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. In part 3 of our series on the potential positive and negative outcomes for UK producers we will explore both positive and negative potential effects that farmers and producers may experience in a post-Brexit Britain.
Perhaps the most dominant impact on UK producers as we come out of the collective states will be felt with the retraction of subsidies provided by the EU. With British farmers receiving 60% of their income from these subsidies, a report by Informa Agribusiness Intelligence estimates that 90% of farms would collapse without this income. Per capita reliance on EU farm subsidies is three times higher in Scotland – a section of the country that had a majority vote to remain within the Union – and Wales, and four times higher in Northern Ireland, so regions will be affected in different ways. At the moment, producers are left wondering what will replace such a huge part of their support and revenue.
Conversely, farmers and producers could, in fact, earn more after the changes in a post-Brexit society. The British taxpayer currently pays £6 billion a year into the Common Agricultural Policy, but our farmers only receive £3 billion from this subsidy group: we are effectively losing half of our investment. To claim some EU farm subsidies, farmers are incentivised to keep land clear so much of the money goes towards landowners and even wildlife spaces. With over 86 agricultural products having EU-imposed tariff-rate quotas, there will need to be a lot of complex negotiation, but each of these products could benefit in its own right. Perhaps the Brexit process will shine a light on the farming process in this country and help people to get in touch with locally-grown products.
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 even after the triggering of Article 50 and the negotiations that will 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.