21 Aug 2018
Public money for public goods scheme open to challenge at WTO
Defra’s public money for public goods scheme could be open to challenge from other countries at the World Trade Organisation (WTO), according to two industry experts.
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Academics have previously raised concerns payment for public goods could be viewed as trade distorting and warned rewarding farmers for producing in a particular way, for example by improving animal welfare, could be tricky as the WTO does not allow discrimination between products based on production method.
Defra Ministers have repeatedly said they believe there is enough flexibility in existing WTO rules to allow the new scheme to go ahead, but AHDB chief strategy officer Tom Hind warned other countries may disagree.
Speaking at an online Westminster Food and Nutrition Forum event this week, he said: “From our point of view, we may think the Environmental Land Management Scheme is not trade distorting, it is about public money for public goods, and that is fine.
“But that does not necessarily mean to say it will not be subject to challenge.”
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NFU Brexit and international trade director Nick von Westenholz went on to claim the UK would not have an ‘open wallet’ to spend what it likes on any post-Brexit schemes.
“There will be discussions at an international level on how far and wide the UK Government can go in terms of providing what is under trade law subsidies to its farmers,” he said.
But Tom Lancaster, acting head of land, seas and climate policy at the RSPB, suggested the biggest influence over future payments would be the Treasury, not WTO rules.
He said: “The Basic Payment Scheme [BPS] is fairly unprecedented in terms of support as pure profit.
“There is very little cost involved and it does not provide good value for money, so something which provides better value for money will require more from farmers than BPS does, and that is only right when we are looking ahead to what is likely to be one of the biggest recessions in history and a tight public spending squeeze.”
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