Michael Gove’s Green Brexit – will farmers lose out?

Secretary of State for the Environment, Food and Rural Affairs Michael Gove is ringing in the new year with an estimated £10 billion Government U-turn on farming subsidies, which will see the basic payments made per acre to farmers (BPS) under the European Union’s common agricultural policy (CAP) continue during a transition period after Britain’s exit from the EU.

In his speech to the Oxford Farming Conference on Thursday last week, Gove outlined his vision for the future of farming and agricultural policy in the UK. Striking an optimistic tone, he described a “Green Brexit” – with sustainability, public health and the environment at its heart, along with a promise to  boost the competitiveness of British farming.

He announced that, following a transition period, BPS payments will be replaced by a new system, which will support farmers not according to the size of their land, but dependent on their contribution to (not yet closer defined) “public goods” and the environment. Examples include “planting woodland, providing new habitats for wildlife or “returning cultivated land to wild flower meadows.”

Although some lack of clarity on concrete policy proposals prevails, farmers, food manufacturers and consumers will welcome Gove’s interdisciplinary approach of looking at the whole food supply chain – from farm to fork – aiming to take into consideration business interests, the environment, health and trade when formulating new agricultural policy for Britain after Brexit.  Stakeholders will also have the opportunity to clarify some of these issues later this year in a consultation, which will open following the publication of a Government White Paper on the future of farming after Brexit later this spring.

Gove has presented ambitious plans to create a modern, sustainable farming industry, helped by automation and digital technologies paired with a PR boost for locally produced British foods. But the Government appears to be aware that, at least for some farmers, it could be curtains when the stream of EU funding eventually dries up.  Gove therefore also mentioned that the Government is looking into ways to support farmers who may chose to leave the industry after Brexit.

But Gove’s speech leaves too many questions on devolution unanswered to put minds at ease. His guarantees to continue BPS payments for a transitional period after Brexit in England – with no mention of Scotland, Wales or Northern Ireland – might raise eyebrows in the devolved nations. Scottish and Welsh policymakers and farmers have previously articulated fears to miss out on vital funds after Britain leaves the EU.

Current estimates suggest that EU funds account for an average of 81% net farm profit in Wales. The Welsh Assembly’s climate change, environment and rural affairs committee has urged Westminster to not subject agricultural funding to the Barnett formula used by the Treasury in the United Kingdom to automatically adjust the amounts of public expenditure allocated to Northern Ireland, Scotland and Wales – but rather hand the money straight to the devolved institutions. In Scotland, First Minister Nicola Sturgeon also expressed concerns that the Government might use Brexit as an opportunity to take back control of agriculture, fisheries and environmental policies – these powers are de facto devolved to the Scottish Parliament, but have been controlled by Brussels ever since Britain joined the European Economic Community more than four decades ago.

Clearly, there is still a lot to play for when it comes to Britain’s future food policy after Brexit. If you are interested in discussing the potential impact Brexit could have on your business and how to best influence government policy, please do not hesitate to contact The Whitehouse Consultancy’s EU team. Our consultants are experts in EU and UK food policy, with a wide network of stakeholders in Brussels and Westminster. Our team is experienced in driving policy change on food standards, labelling issues, market access and trade and can assist you with drafting a consultation response.