Our new secretary of state at DEFRA, Michael Gove, says that after 2022 farmers will have to “earn” their subsidies rather than just have them “handed out.”
It would be very easy to take umbrage at these comments and suggest that farmers are already “earning” their living, but the DEFRA secretary does have a point in that the current basic payment scheme (BPS) pays farmers a subsidy for each acre they farm regardless of whether they produce any food on that acre or not.
It’s always struck me that the BPS is madness. It simply drives up land prices and rents without rewarding farmers for producing food, so I’d welcome a new British agricultural policy (BAP) that rewarded farmers not for what land they occupy but for what food they grow.
But that does not appear to be what Mr Gove has in mind. He envisages a BAP that will create a “green Brexit.” Rather than introducing new subsidies to encourage farmers to produce food and help reverse Britain’s ever growing food trade deficit, he instead envisages subsidies that “recast how we care for our land, our rivers and our seas, how we recast our ambition for our country’s environment and the planet.” Note that increasing UK food production doesn’t get a mention.
Quite how Mr Gove proposes to improve environmental protection is hard to imagine given existing levels of regulation provided by European Union directives and the common agricultural policy. There are EU directives protecting water, soil and air, and the cross compliance regulations attached to the BPS are, as all farmers know, very strict.
If we break these rules we risk losing all of our subsidy payments, and if we are persistent offenders we risk heavy fines and being ruled out of all subsidy payments indefinitely. The EU currently even contributes half of the £500 million a year currently paid to Britain’s farmers to carry out conservation measures under countryside stewardship agreements – so called agri environmental payments.
So what I’d like to see from Mr Gove is less populist talk about re casting “our ambition for our country’s environment” and more talk about re casting our ambition for food production. This could take many forms including capital grants to invest in buildings and machinery, headage payments to keep livestock, guaranteed prices for grain, and the introduction of trade tariffs to make sure that imported food does not undercut the food prices which British farmers need to make a profit.
Unless Mr Gove introduces such measures we face a real possibility that UK food production could collapse after 2022 once the BPS is abolished. Most farmers are currently losing money on all of the food they produce and are simply using the BPS to cover the gap between the cost of production and the price at the farm gate.
Given Mr Gove’s political beliefs and his advocacy of free trade, I’m not holding my breath. But let’s hope that in the end he can be convinced that farmers “earning” their living should be about them producing food.
