters remain concerned that the UK might yet seek to enforce different food safety and animal health rules to the EU. They fear delays when exporting to the UK; disruption to meat shipments to continental Europe via Britain; and the prospect of having to compete with cheaper imports from the likes of Brazil.

There is a concern that without full regulatory alignment, the UK could take imports from the US, Brazil and Australia - countries with different food safety and animal welfare standards to the UK.

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.

Reports on Brexit

There have been a considerable number of reports on Brexit and the agri-food sector and Birmingham Food Council has compiled a list of them with links: Brexit reports

How do farmers feel now about Brexit?

Perhaps the question I am asked most often is, 'Why did farmers vote for Brexit?' Well, the short answer is that they didn't. Or, at least, we don't have any reliable data. Opinions have been based on self-selected polls by Farmers Weekly and my hunch is that they tend to over represent supporters of Brexit.

However, they are the only data we have. The latest poll suggests that, just like the population as a whole, most farmers have not changed their mind about the way in which they voted, despite being more pessimistic about the outlook for their businesses. The Remain camp gained just one percentage point.

The latest poll of more than 1,400 respondents (two-thirds of them farmers) shows that 53 per cent of them voted to leave the EU and 45 voted to remain with two per cent not voting. This would imply a 98 per cent turnout among farmers and reinforces my view that the more committed are over represented in the poll which would tend to be Brexiteers, given that many Remain voters were not enthusiastic about the EU but thought that on balance the UK was better staying in.

The non-farmers taking part, mostly those in ancillary occupations and the wider food industry, voted 57 per cent to remain and 36 per cent to leave, 7 per cent not voting.

It is no surprise that support for leaving was highest in those sectors that have not received much in the way of subsidies: 67 per cent in sugar beet; 66 per cent in; and 57 per cent in horticulture. Dairy and sheep farmers would be more inclined to stay in the EU.

It would seem that for many leave farmers concerns about sovereignty and immigration trumped purely agricultural issues. One farmer commented, 'My biggest hope is that we will get away from the strangehold Brussels has on this country. The EU has got too Big Brother and dictatorial.'

12 months ago 45 per cent of farmers were confident that Britain would get a good trade deal after Brexit, but that figure has now slumped to 35 per cent. Among non-farmers 67 per cent have little faith in a good trade outcome.

Just 28 per cent of farmers now think they will be better off after Brexit with 46 per cent expecting to see an income decline. Before the referendum 37 per cent thought they would be better off and 43 per cent thought they would be worse off. Just 22 per cent of those in the non-farming group see a benefit to their businesses from Brexit compared with 54 per cent who they will be worse off.

Farmers' confidence hits an all time low

Medium-term confidence among farmers has hit an all time low according to the latest NFU survey: Business confidence goes into the red

One in five plans to cut investment and there is concern about rising input prices, regulation and Brexit. NFU president Meurig Raymond commented, 'everyone is concerned about the trade deal that we'll have with the EU, the domestic policy that will replace the Common Agricultural Policy and labour shortages.'

The survey showed that arable and sheep and beef producers were most pessimistic about the medium-term outlook.

The weak pound led to higher subsidy payments and helped exporters, but the devaluation has recently fed through to higher import costs including feed, fertilisers, energy and machinery.

Policy instruments for domestic agricultural policy

Following the recent workshop of the Brexit working party of the Yorkshire Agricultural Society we have produced an interim report on policy instruments in a domestic agricultural policy after Brexit: Interim Report

A more detailed report is in preparation.

Subsidies to continue for hill farmers

Defra secretary Michael Gove has told the House of Commons Defra committee that subsidies for hill farmers will continue beyond 2022. He said, 'Farmers in less favoured areas, and upland hill farmers who are producing sheep meat as well as wool ... will need support for several years to come.'

Whether payments would still be made on an area basis is unclear.

Mr Gove was not sympathetic to the NFU argument that subsidies were needed to prevent the UK becoming more reliant on imports. I have always been sceptical about the idea of self-sufficiency targets.

Confusion over CAP exit

Theresa May has said that Britain will leave the Common Agricultural Policy at the same time as it leaves the EU in March 2019. She said, 'The relationship we have on [the CAP] continuing through the implementation period with the European Union will be part of the negotiation of that period, which will start very soon.'

She added: 'Leaving the CFP and leaving the CAP gives us the opportunity to actually introduce arrangements that work for the United Kingdom.' What these arrangements might be remains unclear, as is the issue of whether the basic payment would cease in 2019.

Michael Barnier has said that Britain would remain in the CAP in the transition period. In practice the political priority, certainly for Michael Gove, might be getting out of the Common Fisheries Policy. In any event there is now more uncertainty about the future of British farming.

Conservationists estimate cost of new agri-envirionmental policy

A new report Assessing the costs of environmental land management in the UK commissioned by The Wildlife Trusts, RSPB and the National Trust, shows how much Government might need to pay farmers and land managers for their role in looking after our natural heritage.

The report estimates that meeting existing government commitments to improving natural assets such as water quality, soil health and biodiversity will cost £2.3 billion per year. But meeting existing commitments will not be sufficient to halt the decline of the UK’s wildlife and reverse this trend.

£2.3 billion is five times more than is currently spent through agri-environment schemes – the source of most current environmental land management funding. This figure does not include wider financing required in the farming sector, for example for research and development or providing advice to farmers.

The total includes £876m for protecting and improving priority habitats, which include woodlands, marshes, bogs and fens; £402m for hedges and stone walls; and £78m for flood plains.

Ellie Brodie, Senior Policy Manager, of The Wildlife Trusts said: 'Farmers can sell the food they grow through the market. But they can’t sell a whole range of services that society needs them to provide, whether it’s reducing the risk of floods downstream, creating habitat for bees or improving the health of our soils. The Wildlife Trusts believe that farmers should be paid for this as it benefits us all. A healthy, wildlife-rich natural world is valuable in its own right and is also at the core of people’s well-being and prosperity. We must be prepared to pay for these benefits.'

Christopher Price, head of policy at the Country Land and Business Association said that government agri-environmental schemes were over bureaucratic and fragmented and drew attention to the CLBA's vision of a land management contract.

The associated policy briefing can be found here: Policy briefing

Hard Irish border would be difficult for food trade

A hard border between Northern Ireland and the Irish Republic would create particular problems for the agriculture and food sectors.

Food and live animals account for the largest share of trade with Ireland. Northern Ireland is reliant on the republic for more than 60 per cent of its food and live animal exports. Agri-foods are particularly important to Northern Ireland and the sector is 'one of the few economic bright spots' according to the CBI.

Aiden Gough of InterTradeIsland told the Financial Times that 'The food industry is absolutely predominant in the cross-border trade in the island. The vast majority of trade is supply chain and goods cross the border multiple times before coming final products.'

A quarter of Northern Ireland milk and more than one-third of its lamb are processed at plants across the border. Baileys liqueur is produced in Ireland and sent north for bottling before returning to the republic for export.

Shaun Murphy at KPMG says that agriculture is 'the sector that is most at risk' because 'integrated cross-border supply chains are complex and costly to unravel'.

Given that the UK Government is not prepared to countenance Northern Ireland staying in the customs union or internal market, it is apparently prepared to consider continued regulatory convergence between the north and south of Ireland to prevent border problems.

However, that solution is unacceptable to the DUP whom the Government depends on for its majority. It would in effect create a border in the Irish Sea. It might also attract objections from other member states who could portray it as giving an unfair advantage to Northern Ireland.