Paul Brannen, MEP for the North East and Labour’s EU agriculture spokesman, warns farmers the UK’s agriculture budget could be slashed by at least 10 per cent as early as 2021.
Brexit is set to bring an array of changes to the farming world, particularly with regards to funding, which will be allocated differently after we leave the EU. Farmers need to be prepared for the fact that there is going to be less money.
Currently, and up to the end of 2020, UK farmers will receive £3bn of subsidy per year. Until March 2019 this money will come to them via the EU Common Agricultural Policy (CAP) as the UK will still be a member.
From April 2019 until the end of 2020, this money will be paid to farmers by the UK Government, and the criteria by which the UK Government will allocate money to UK farmers will be the same criteria as the CAP.
From the beginning of 2021, it will be a UK Government decision as to how we fund UK farmers, with the approach being public funds for public benefit.
At the same time, 2021, the EU will put in place a new CAP subsidy regime which will be at least 10 per cent smaller than the existing level of subsidy. Why? Because as the UK – a net contributor to the EU money pot – leaves, the EU will face an overall reduction in income of over 10 per cent.
In theory, the budget gap caused by Brexit could be filled by the remaining EU27 increasing their contributions, but in reality this isn’t very probable. So most, if not all, budget headings including the CAP will be cut.
This cut in real terms to the CAP for farmers in the EU27 will then be replicated by the UK Government in relation to UK farmers. Why do these budget cuts need to mirror each other? There are two reasons.
First of all, a Conservative Government could use the resulting savings to deliver tax cuts and/or reduce the deficit. On the other hand, a Labour Government could use it to fund manifesto commitments around health, education, transport etc.
If money is short, why should we give it to farmers when people are waiting in NHS hospital corridors for medical treatment? It is an easy argument.
Secondly, a UK Government delivering a higher level of subsidy to UK farmers than that received by EU farmers would be accused, and rightly so, of unfair competition by the EU.
This would be seen by EU farmers as not a level playing field, and as a result UK farm produce would likely be denied access to our largest market, the EU.
The Conservative Government hasn’t yet been honest with our farmers about there being significantly less money after the Brexit transition period, but as the clock ticks down to Brexit, the UK farming sector must prepare itself for at least 10 per cent less funding.