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Brexit: what is next for farming?

Ian McIntyre

09 August 2017

The questions surrounding Brexit keep coming and for the farming industry there have been a number of raised concerns, particularly around the continuation of critical farm subsidies and the cap. We didn’t have to wait long to hear what was revealed in a speech last week from environment secretary, Michael Gove, who has outlined new plans for the future of farming.

During referendum campaigning, farm businesses were concerned about the future of the Common Agricultural Policy (CAP) should Britain leave the EU. The cap has a crucial impact on farm income and is worth around $58bn every year. It was set up to help sustain food supplies across the single market, so in the event of leaving the EU, farmers were faced with the possibility that they could lose this vital financial source of funds.

Under the CAP, farmers are paid according to the amount of land they farm, so it has often been criticised for only benefitting wealthy landowners and not recognising good environmental practice. Of the £2.56bn that is paid to UK farmers, 39 recipients receive £1m or more, 50 recipients £800,000 or more and 108 receive £500,000 or more. Some of the wealthiest land owners are given subsidies of up to £3m a year.

There are further inconsistencies, as there are land owners who specialise in tree planting. They do not make much money from their land, despite being set over a vast area – and added to that, planting trees is good for the environment and should be more amply rewarded.

During his speech at the WWJ’s Living Planet Centre on 21 July, Michael Gove revealed that the way farmers are supported through subsidy is about to change. He confirmed that the CAP will be abolished after Britain leaves the EU, stating that he recognised Brexit as an opportunity to overhaul the way in which Britain cares for its land. Whilst he was looking at revolutionising the subsidy, he also highlighted a need to protect certain areas of Britain where farming without subsidy would be almost impossible.

Pro-Brexit campaigners argued that life without the CAP could actually result in a better lifestyle as food would become cheaper and produced more sustainably. Without the CAP, opportunities to import from around the world will open up and therefore opportunities to cheaper food alternatives could start appearing. This does remain an option, but the Brexit campaign was light on the detail of what leaving the EU would mean to our food industry as it was for everything else. Mr Gove acknowledges that farming, just like any other business with a close connection to the EU, cannot be driven to the edge of a hard Brexit.

The plan is to replace the cap with a new system that would reward environmentally friendly farming, but the details are, as yet, unknown, but one thing is for sure – the agricultural industry knows that change is coming.

This article first appeared in the August edition of South East Farmer magazine.

About Ian McIntyre

Ian McIntyre

Ian has developed an expertise in owner managed businesses, property management companies and pension schemes. He also acts for several companies which are owned by listed companies. His meticulous approach to client needs and regulatory requirements allows him to deal in a precise and thoughtful manner to achieve results. Ian is a governor in one of the local primary schools, chairing their finance and personnel committees

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