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Trade access and subsidies key for devolved nations as EU vote nears

Recent polls have suggested farmers in England are split when it comes to how they will vote in the Eu referendum on June 23, but is the feeling mutual in the other devolved countries?

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A recent report by the Yorkshire Agricultural Society (YAS) predicted Brexit would lead to a reignited debate over ‘level playing fields’ in the UK, with particular reference to agri-environment and rural development.

 

It said differentiation in agricultural policy and administration across the four territories could be expected to continue, and even increase – something which commentators from across the spectrum seemed to agree on.

 

YAS report authors said while the UK Treasury was unlikely to cut all spending in terms of direct payments – if only because these were hugely important to farmers in Northern Ireland, Scotland and Wales – a lower level could be expected.

 

The report said: “For the main elite political actors in Scotland, Wales and Northern Ireland, the economic implication of Brexit for the agri-food sectors is generally considered to be substantially adverse, notably in relation to funding, and a key element in the broader economic effects.

 

“The territorial aspect will act as a sort of limiting brake on the extent to which agricultural policy in the UK post-Brexit can be radically reconfigured.”

 


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Wales

Exports and subsidies have been two of the most divisive issues discussed at recent Brexit debates.


A net beneficiary of EU financial support under the Common Agricultural Policy (CAP), the Welsh farming industry receives more in EU funding than it contributes to the EU budget through taxation.


About 60,000 people are employed on holdings across Wales and the food and drink supply chain makes up about 18 per cent of the total Welsh workforce.


In addition, Hybu Cig Cymru statistics show about 35 per cent of sheepmeat and 13 per cent of beef produced in Wales was exported to the EU and further afield in 2014.

 

Value


Of this, about 90 per cent of sheepmeat and beef remained in the EU (excluding the UK market), putting the value of EU exports at £174 million.


Pro-Brexit campaigners have also highlighted the 500m potential customers which the 28 member states bring to the table – a vital market for UK producers.


Environment Secretary Liz Truss, who is campaigning for Britain to remain part of the EU, has suggested EU tariffs could add an additional £155m to the cost of lamb and mutton exports, making British lamb a less attractive prospect for Europeans compared to New Zealand and Australian produce.

 

Access


With British lamb still lacking access to the US and China markets, the EU is a particularly important export destination.


It is the combination of these threats which most industry representatives believe could be disastrous for Wales’ rural economy.


And, according to Farmers Union of Wales council member Brian Bowen, who runs 2,000 breeding ewes and about 150 suckler cows at Pencoedcae Farm, Princetown, Tredegar, South Wales, they provide too big a risk to ignore.


He said: “When we vote we need to remember the EU is the world’s largest agricultural trader. It offers the world’s largest agri-food markets, with exports exceeding €129 billion in 2015.

 

Expand


“The market for EU produce has continued to expand over the past few years and will continue to do so in the future. All of which has benefited the Welsh economy.


“Thanks to the EU, Welsh farmers now have access to markets in South Korea, Canada, Colombia, Singapore, and Vietnam.


“In total, farmers in Wales have the chance to capitalise on more than 50 trade agreements, which allow for agri-produce to be exported and imported without any red tape.”

Northern Ireland

Brexit poses a similar risk to farmers in Northern Ireland as in Scotland and Wales, with trade and subsidies often highlighted as key deciding factors.


More than 70 per cent of all European money distributed to Northern Ireland goes to Department of Agricultural and Rural Development.


As in Wales and Scotland, much uncertainty surrounds the question of whether the UK Treasury would replace these funds in the event of Brexit.

 

Uncertainty


Former NI Farming Minister Michelle O’Neill had told the Northern Ireland Assembly Brexit could be ‘disastrous’ for agriculture and rural development due to a reduction in support payments and EU market access.


It comes after one think-tank suggested poorer UK regions, such as Northern Ireland, would face greater economic uncertainty than richer regions if the UK voted to break away from the union.


The Sheffield Political Economy Research Institute, which collated statistics on the trade relationships between the four UK countries and the EU, found Northern Ireland, the North East and the South West appeared to be the most dependent on the ability of the UK to trade goods with relatively few restrictions with other EU countries.

Scotland

Duncan Pickard, Fife farmer –“ I object to the Remain camp continually saying that 65% of Net Farm Income comes from EU subsidies. It doesn’t. NFI is an index, not an actual amount. Many farms including our own are in profit even after deducting subsidy income.”

 

David Frost, Chief Executive of the Scotch Whisky Association – “The EU single market including its regulations on food and drink and its single trade policy are central to Scotch Whisky’s success. Whisky is worth £3.95bn to the UK balance of trade.

 

Ronnie Wilson, large scale dairy farmer , Dumfries and Galloway - “We are over-governed and nothing ever gets done. CAP Reform has been a disaster. We need a better way of subsidising farming. Deficiency payments would be great but it will never happen if we stay in the EU.”

 

Support

 

Phil Hogan , EU Farm Commissioner - I do support change but I cannot go further than this ( alterations to greening regulations) without secondary legislation. I have to decide within a couple of months whether or not to have a full mid-term review.

 

Stuart Howsden, Director of RSPB Scotland - We have a big interest in the CAP with 25,000 hectares of land under our control. I worry about deregulation if we leave the EU. There is already not enough protection of wildlife habitats.

 

Owen Paterson, former Defra Secretary of State - “No sane person would think about the three-crop rule, never mind write it down and then enact it.”

 

Ken Durston, Angus farmer to Owen Paterson - “ I hear what you say about the UK government keeping up farm subsidies. But what happened to the 230m euro of internal convergence money that should have come to Scotland. I am afraid I don’t trust you!”

 

Benefits

 

John Calder, grain merchant and chairman of Agricultural Industries Confederation , Scotland - AIC prepared a report and the conclusion was the benefits of staying in were apparent.

 

AIC’s board are reticent about giving a steer but it is unavoidable. There are too many imponderables on the leave side of the argument.”

 

Martin Cessford, Montrose, intensive arable farmer, haulier and fertiliser blender – “A Brexit would cause uncertainty over all of our businesses.

 

"The job is tough enough as it is without stepping in to a new set of regulations to please a new set of politicians. It would be better to carry on negotiating for a better deal within the EU.”

Join the debate: In or Out?

Join the debate: In or Out?

We asked the experts what their vision of farm support would be if they were given a blank canvas.

 

Join in the debate on Twitter and Facebook, as well as on FGInsight.com - should we stay or should we go?

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