British farmers face complex questions in 'Brexit' debate

The UK will hold a referendum on whether to remain in or leave the European Union possibly later this year.

The May 2015 Conservative election victory gave the UK Prime Minister, David Cameron, the mandate to seek reforms of the EU and then to put the resulting package to an In/Out referendum before the end of 2017 although there will be strong pressure for an early decision once the reform package is known.

The European Council meeting held a first substantive discussion on the four reform proposals that Cameron has put forward last December. It has agreed to try to reach agreement on these proposals at its next meeting in February. Tackling the entitlements of EU migrants to welfare benefits in their host country looks like the most difficult issue to resolve.

Public opinion in the UK appears evenly split on the issue, although a majority still indicate they would vote to stay 'In' if Cameron succeeds in getting a significant package of reforms and decides to campaign on this platform to remain in the EU.

UK withdrawal from the EU (or British exit, also called Brexit) would be a complex process given the role that EU legislation now plays in domestic legislation.

The EU Treaty provides for a period of two years once a country indicates that it intends to leave the Union to negotiate a withdrawal treaty.

This would set out the nature of the UK's future relationship with the EU particularly in the areas of trade, scientific cooperation, access to the single market and other issues.

At the same time, the UK would need to decide what policies it wanted to put in place at home in those areas where EU policies currently play an important role.

For UK farmers and the food industry, questions about future UK trade and agricultural policy in a Britain outside the EU are crucial.

The UK National Farmers' Union (NFU) has produced a useful briefing document on UK farming's relationship with the EU. The NFU has not taken a 'yes' or 'no' stance ahead of the renegotiation. It points out that a full evaluation of the benefits and disadvantages of EU membership for British farmers is impossible because there is no clarity on what arrangements would be available outside the EU or what kind of agricultural policy a British Government would pursue.

The EU currently contributes £2.9bn (€3.8bn) to the UK via the CAP and related subsidies, accounting for 55pc of total income from farming.

Owen Patterson, a former UK Minister of Agriculture and a leading member of the UK 'Leave' campaign, argued at the recent Oxford Farming Conference that the repatriation of the UK net budget contribution to the EU would allow a future British government to transfer at least as much funding to UK farmers as the CAP does now.

He also argued that regulation could be greatly simplified if the UK no longer had to follow a pan-European environmental policy with common rules across all 28 member countries.

The three-crop rule introduced as part of CAP greening is particularly unpopular in the UK.

Phil Hogan, EU Commissioner for Agriculture, at the same conference, emphasised how much the CAP had changed in a more market-oriented direction in recent years and his commitment to simplifying rules and regulations.

He pointed out that the more restrictive rules are often imposed by national governments rather than by the EU.

He highlighted the value of access to the EU market for the UK and the greater clout the UK had as part of the EU in negotiating international trade agreements.

Although economic arguments over whether UK farming would be better off inside or outside the UK will provide much of the detail of the forthcoming referendum debate, the outcome of the referendum will probably be decided more by the gut feelings voters have around the UK's position in the world.

Alan Matthews is Professor Emeritus of European Agricultural Policy at Trinity College Dublin.

Indo Farming