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Farming and Brexit on BBC Essex

View profile for Caroline Dowding
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I was listening to BBC Essex on my way to work this morning, and there was a discussion about what impact leaving the EU would have on farming in the UK, and our food supply.

Dave Lewis, the boss from Tesco, noted that the devil is in the detail. Leaving without a deal could result in holdups of food at the border or tariffs being imposed. There was talk about the possibility of having empty shelves, food stuck at the border and prices rocketing. Mr Lewis noted that 50% of all food consumed in the UK is imported and therefore there could in interruptions in the event of a no deal Brexit.

British farmers in Essex currently receive £48.4 million each year from the EU under the Common Agricultural Policy. The government has pledged to maintain funding until 2022. However, there is concern that the industry is not prepared for change.

Fergus Howie, who farms at Wicks Manor Farm in Tolleshunt Major (@WicksManorFarm), noted that the farm received approximately £169,000 last year in EU funding. Every farm in Europe receives a basic payment, which in the UK is £85 per acre. Fergus noted that this subsidy is extremely important for the farm’s income, as profits are not enough to keep farms sustained.

To allow farmers to be able to continue, and to keep the cost of food down, payments are required per acres so that farmers can decide what crops to grow, but also having the support knowing that there is a set amount per acre coming in.

Despite the almost £50 million of subsidies being received by Essex farmers, the National Audit Office confirmed that a high percentage (42%) would have lost money without the payments. Without subsidies, this would increase substantially to 75%-80%, which highlights the importance of the subsidy for the income of the farm. This would also have a knock on effect that the cost of food would have to be increased to compensate farmers.

All EU farmers under the Common Agricultural Policy receive a subsidy, but UK farmers receive the lowest payment per acre of all EU members.

Fergus noted that the UK contributes £16 billion to the EU, receives £9 billion back, of which £3 billion goes back into farming. As the third biggest contributor in the EU, other farmers in the EU will have to have a reduction in subsides, because of the 15% reduction in income to pay the EU farmers when the UK leaves.

Whilst DEFRA has confirmed there will be the same funding for farmers until the end of this Parliament in 2022 (whether or not we leave the EU), they wish to break away from the Common Agricultural Policy. However, there is concern over the fact the commitment to pay a subsidy will reduce to zero within the next 7 years. There is also very limited information available about what will happen post 2022.

Fergus noted that payments are already modulated, with 12% of the payments due to farmers taken away and put into greening options in a bid to help the environment. We can all agree that assisting the environment is a positive, but the government appears to be more concerned with their greening agenda and less so on food production.

The outcome of the discussion is that this is an uncertain time for farmers, and leaving the EU without a deal could have an impact on food and farming within the UK, as will the reduction and removal of the EU subsidies on a vast number of farmers within the UK. It is perhaps unsurprising that so many farmers are looking for ways to diversify their activities to increase income away from farming so they are able to stay afloat.

I am a solicitor in the Agriculture and Estates team, and can be contacted on 01206 217394 or caroline.dowding@birkettlong.co.uk.

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