With the beginnings of Britain’s exit from the European Union just around the corner, the agricultural industry is questioning more than ever what this division will mean. Britain’s farmers currently receive 60% of their income from EU and environmental subsidies, so this change in circumstances will have a huge impact on producers. The media has bombarded us with scare-mongering by claiming that land prices will crash, British agriculture will fail, and banks and trading will collapse. But is the outlook really this bleak? After the triggering of Article 50, what are the potential positive and negative outcomes for UK producers?
On 23rd June 2016, 51.9% of voters in the United Kingdom chose to withdraw from the European Union; ending a 41-year period of confirmed membership. Since the result, many have argued that the public did not understand what they were voting for. Theresa May has since set out her 12-point plan for negotiations with Brussels as she tries to avoid a ‘bad deal’ and bring about a solution ‘that serves the national interest.’ The British public are not foolish to think that the European Union will request a deal that benefits itself and its nations too. Agriculture has benefited in many ways – perhaps more than most – from the UK’s political position in Europe and the free market; however, it is worth wading through the numerous reports and opinions to find both positive and negative potential effects that farmers and producers may feel in a post-Brexit Britain.
As there are many existing EU laws governing farming and production, there will have to be new regulation written to fill the void left by these edicts. The concern lies in the speed in which the negotiations are taking place: are ideas being rushed to make the process as quick as possible? Some worry that there will be loopholes in any new laws created by the UK Government post-Brexit that might see reduced-cost/high-profit farming methods being used. The recent headlines about chlorinated chicken from the USA may spring to mind. Foods should continue to be regulated in terms of origin, modification, and labelling.
Conversely there can be a positive light on the issue of subsidy alterations. Until 2020, the UK Government has promised to match the cost of EU subsidies. A report from the New Economics Foundation has suggested that a new deal for British farmers might save the taxpayer £1.1 billion, arguing that payments could be distributed more equally between small and large scale producers. Farm subsidies are vital for farmers, but this is mainly due to the impact of supermarket chains fighting for the market share by keeping food prices shockingly low. Outside of the European Union, Britain may have the opportunity to adapt laws to put pressure on these large businesses and, ultimately, benefit the producer and reduce the need for farming subsidies.
The potential outcomes listed above are just a few to come out of the complex dialogue and debate caused by the uncertainty of Britain’s withdrawal from the European Union. There is little we can know for sure before the triggering of Article 50 and the negotiations to follow, but it is important to remember that there are two sides to this coin. It is, however, understandable that farmers – many of whom struggle to make large profits even within the safe certainty of the EU according to DEFRA figures – fear an imbalance after the shake-up. We must anticipate the months to come and take a positive outlook on how new changes may actually benefit rather than hinder the already overwhelmed agricultural industry in the United Kingdom.