Research group and farm consultancy ADAS has set out likely scenarios for changes in agriculture post-Brexit.

In recent weeks stakeholder groups including the Tenant Farmers Association and Landworkers Alliance have set out their visions for farming in an independent Britain, and although spending on farm support and research have been guaranteed until 2020 by the Chancellor, civil society groups have called for sweeping changes in the farm spending regime. In ADAS’ short report, head of policy and economics John Elliott looks at the likely outcomes of Britain’s withdrawal from Europe in the short report, which is available here.

Looking first at changes that occurred whilst Britain was a member of the EU, ADAS’ Elliott notes that the effects of a shift to area-based direct payments and funds available for environmental land management under Pillar 2 of the CAP have had two major impacts; “firstly a reduction in the incentive to increase food production per se, and secondly a blunting of the economic need to farm for profit,” which he says, “Is evident in the modest productivity performance of the sector over recent decades relative to other countries and in the falling self-sufficiency of UK food production.”

ADAS’ rapportuer says that, broadly speaking, funding for Rural Development under Pillar 2 of the Common Agriculture Policy has been targeted in three main areas (increasing competitiveness through advice and grants, improving the environment through agri-environment schemes and boosting the rural economy, including through farm diversification). Though the consultancy boss believes these have been broadly successful, ADAS research findings suggest that funding for agri-environment schemes needs to be increased threefold.

Looking to area-based payments under Pillar 1 of the CAP,the paper notes that research has shown most UK farming sectors would not be profitable without direct payments, but there are still question-marks around these pay-outs. Though stipulations were introduced in 2005 and 2015 to ensure that farming meets certain minimum standards (cross-compliance) and that funds go to ‘active farmers’, Elliott notes that “Very few farmers do not quality for direct payments and they effectively act as income support for landowners and managers… there is no upper threshold on payments and the larger the land holding the greater the subsidy.”

So what now?

According to expert analysis and the results of modelling work carried out by ADAS, either changes in trade laws that exposed UK farmers to cheaper imports or a reduction in subsidy payments would likely spur on production as farmers try to restore commercial viability, but in effect the impacts of these major changes would be felt differently across different sectors, inevitably leading to some farms going bust. Without government intervention this could result in farm sizes increasing and ownership consolidating further - flying in the face of most farm and civil society groups’ demands for a more diverse farming sector and help for new entrants.

Elliott maintains that the future of agriculture is uncertain. The ADAS head of policy notes that, with agriculture currently accounting for 40% of the entire EU budget, any change in spending is likely to be felt. Leave campaigners have pointed out that - on the face of it - the UK contributes more than it receives in farm spending, but Lords discussing the impacts of Brexit on farming late last month noted that “Those who campaigned for Brexit have already committed our repatriated EU payments several times over,” and that farmers would have a difficult job arguing their case for income support over increased spending on the NHS, for example.

Although from a farmers’ perspective, Elliott believes some could benefit from access to technologies - including, he says, access to GM crops - and improved competitiveness as a result of shifts in trade and funding, he notes that “Any expectation on the part of UK farmers that regulations will be watered-down or removed is likely to lead to disappointment.”

As the possible policy outcomes of Britain’s withdrawal are so wide open, consumers could (in this scenario of deregulation and improved access to techno-fixes) become unhappy as a result of lax political commitments to environmental protection or animal welfare. Food imports from the EU could also become more expensive, potentially benefitting farmers, but another blow to consumers, and a sobering prospect with food poverty at record highs and rising in the UK.

However, NGOs like the National Trust may manage to influence policy, in which case farm support could be continued but linked to conditions on environmental performance, leading to a boost in conservation work and possibly less concentration of farm ownership.

ADAS’ Elliott underlined that the one thing that is certain is that Britons can’t look back to the past for clues about what will happen next. Given the changes in the last four decades, there is no hope of a return to a ‘simpler time’ that some Brexiteers desire. The ADAS policy head said that, even assuming some level of farm support is continued after 2020, the biggest threats to farm businesses are likely to be cheaper food imports entering the country as a result of trade deals. The short paper concludes, “A look back in time could be misleading as the rest of the world has changed much more than we have in the relatively protected European policy environment, which has been so supportive of agriculture.”

The short paper Post-Brexit agricultural policy – a case of déjà vu? can be read here.