By Steven Thomson, Scottish Rural College Uni
IT is the French our own farming communities in Scotland and across the UK should thank for the level of financial support they receive.
Most people know the image of the French farmer in a dispute. They are a powerful lobby and make their voice known. In this country payments to farmers are much more of a hot potato so it has been political pressure from France and others that has guaranteed the continuation of the current level of CAP payments to farmers.
It has been the French who, in the face of voices within the EU wanting CAP budgets cut, have brokered the deal.
Brexit will certainly be the biggest upheaval in Scottish farming life since we joined the EU a generation or two ago. What a lot of people have maybe missed is that it’s the EU which sets most of the rules around agriculture, food safety and the environment.
It's been easy to say, 'well that's a decision made in Europe'. Suddenly it isn't Europe anymore and it's the UK Government which will be supporting the sector going forward. And they will need to justify payments to the British taxpayer, often sceptical taxpayers and a press quick to criticise the support system particularly when the outcomes delivered are often not obvious to the general onlooker.
Beyond Brexit: Cheap imports pose critical threat to Scotland's food sector
There is a good case to be made but any farmers still regarding their payments as a right need to realise that things may well change going forward and maintaining public support will be essential. They should be looking hard at their business, paying attention to the messages and considering the options.
There is often low profitability in farming. Roughly around £600million goes into Scottish agriculture by way of subsidy. But it generates about around £3 billion in outputs. That may not seem a huge number but they are spending about £2.8 billion which stimulates the rural economy, from the machinery, feed and fertiliser suppliers to those providing the fuel to the builders who erect and fix buildings. This goes way beyond just agriculture, and how we come out of the negotiations could impact on Scotland’s important food and drink sector. Many farming communities the length and breadth of Scotland will be affected by any change in the support regime, and will therefore be paying close attention to developments.
Beyond Brexit: Cheap imports pose critical threat to Scotland's food sector
Whatever we get, and that's a big whatever, is subject to change. The Tory Government has promised to maintain current CAP spending levels to the end of this parliament. How long will that be? I get worried when people talk about a Barnett-style formula to replace how European payments are made as that bears no relation to agricultural production, which forms the basis of how the budget is split between the regions. New support budgets should not be based on the number of people living in Scotland rather they need to be relate to agricultural activity and be flexible enough to support the wide range of farming systems we have in Scotland.
At the same time there is uncertainty over some devolved powers, including farming and the environment, and whether they will go back to Westminster post Brexit. Agricultural products are subject to high import tariffs in the EU as an attempt to protect domestic markets. If we have to pay these tariffs to get into the EU markets our sheep meat industry may be left scratching their heads. Scotland exports a lot to France and could face tariffs of 60 per cent and those exports would likely dry up as the sheep sector can’t absorb that level of tax.
And it’s not just about saying to the World Trade Organisation 'let’s have fresh trade agreements'. How we choose to support agriculture will be very important and this could severely affect our trading position if others think we are not playing by the rules. In order to get a deal with, say, the US, they will want to look at how we pay our farmers and they could view that as trade-distorting. People also tend to forget that once we get into trade deals with other countries, WTO rules mean these deals will be about most of what we trade, and not just one or two agricultural products.
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