As we leave the EU, we need to reinvent farm subsidies

Sheep, by Gerry Lewis, Wikimedia

In the wake of Brexit our agricultural policy is suddenly up for grabs. This could be a chance for a ‘new deal’ for our food system – helping struggling small-scale farmers, restoring the environment, revitalising local economies and creating new jobs. Yet at the moment it appears that the agriculture and environment minister, Andrea Leadsom, prefers a ‘get big or get out’ approach that will continue to damage the planet.

Since 1973, the UK farming sector has been shaped by the EU’s Common Agricultural Policy (CAP) and its subsidies, but the original postwar purpose of CAP has long since been played out and there is a broad consensus that it has become a disaster on many fronts.

One of the biggest criticisms is that it hands wealthy landowners millions of pounds from public funds, while smaller farmers receive little or nothing. There are also strong environment criticisms, and attempts to bring environmental factors into CAP have been grossly inadequate. As a result, a system of large-scale industrial agriculture is rewarded while small-scale ecological methods are largely ignored.

Instead, a progressive subsidy system would ensure that public money is used for public goods. A report by Global Justice Now and the New Economics Foundation proposes a system that would:

1) Give each active farmer with at least one hectare of land a universal payment of £5,000

The payment would be conditional on a meaningful active farmer requirement, basic environmental stewardship such as prevention of soil erosion, animal welfare standards and some other minimum standards on a ‘do no harm’ basis. The amount is slightly higher than most farmers currently receive, and would be a significant redistribution, levelling the playing field. However this would actually save the taxpayer money because much less would go to large landowners.

2) Offer grants for medium-scale, regional infrastructure, including processing facilities and local business development programmes

This would allow local supply chains to be strengthened and maintained, while supporting new business models and small-scale producers.

3) Offer subsidies for the provision of specific public goods

Public goods could include environmental benefits around climate change, soil quality, landscape, wildlife and agricultural biodiversity. They could also include social benefits such as job creation and support for small-scale farmers, healthy good food, resilience, democratic accountability and support for local economies.

While the first element above incorporates ‘do no harm’ standards, this element would be for things that make an active, positive contribution. It could include restoring natural habitats, creating natural flood protection, preserving and passing on skills or knowledge that are important to our heritage, reducing local unemployment, increasing healthy eating, along with many other areas.

Decisions on which public goods to prioritise and how to allocate budget would be devolved to regions, thus also helping to support local democracy.

In contrast to this a recent speech by Leadsom made no firm commitment to continuing significant funding for agriculture beyond 2020. Instead, in the name of cutting red tape, she wants to cut the standards and regulations that help to protect our environment, food safety and public health – public goods that we should instead be strengthening.

In the past Leadsom has supported phasing out most support for farmers, something that New Zealand did in the 1980s. The effect there was a polarisation and emptying out of viable small and medium sized farming. The big players were able to compete but others either left farming or scaled down and took other jobs to support continued farming as a side enterprise. Loss of agricultural jobs was exacerbated. Faced with a drive to cut costs environmental concerns were dropped and the country is now facing increased problems with soil degradation and pollution from farming.

It is important to ensure that a new system of agricultural subsidies in the UK does not have unintended damaging impacts on the global south. Subsidies have long been controversial and particularly when linked to exports can undermine livelihoods in the global south. However complete removal of subsidies is unlikely to benefit small-scale family farmers in the global south – the experience of New Zealand illustrates how agribusiness moves in to take up any slack arising from loss of subsidies. More fundamentally, the majority of food that feeds the world is produced by small-scale farmers and is traded in local, regional and national markets, and there is widespread recognition of the importance of supporting domestic agriculture, both here and in the global south. Farming subsidies have a role to play, in a carefully designed, progressive system, although they cannot solve all problems on their own. A progressive subsidy system needs to be dovetailed with wider trade rules and aid policies. These are currently driving production towards a large-scale, intensive agribusiness model dependent on expensive technologies, chemicals, poor environmental practices and low wages for employees. We cannot simply use subsidies to correct that model – we need to change it.

The choices made at this point about the policies for the UK to follow, will be vital – for farmers, the environment and the public.

  • AdamRamsay

    Thanks for this Jean – very important debate.

    My only real disagreement with this is:

    “conditional on a meaningful active farmer requirement”

    For me, one of the problems with CAP is that it encourages a ‘land management’ approach, which can be hugely destructive to biodiversity, and helps cause flooding. Of course producing healthy food is a public good and I have no problem with it being subsidised where it makes sense. But on some land, in some places, it would be much better if we just let it be. Where I grew up, for example, on the Highland Line, there is a huge amount of hill sheep farming (my dad was a shepherd for about 12 years). Britain eats very small amounts of lamb, yet dedicates a vast amount of our land to growing it, largely because CAP has a requirement similar to this one. It would be much better for all involved, I think, if farmers were allowed to choose whether to continue farming, or to allow land to rewild, rather than having a subsidy regime which requires them to keep farming, even on hill land where it makes little sense to do so.

    • Jean Blaylock

      The idea would be that there could be things within the third element – the positive public goods part – that could be accessible for rewilding, natural flood defense, or similar, for people who want to do that rather than farming. The way we’ve conceived of the proposal, this third element is actually the largest pot of funds.

      It’s balanced by the first element, which is specifically to support farmers, and hence the active farmer requirement (and I know both people both in Nourish and the Landworkers Alliance have strong opinions on the need for this to be more meaningful and real than the current CAP requirement), but that is not actually the largest pot of funds in the way we’ve envisaged it. And that requirement is only for that element – not for the other two elements.

      Does that make sense?

      It’s a really useful discussion. What we wanted to do is throw out some proposals that try and get away from just tweaking the existing CAP, and hopefully spark some debate.

      • AdamRamsay

        So unlike CAP, there wouldn’t be an incentive on farming land that it doesn’t make sense to farm, so long as something positive was happening on it? I guess that makes sense, thanks.

  • Farming subsidies have a role to play, in a carefully designed, progressive system”

    I wouldn’t argue with any of the goals you’re promoting here, Jean, but … a carefully designed system wouldn’t start from here.

    Farming subsidies of the kind you’re suggesting could certainly have a role in a transition to a well designed system but I think the design of them would need to take into account the necessary changes to the underlying legal fabric. The current system is dysfunctional because fundamental laws (particularly on ownership of land) were allowed to become derelict: over a period of centuries, landowners’ rights which were originally administrative morphed into privileges. Those laws need to be reformed, and those reforms would need to be brought into effect over quite a long period, so any transitional subsidy regime would have to be designed to bridge the gap between the two legal regimes.

    As I see it, trying to mitigate the ill-effects of derelict primary law by adding layers of secondary law on top of it merely entrenches the underlying flaws. At some point, we have to address the fundamentals – the laws governing land ownership. To my mind, they are actually an easier target, because they are both historically incoherent and blatantly incompatible with modern values.

    Whether there’d be any long term role for farming subsidies in a healthy society is something I don’t think we can know from here. My guess is not.

  • mjm6mjm6

    Seem to recall NZ phasing out all production subsidies 30 or so years ago, and reading that the industry is now more profitable as well as vastly more efficient. One public good they don’t seem to have damaged is landscape beauty, though I accept that in England and Wales one of the most important public goods is access, via footpaths and bridleways, which does impose costs. However, those obligations have been in place for centuries and the associated costs will have been factored in to the purchase price or rents.

    So, why pay farmers to do their jobs, over and above the profits/losses they make from business operations? My plumber is an important chap in our lives, but I don’t see reasons to pay him a subvention from the public purse. The subsidy junkies of the NFU will predict doom, but NZ proves it can be done.

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