Brexit means Gove will reap what he has sown
PUBLISHED: 11:00 06 February 2018
The environment secretary has no hope of delivering his green dream for the countryside, says PETER HETHERINGTON
Dream land, or a brave new world for farming and the countryside? Environment Secretary Michael Gove’s post-Brexit vision for agriculture and rural England, due to be outlined in a white paper shortly, risks colliding with the harsh reality of EU withdrawal.
He wants to end “unjust” subsidies for rich landowners and rightly argues that the EU’s Common Agricultural Policy, or CAP, is “fundamentally flawed” because it pays the landed class for the acres they own, regardless of how much they produce or safeguard.
As the last great subsidised industry, farming has arguably more to lose from Brexit than many other sectors of the economy. After all, the biggest chunk of farm income – almost 60% on average – comes from the CAP, which delivers at least £3bn annually to support British agriculture.
Yet government figures show that the average farm – and there are at least 200,000 agricultural holdings of various sizes in Britain – still makes an annual loss of £5,284, while many hill farmers survive on little more than subsistence incomes.
The problem is that rich landowners, and speculators looking to offload spare millions in our golden acres, have been able to exploit the system through avoiding inheritance tax and, often, capital gains tax – thus, as Gove says, driving up land prices. But the government has resisted measures to place a cap on CAP by limiting subsidies to farms over a pre-determined size – say, 2,000 acres (809 hectares).
But a majority of farms are relatively small enterprises – and at least a third are rented from either the old aristocracy or from other institutions such as the semi-state Crown Estate (which sustains the Civil List), the Duchy of Cornwall (providing an income for the Prince of Wales) or the National Trust (the largest farming landlord), as well as a string of county councils (which let land for small-scale farming). Incomes, for some, are pitifully low with some hill farmers surviving on just £10,000 annually – and that’s after a hefty subsidy.
In Gove’s up-beat post-Brexit world – and he has promised that £3bn will be magically found to continue subsidising farmers with equivalent CAP payments until 2024 – the bullish minister eventually wants to make further taxpayer support dependent on wider public benefits, such as improving hedgerows, encouraging flora and “enhancing the natural environment” by planting woodland and creating new wildlife habitats. But his vision ignores the reality of a hard Brexit.
Consider this. The agricultural sector is not just dependent on EU subsidies and, of course, migrant labour. An estimated 70% of the country’s £13.8bn in food exports goes to the EU. The proportion of the £36.2bn in food imports coming in the other direction from the EU to the UK is much higher, at almost 80%.
Chris Grayling, the embattled Transport Secretary and arch-Brexiteer, has suggested this should be no problem: we can simply grow more food to fill a gap left by fewer imports. Dream on.
This will be no easy task for a country so dependent on imported food from Europe, notably veg and fruit from Spain. Figures from the National Farmers’ Union show that self-sufficiency in the foodstuffs we’re capable of growing is now just over 60% – down by a fifth since 1980. It has argued that inadequate productivity and under-investment in research and development has placed the country behind mainland Europe. That is a major challenge for the government, barely addressed.
Grayling and Gove might outwardly appear relaxed about falling onto World Trade Organisation rules in the event of a hard Brexit. But that could be disastrous for farmers – and for the country.
Warnings of food shortages are not over the top. And the consequences for farmers, dependent on EU export markets, would be dire. For instance, lamb and beef exports to the EU would face tariffs of 51 and 87% respectively. Many hill farmers would go out of business.
A hard Brexit would almost certainly mean other domestic farmers ramping up production, regardless of the environmental cost, to match cheaper imports from – say – South America, Australia, New Zealand and, maybe, the USA where standards are sometimes below those in the UK.
That, in turn, raises questions about the effectiveness of Gove’s much-vaunted ‘new environmentalism’ – which has been welcomed by countryside groups, such as the National Trust.
At the sharp end, down on the pastures, they are certainly worried. On their 1,600 acre (650 hectare) organic upland farm, Simon Bainbridge and his wife Claire are busy trying to offset the impact of Brexit by diversifying into new territory: poultry.
The 12,000 free-range hens, pecking happily in the couple’s newly-planted woodland in mid-Northumberland, are an effective insurance policy against a hard Brexit. They produce 75,000 eggs weekly.
The couple took out a hefty loan to fund the new enterprise – “taking on more risk to spread our risk,” explains Claire – which now accounts for 50% of turnover, supplementing incomes from 1,500 breeding ewes and 150 suckler cows. Oats, and other organic crops and grasses, provide the feed.
“I am concerned for other farmers who don’t have the same scale and scope to make the changes as ourselves,” says Claire. “We can borrow against the [value of] land, but if you are a tenant you don’t have that capacity... Brexit has certainly sharpened the mind... we would certainly not make a profit without subsidy.” EU funds currently account for around 36% of their funding.
In an industry where many farmers are well into middle-age, Simon and Claire – 45 and 43 respectively – are the exception as relatively young landowner-farmers, although around 40% of their operation is rented from the National Trust.
Could they survive without CAP? “No, no,” responds Simon. “Our big spend is on servicing our borrowing and rent (for the leased land). And our (CAP) support goes straight back to the mortgage and to the (National Trust) landlord.”
George Dunn, chief executive of the Tenant Farmers Association, says that while the CAP might be a blunt instrument, simply removing it “will drive farmers to produce more intensively” – with all the consequences that will have for the environment, through the increased use of
chemicals and pesticides to increase production. Bang goes Gove’s brave new world.
Simon Bainbridge, a strong Remainer in the 2016 referendum – who publicly debated with his Brexiteering local Conservative MP Anne-Marie Trevelyan – is similarly uneasy about Gove’s agenda for his farm. Currently, it ticks all the right bio-diversity boxes, with four miles of new hedgerows, to encourage wildlife, and 20 acres devoted to wild flowers. But he fears that the prospect of new trade deals with non-EU countries would undermine all the strides many farmers have taken to improve the natural environment.
Peter Hetherington is the author of Whose Land is Our Land? – The Use and Abuse of Britain’s forgotten acres