The UK Government will face significant challenges in its attempts to ‘take back control’ of farming legislation once the country leaves the European Union, an expert on trade regulation has warned.
Fiona Smith, University of Leeds professor of international economic law, said plans to maintain subsidy levels and redirect payments towards the delivery of public goods are likely to come under pressure from World Trade Organisation (WTO) rules which aim to stop trade distortion.
Speaking at the N8 Agrifood Conference in Liverpool last week, Prof Smith said as an EU member state, the UK had been insulated by WTO rules which dictate the size of subsidies and how they are paid.
But as of March 29 next year, it will become an independent WTO member – putting it at the mercy of international rules around trade.
This could have direct implications for the Government’s farm policy proposals, particularly the maintenance of support until 2022 and directing payments towards public goods.
Prof Smith said under WTO rules, developed countries can only pay direct support to farmers to a maximum 5 per cent of its total value of agricultural production.
While the EU holds an exemption to the rule allowing it to pay farmers above the threshold, the UK would no longer enjoy the same protection, meaning it may not be able to maintain current payment levels after 29 March 2019.
Greening payments and support for public goods could also be viewed by the WTO as trade distortion.
“Under WTO rules, environmental subsidies can be part of a conservation scheme, but cannot be used to have an effect on production,” she told delegates.
“If you create welfare regulation which incentivises livestock farmers to change production methods, you cannot do that under WTO rules.”
Subsidising producers to farm in a particular way could also be tricky as the WTO does not allow products to be discriminated against for the way they are produced — potentially reigniting the debate over cheap chlorinated chicken entering the UK.
“If the Government moves forward with its high welfare, niche grant approach, it has to be the farmer’s choice and not through regulation,” she said.