The new Parliament could see the biggest changes to farm policy for decades. Farming is a small part of the UK economy, but farm policies matter. Many consumers want to buy food grown in the UK, and good farming practices can benefit the country’s landscape and natural environment. Leaving the EU means the UK could develop new policies to support farming, and future trade deals could change how farmers export food and compete with imports.
Time for a change to farm funding?
The EU’s Common Agricultural Policy (CAP) has shaped UK farm policy for decades. CAP subsidies aim to guarantee minimum levels of EU food production and give farmers a fair standard of living. UK farmers receive some £3 billion in CAP payments annually, with about 80% paid as direct payments based on how much land they farm. The remainder pays mainly for rural and environmental farm management schemes. Data shows many UK farms would not have made a profit without CAP support (see chart).
Some consider that the CAP offers poor value for money and has held back farm productivity and environmental improvements. Some also consider that the CAP system distributes payments unfairly, as 50% of UK funds go to 10% of farms, with the largest farms typically receiving the most.
Leaving the EU will mean the UK leaving the CAP. A new UK agricultural policy could offer new ways to support farmers. Detailed EU environmental, animal welfare and food rules (transposed into UK law after Brexit) also cover many aspects of farming. Future governments will have to decide how far the UK diverges from these rules, with possible impacts on how food is produced.
Remaining in the EU would also require change to UK farm policies, to a more limited extent. The EU is reforming CAP policies from 2021, aiming to give Member States more flexibility over delivery and to tackle environmental problems such as climate change more effectively.
What might change?
The Johnson Government’s Agriculture Bill proposed phasing out direct payments and instead paying farmers for providing ‘public goods’ (for example improving biodiversity or managing flood risk). Farmers and environmentalists welcomed this ‘Environmental Land Management’ approach, but farmers wanted food production to be eligible for support in its own right. This will be a key question for the new Parliament. The Bill did not complete its parliamentary stages before the General Election, but new legislation will be needed to allow farm payments if Brexit takes place.
The Welsh Government and officials in the Northern Ireland Executive have consulted on principles for future farm support using powers proposed in the Agriculture Bill. The Scottish Government declined the option of Scotland-specific provisions in the Agriculture Bill. It has announced an Agriculture (Retained EU Law and Data) (Scotland) Bill and proposes to keep farm support approaches largely the same until 2024.
Currently, the UK produces only about 61% of food consumed here. Farmers want to supply more of the UK’s food, and many consumers value UK products. Around 40% of people in a 2019 survey actively sought to buy local ingredients. At more than £22 billion a year, or 6% of total exports, agri-food products are a significant part of UK trade. The top agri-food exports in 2016 were whisky, salmon, cheese, wine and lamb. The EU is a major trading partner for the UK.
After Brexit, UK tariffs and trade policies on animal welfare and environmental standards could influence where food comes from, its cost and how it is produced. Trade deals will affect how much competition farmers face from imports. Conversely, future trade deals could provide new export opportunities. Maintaining protected food names, from Arbroath Smokies to Stilton cheese, will be key to reducing competition from imitation products.
Standards and regulation
Changing environmental, food, and animal welfare standards would be controversial. For example, there has been public concern that future trade deals could lower standards, allowing imports not normally permitted under EU rules, such as chlorine-washed chicken. The May/Johnson Governments said that trade deals would not lower food standards. The Conservative manifesto said that farming must enhance the environment as well as safeguard animal welfare. The Labour Party wanted the Agriculture Bill to include guarantees on standards in trade deals.
Decisions on supporting farming will need to be taken during the new Parliament. Decisions on food, environmental and animal welfare standards will also need to be made if new trading relationships are set up. Together, farm support and trade decisions could have far-reaching impacts on UK farmers and food consumers.
- Brexit: Trade issues for food and agriculture, House of Commons Library
Insights for the new Parliament
This article is part of our series of Insights for the new Parliament. This series covers a range of topics that will take centre stage in UK and international politics in the new Parliament.