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Brexit: Challenges and Opportunities for Agriculture

29th March 2019 will herald Brexit, at least for now. Any lawyer monitoring discussions between Brussels and Westminster can recognise a protracted mediation in full swing, with bouts of brinksmanship followed by small concessions and slow, gentle steps forward. The question is what Brexit will mean in practical terms for us and how might it impact on our lives and businesses.

Increasingly, I find my own thoughts dwelling on Welsh agriculture, in which my family roots are deeply embedded. What will Brexit herald for my wider family and our neighbours who farm on the eastern hills of Monmouthshire where the Brecon Beacons begin their climb northwards?

Change, certainly. There can be no avoiding that and, although no commentator can say with any reasonable certainty what that might look like, change isn’t in itself anything to fear. The difficulties with the Common Agriculture Policy are well known and well recited and the possibility of creating a replacement that is better is something to be welcomed.

The question is what that replacement will look like and whether, crucially, it will work for those farmers who exist on the margins, both geographically and financially.

Michael Gove has indicated that new government policy will see a shift from a subsidy payment based upon land ownership towards one focused around environmental protection and conservation. Not a shift, per se, as we have been seeing a slow move in that direction for some years but certainly a more rapid movement.

What’s driving this? In my view four opinions among policy makers:

  • An acceptance that self-sustainability in terms of food production in the UK is something that cannot be reclaimed.
  • A further acceptance that, if the UK is to enter into bilateral trade deals with the rest of the world post Brexit, this will further undermine the UK’s livestock sector, which is already heavily reliant on subsidies.
  • The fact that, in many ways, current subsidies aren’t working. 2016 saw 3.1bn paid by government to agriculture and yet 26% of British farms failed to break even that year.
  • A perception that rural economies will be better supported by a growth in non-farming related rural businesses, such as tourism, rather than traditional agriculture.

I wonder how many of us living and working within rural Britain would accept these opinions. Irrespective, if this is where government policy is heading, then the question becomes what will this change look like in practical terms and what risks attend it? To my mind I can see two clear issues facing our farming community.

Firstly, the question of how British farms will accommodate any change in subsidy that champions conservation and environmental stewardship. Will farmers want, or even be able to, change their existing business models to try to adapt to this and, crucially will they have the requisite support from their local communities, their financial lenders and central and local government?

Much is made of the changes that New Zealand made to its farming model in the 1980s as if this represents an example that can be followed now by the UK. However, such comparisons often ignore the role that New Zealand’s banks and government played in cushioning the impact of a massive change in subsidy on its farmers (as well as the disproportionate effect that a buoyant Asian milk export market played – something lacking in the contact of Brexit). Will our farmers have the support that they need to adapt from a wider country that increasingly seems indifferent to their fate?

Secondly, will any such changes further marginalise the role of agriculture within the context of rural Britain? I’m noticing more and more a distinction being drawn between “rural enterprise” and “agriculture” as if the two were mutually separable and, increasingly, the former being championed as a better means of driving wealth and employment within the countryside. I don’t consider it a coincidence that we see more and more in the press querying the role of Inheritance Tax Relief for agricultural land, or the suggestion of a development land tax for farmers.

To be diminished is to be made vulnerable and I fear that the changes that we are likely to witness in British farming post Brexit will see agriculture both marginalised and diminished. Our farmers, more than ever, need to rely upon the excellent work of their lobbyists and supporters in ensuring that their voice is head in the general pre-Brexit clamour. Also, upon their professional advisers so that both risk and opportunity in the years ahead can be carefully analysed and exploited. Finally, upon their own indomitable spirit in which is found, perhaps, their most enduring and invaluable strength.

Article written by RDP Director James Davies.

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