ARTICLE 50 & AGRICULTURE
Brexit is triggered. Below is a brief digest of thoughts distilled from those Fellows and Associates who kindly responded to the invitation in the July 2016 Newsletter to comment on agricultural policy matters. Lord Plumb, FRAgS quoted Churchill who said in 1953: “Thirty million people all living on an island where we produce enough food for, say, fifteen million, is a spectacle of majesty and insecurity this country can ill afford.” David Richardson, OBE, FRAgS, founder chairman of LEAF wrote: ‘Caring wildlife conservation and environmental management can be balanced alongside and integrated with the priority of food production.’ What we have now with Brexit on the horizon, and the safety net of UK Government support until 2020, is an opportunity to shape a policy recognising that the needs of farming and of conservation are reconcilable. Sustainable agricultural policy must surely encompass the triple imperatives of viable farm livelihoods, integral environmental care and optimal UK food production.
It is now almost seventy years since the Economic Prebisch-Singer hypothesis was proposed, allowing some confidence in the validity of its assertion that the price of primary commodities declines relative to the price of manufactured goods over the long term, which causes the terms of trade of primary-product-based economies to deteriorate. John Lampitt, FRAgS concludes that there is thus an argument for a measure of public/government support for UK farming, simply because of the fundamental economic imbalance referred to in the Prebisch-Singer hypothesis, and the inherent difficulty for agriculture to survive entirely through private enterprise, especially in marginal areas. The public benefit of agriculture must be clearly articulated and, as ever, informed and motivated consumers are our best hope for justifying and achieving some such use of public money. However, the agricultural community represented within our fellowship is averse to ‘feather-bedding’ with undeserved hand-outs. Robert Campbell, MBE, FRAgS considers that farmers need to be seen as responding to public demands. We then need to outline the consequences of those demands in terms of their effect on inter-alia landscape and food supply, modify them appropriately and finally we then need to develop a ‘market’ to deliver these demands. Patrick Wrixon, ARAgS advises that we need to listen to our customers/the taxpayer before formulating policy: We need to recognise the power of the environmental/wildlife/biodiversity/human well-being benefits that farmers can provide. Both Defra and the NFU need to take a more integrated approach to policy. We will not win a battle of words with the ‘green NGOs’. Let us change our language and attitude to sell our stories (and produce). Collaboration not confrontation will get us a lot further. Negotiating/leading ‘fairer WTO policy for trading’ terms would help.
If the agenda of ‘Natural Capital’ is pursued with due sensitivity, it will result in farmers and land managers being rewarded for good management rather than subsidised. Natural Capital is to be harnessed on the basis of integral management incorporating conservation rather than unfettered exploitation. Policy emphases will be on rewards and enabling return on investment made by the landowner and manager, rather than on support and subsidy. In this connection, for the sake of UK agriculture’s competitiveness, there needs to be UK government’s revived investment in funding independent Research, Development and Extension based on due recognition of the vital role of agriculture in the real UK economy (e.g. contributing some £46 billion and employing 475,000 in 2015 according to Development Economics). Colin McGregor, FRAgS notes that the ‘UK currently imports half our food, making us extremely vulnerable. We must grow, process and buy more of our own Foods. ‘Buy British’/‘Fortress UK’ must be the mentality!’ John Latham, FRAgS stressed that competitiveness will be critical to agricultural policy. All current and future regulation will need to be critically appraised for the impact on our competitiveness. We will need a viable science-based, practitioner-informed agriculture. Consumer led and collaborative supply chains are needed to help protect and develop the agri-food sector. Environmentally sensitive practice is crucial. In addition, as Hugh Oliver-Bellasis, FRAgS points out, the UK government needs to understand the influence of inheritance and capital gains taxation policy on land prices, ownership and farming.
Professor Sir John Marsh, CBE, FRAgS offered the following key practical points to consider post-Brexit:
1. At what price in sterling will imports be available?
A. Since prices are set in dollars we need a perspective on $/£ rates & on world market prices.
B. We know that prices will be volatile. In real terms they seem more likely to rise modestly in the long term.
2. At what price will UK farmers be able to access resources?
A. Barriers to immigration are likely to raise costs for labour intensive sectors (unless seasonal worker derogations are implemented)
B. Capital access will depend on the state of the economy. Attempts to shore up growth are likely to raise land prices – a relatively safe haven.
I. Environmental policies that may restrict land use and impede some production systems (but new payments for Ecosystem Services need to accrue also…).
II. The market demand for land outside farming – not only housing and roads, but leisure, heritage, industrial growth.
III. The prices farmers are able to pay for rent depending on their profitability and the risks involved in making investments that have a long life in a market that fluctuates.
3. This provides a basis for assessing the likely equilibrium level of agricultural production. There then follows other questions?
A. Does this amount to a secure food supply? If not what options exist e g.
I. Public policy that takes a share of the risk of price fluctuation
II. Public policy designed to increase output beyond the level the market will support.
III. Public policy focussing on the food chain – making sure that there is a supply – whether from home or overseas sources – that can deliver basic nutritional needs, possibly including some rationing scheme.
B. No UK government will want to allow food prices to consumers to rise. Bargaining power outside the EU could provide leverage for highly competitive external supplies.
In this last connection, banker Nigel Davies FRAgS wrote: ‘We need to make sure that Agriculturalists are among the Trade Negotiators. We need to understand the value of UK Agriculture’s products to those from overseas that we are negotiating with, so that it doesn’t get given away too cheaply as part of a package tied in with other goods. The more the value of UK Agriculture can be heightened as a bargaining chip within the whole, the better.’ Christopher Jones, MBE, FRAgS wrote, ‘the UK’s priorities and objectives in negotiating agreement should be enhancement of the common good on both sides of the Atlantic, rather than an increase in the wealth and power over food and environment of a handful of huge companies. The Prime Minister is not alone in thinking that many have felt little benefit from increasing world trade. Agriculture, practised by large numbers of comparatively small businesses, is peculiarly vulnerable to trade deals if they are not negotiated with food and farming in mind. Statistically it may look like a small percentage of UK consumption, but it is a percentage that is peculiarly difficult to manage without.’ Legislation in the USA protects the right of local authorities to procure food locally, and so should be done in the UK. George Dunn, FRAgS concluded that we must make the most of our new found freedoms on issues like public food procurement, import substitution, labelling and export promotion while retaining the current farming expenditure but delivering it through a new three-pronged policy providing public goods, achieving farm business resilience, and developing domestic and international markets.
The Report produced for the English Panel and edited by Chris Bourchier, FRAgS summarised the strategic leadership we can offer in a rapidly changing world: ‘The Fellowship has the opportunity to make a real and positive difference for the benefit of ‘UK plc’. Guiding principles should include:
• Adding real value by targeting intellectual ‘gaps’.
• Encouraging innovation and entrepreneurship, catalysing positive change.
• Delivering holistic perspectives to inform and educate, but never lobby (as an organisation).
• Motivating and inspiring a positive attitude in all generations.
• Ensuring independence at all times.’
Advocacy is not the same as lobbying! Let’s advocate for agriculture! We can also take encouragement that between us we are strategically placed to influence agricultural policies, and sometimes to formulate them.
