DEPARTMENT for Environment, Food and Rural Affairs Secretary Liz Truss confirmed at the Oxford Farming Conference that the Government has no "Plan B" to support British agriculture in the event that the UK leaves the EU following the promised referendum.
That prompted me to ask if Cabinet Secretary Richard Lochhead is working on his own "Plan B". A Scottish Government spokeswoman said: "Common Agricultural Policy (CAP) direct payments are crucial for the future viability of Scottish farming, something the UK Government often fails to recognise. Exit from the EU would pose a direct threat to jobs, investment and international influence. That is why the Scottish Government is determined to do all we can to secure a vote which keeps Scotland and the rest of the UK in the EU, and protect the benefits we all derive from our place in Europe."
That's a log-winded way of saying that there is no Scottish "Plan B". It also strikes me that the governments in both Westminster and Holyrood are using the threat of losing CAP support payments as a way of coercing those engaged in agriculture and the food and drink industry to vote for staying in the EU.
Allan Bowie, NFU Scotland President articulated the concerns of many farmers when he said: "At this time we know what membership of the EU entails, but we don't know what would be the impact of being outside the EU since we do not know the relationship the UK would have, nor the conditions under which our farmers would be expected to operate if we chose to leave the EU.
"Before the vote we are looking for a clear business case that will clarify the headline issues for Scottish farmers."
Farmers claim they would prefer to farm without the financial support they receive from the EU, but the reality is that they don't make enough from the market for this to be possible. The CAP helps to address the failure of the market to provide a fair reward for what farmers produce. Guarantees on what would replace EU financial support will be critical in determining a "yes" or "no" stance.
In the case of Brexit, how would the food production support system we have in the form of the CAP be replicated?
Would it be possible to maintain access to markets that we enjoy via the EU single market? What will be the impact on Scotland's food and drinks exports, which were worth £5.1bn in 2014?
According to a recent report by independent specialist consultants Agra Europe, Britain's food-processing industry is surprisingly big, and 60 per cent of its exports go to the EU. These could face a tariff of 48 per cent on average processed dairy products (assuming UK falls back on Most Favoured Nation status), 22 per cent for animal and livestock products, 21.6 per cent for sugars and confectionary, 18 per cent for cereals and 14 per cent for beverages.
The UK hosts the headquarters of 17 of the world's 100 biggest food and beverage conglomerates, more than Germany, France, Switzerland and the Netherlands put together. Some would be tempted to leave, chiefly for dual taxation reasons.
EU Agriculture Commissioner Phil Hogan gave delegates at the Oxford Farming Conference the following hard economic facts. Britain's rural economy is worth £200bn a year. The whole food chain employs one in eight people at work and contributes more than £100bn to the economy per annum.
According to Mr Hogan: "In the face of many challenges, British agriculture has proven itself resilient. Food businesses actually expanded throughout the recent recession, creating more than 200,000 jobs over the past four years. The food and drink sector, of course, remains Britain's largest manufacturing industry, larger than the aerospace and automotive sectors put together."
The Commissioner went on to point out: "The CAP is a legally binding contract between the EU and farmers up to 2020, under the Multiannual Financial Framework. The CAP heading cannot be cut by the Commission or any government during this period. However, outside the EU, agricultural spending would be subject to the same annual review by the British Treasury as any other department - can famers compete with doctors, nurses and schools in such a review? "This is especially relevant in light of the fact that the Defra budget is already down a third since 2010, whilst other departments such as Health, Education, Defence and Overseas Aid are ring-fenced from cuts."
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