Farm Ireland
Independent.ie

Tuesday 16 January 2018

Analysis: Britain's forgotten farmers face uphill struggle to be heard amid Brexit babel

 

Agricultural consultant, Mike Brady.
Agricultural consultant, Mike Brady.

Mike Brady

I have just spent two weeks travelling the magnificent UK countryside as part of the Nuffield International Triennial Conference.

The conference theme 'Small island, big ideas' is a very good description of the British psyche both in agriculture and as a very proud sovereign nation.

However, it does not take long for the underlying political uncertainly, even chaos caused by Brexit and the recent general election to surface to the top of every debate.

Simply put, nobody has any idea what will to happen to Britain and British agriculture into the future.

It is important to state from the outset that agriculture and food is a very small part of the Brexit debate in the UK, in fact agriculture and food was all but forgotten about in the recent general election debate and in reality, it has little if any political clout.

This lack of political influence for the industry results from a history of implementing a 'cheap food policy' which when one stands back and looks at the macro-economic picture of a nation with 65 million people and just 214,000 farmers, it really is no big surprise - it is the political reality.

The average holding in the UK is almost 350 acres, however, it is the magnificent large estates regularly measuring up to 5,000 acres in size that form the bedrock of British farming.

In Ireland, we can only dream of such scale as we flirt with tax incentives for partnerships and long-term leasing to try and increase the size of our farm holdings.

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However, on-the-ground experience from these grand farm units is that the annual net profit is no longer coming from the traditional farming enterprises of dairy, beef, sheep or arable but instead from alternative uses such as house rentals, commercial unit lettings of former grain and potato stores and a host of other non-traditional farming activities.

Of course, the EU Basic Payment Scheme and the myriad of environmental schemes are also a huge source of annual income. Many of these estates have lost their heart and soul created by the traditional mixed farming activity of crops and livestock, all centred around the grand period mansion and wonderful cut-stone outbuildings.

Instead, they have become a cold group of companies and businesses ranked by return on capital and various other financial metrics.

Post-Brexit, one has to question if the poor return on capital from the land farmed in these estates will cause the number crunchers to recommend selling the land to invest in more lucrative ventures elsewhere in the world? This could be the beginning of the end for large English estates.

The Brexit exit negotiations are scheduled to conclude by March 2019. There are four overlapping sets of negotiations that affect agriculture in this process:

Regulation

There are many EU regulations which must be incorporated into British law or scrapped altogether. The big question is how will this impact the British people? Is it a big opportunity for a new start?

These are all fascinating questions but they will take many years to answer.

People

The free movement of people is one of the four freedoms of the European Union. There are 130,000 non-British people employed in agriculture in the UK, but there are many more in other industries. This is a huge concern from many businesses in the UK. Who is going to do the work the locals will not do?

Trade

The UK is a net importer of food, being only 60pc self-sufficient. Trade and importation of food has always been part of the British economy.

The agricultural industry imports a lot of raw materials from Europe, which is a worry for farmers, but the big worry is tariff wars. The farmers are worried about zero-tariff imports of food, as a trade-off for British exports. This is a genuine worry with the lack of political influence in the industry.

Policy

The EU Common Agricultural Policy and its generous payments to large UK farms is the great big paradox of Brexit. Many farmers openly state their opinion that it is better for them that EU subsides go so that they are free to farm.

Yet they claim that the government in Westminster will replace EU subsidies with a British equivalent, heavily linked to environmental measures. The big worry is that if Britain spins into an economic recession, will Westminster honour its promise or scrap agricultural subsidies altogether?

The British agricultural industry is calculating and speculating on the likely impact of Brexit, but as a show of hands after a discussion at the Nuffield Triennial demonstrated, they are split 50:50 as to whether it will be good or bad for their industry.

Indecision is the mother of all evils.

Mike Brady is an agricultural consultant and land agent based in Cork. email: mike@bradygroup.ie

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