Post-Brexit, No One Really Knows What to Do About Subsidies for Farmers

The UK Government now has to conjure an alternative to the fantastically complex, Europe-wide Common Agricultural Policy that paid this country’s farmers £2.8 billion in 2015 alone.

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Aug 12 2016, 3:52pm

Radical writer George Monbiot called them "the strongest of all arguments" for Britain quitting the EU. New prime minister Theresa May, with a twist of the knife, gave the job of their reform to a recently crushed rival. And, last year, they paid the Queen—more precisely, a business she owns—almost £220,000.

Farm subsidies sound unimaginably boring, but in that dullness lurks danger.

Following the Brexit vote, the UK Government now has to conjure an alternative to the fantastically complex, Europe-wide Common Agricultural Policy (best known as CAP or "Cap"), that paid this country's farmers £2.8 billion in 2015 alone. That task will change the food we eat, the water we drink, and the birds, bees, and scenery of our green and pleasant land.

But no one much cared until the boss of the National Trust, the iconic conservation charity, stood up last week to make a speech.

"The subsidy system is broken," said its director general Dame Helen Ghosh, speaking at Blenheim Palace, the grand pile where Churchill was born. "Farmers are going out of business. The state of wildlife is in steep decline and large parts of that is because of intensive agriculture."

Dan Burdett's dairy farm in West Sussex. All photos by the author.

Ghosh wanted farmers to be paid only for "public goods" like protecting wildlife, water, and soil—not just for growing food. The current system, with the exception of opt-in environmental schemes, pays out on the basis of size: the bigger the farm, the bigger the subsidy.

So, can we just scrap farm subsidies? Can we force farmers, through the law, to look after the landscape, so this wasteful cash can be spent elsewhere?

Outside the urban bubble, the answer is not so simple.

I drive an hour south of London to Dan Burdett's dairy farm in West Sussex. Across the road from the farmhouse, his 240 cows munch on deep green grass so thick it cushions our feet as we walk through the field. Talking to him, the subsidy debate's black-and-white divisions—between intensive and sustainable, profit-minded and traditional—become blurry. His farm is organic, so doesn't use chemicals and fertilisers, and is also hooked on improving the land beneath our boots.

"If you've got really good farmers looking after their soils and they are growing double the amount of grass or cereals, or having less disease pressure, it should be a win-win for them," he says.

READ MORE: We Asked UK Farmers What Leaving the European Union Would Mean for British Food

Burdett calls his subsidy a "nice-to-have" but not a "must-have," but worries about an unfair advantage for other EU farmers, if support is cut off in Britain.

He doesn't think the current system is perfect, though: "It is stifling innovation. There are too many farmers all doing what their granddad did. If they own the farm and they get the subsidy, then they are doing alright. They are not being pushed."

Right now, a wide slice of UK food producers desperately need that EU money. In 2015, British farmers earned £3.8 billion in total. Their subsidies were worth 74 percent of that figure.

Farmers' reliance depends on what they grow: the average English beef, sheep, or cereals farmer made a heavy loss from farming in 2014/15, needing subsidy to keep afloat, while dairy men and women made a healthier living.

Put plainly, thousands of farmers would be out of business if those funds dried up.

On the phone from Somerset, James Small, who grazes cattle and sheep over 600 acres, tells me the industry is working towards an unsupported future, but a sudden removal would be a huge shock.

"It would cause immense devastation within some sectors," he says.

Dairy farmer Dan Burdett

Such fears are hard to square with some gross inequalities. Across Europe, the biggest fifth of landowners receive about 80 percent of the CAP pot.

In the UK, about 48 recipients are paid more than £500,000 each in direct aid alone (with environmental cash, the totals are higher). Many of those look after lots of land—Ghosh's National Trust took £2.7 million in 2015—but the biggest earner was a single company, which picked up just short of £3 million last year. Suddenly, £218,000 for the Queen's royal farms at Windsor is loose change.

Most farmers aren't so lucky. A typical cereals farm gets £37,000, a dairy £25,000, and someone grazing sheep on a hillside £18,000, before any "agri-environment" schemes.

Because of the gap, there's a push for subsidies, in post-Brexit Britain, to be fairer and more meritocratic.

The National Farmers Union has launched its lobbying efforts with its so-called "biggest consultation in a generation." It wants a simpler system that focuses on "enhancing our competitiveness."

For Rob Harrison, who milks 240 cows in Gloucestershire, that vague phrase means nudging farmers to get better. He wants a move towards tax reliefs, grants for buildings and machinery, and help for younger people, who can't buy or rent, to get started.

"I don't think the status quo will carry on," Harrison tells me.

Hunting that business edge, farmers often look to New Zealand for inspiration. There, subsidies were stripped back in the 1980s and, today, are effectively non-existent. The number of dairy herds and sheep flocks has plunged, but those remaining have become bigger, more streamlined, and more productive.

This could help the British public, according to the Adam Smith Institute, a free market think tank. In a report this summer, it called for farm subsidies and import tariffs to be scrapped. Then, the argument goes, the best businesses would survive and the UK would specialise in certain food and import the rest, from wherever it is grown most efficiently.

"Cheaper food is good for everybody and particularly people on lower incomes," says Sam Bowman, the institute's executive director. "The question is whether we are happy with a policy that drives up prices in order to protect a very small portion of the economy and a very small number of people."

How small is "small"? UK agriculture employs 480,000 people and was worth only 0.6 percent of GDP in 2014. But the whole food industry, from farm to fork, provided 3.9 million jobs and 7.3 percent of the nation's output.

And food prices have fallen, even inside the EU regime. A British household now spends 11 percent of their income on food. In the 1950s, it was roughly a third.

This debate, it seems, is about priorities. It is about whether we keep family-run farms in business, whether 61 percent self-sufficiency in food worries us, whether we care our depleted soils can cope with just 100 more harvests, or whether we want plentiful, cheap grub, whatever the wider costs.

If we look to the past, such tough choices aren't new. After World War II, the British Government believed a stable, home-grown food supply was in the national interest. So, officials fixed prices to guarantee farmers a return.

Harvesting on the South Downs.

In 1973, when the UK joined Europe, it also joined the CAP. The bulky programme had political origins (historian Tony Judt called the payouts a sop to peasants who previously voted for fascist dictators) but it was also about production.

With the recent memory of wartime shortages, farmers were paid to churn out more milk, rear more meat, and grow more grain. By the 1980s, that caused great gluts, with wine lakes and butter mountains, which prompted a switch towards environmental incentives.

Today, some of farmers' payments depend on "greening" measures, such as growing multiple crops, keeping some land as permanent grass and carving out an "ecological focus area." There's also a long list of basic standards farmers must meet, from animal welfare to keeping rivers free of chemicals and slurry.

Despite those moves, Professor Ralph Early, a food expert from Harper Adams University, thinks the CAP originally pushed farmers down a dangerous road, encouraged by some Governments, and mega agri-corporations.

"The agriculture policy for Europe for many years encouraged intensification," Early says. "It was all about big is beautiful, but that ideology is not compatible with the cyclical processes of nature."

Food has become too cheap, Early adds, and does not take in the true costs to farmland or the environment. And, if subsidies go, he doesn't see New Zealand as the model for Britain's future, but the USA.

"The worry is that many smaller farms will go to the wall with agriculture transitioning towards unsubsidised, large farms operated with a productionist mindset and negative consequences for the environment and food quality and nutrition," he says. "Or, alternatively, we have farmers who, in order to get public support for farming, will have to play by a set of [environmental] rules they do not like."

Crops, grass, and wildlide margins on the South Downs.

That public support will not be easily won.

The £3 billion bill could be sucked up by a belt-tightening Government, whose top concern is always the £117 billion-a-year National Health Service. And few non-farmers understand the point of subsidies, cloaked for so long in Eurocrat jargon and acronyms.

More fundamentally, more than four fifths of population live in towns and cities. They don't often bump into the people who would get this chunk of their taxpayer cash.

"The general public have got to remember that all this countryside does not look like that just by chance," says David Martyn, who rears sheep and grows crops in south west England. "If you left it to its own devices, it would soon go to rack and ruin."

But, there is good news: all these conflicting demands can sometimes work together.

Mixed farmer Annie Brown

Farmer Annie Brown on her South Downs farm.

About 15 miles south of Burdett's dairy, Annie Brown drives me up a steep chalk track in her old, white Land Rover. On the way, we pass gangs of ramblers hiking the South Downs way—her 1,400-acre farm is inside a national park.

Once over the top, we roll into a vast barley field, just cut to stubble by the harvester. On the slopes surrounding us, fleshy beef cattle graze quietly. At 500 feet high, with a clear sky, we can see Brighton and the sea in the distance.

Brown tells me almost every acre is in some kind of stewardship, one of those subsidised, environmental schemes. The wide fields are edged and broken up by uncropped patches, lush with grass and flower mixes that draw birds, bugs, and butterflies. Flecks of cornflowers and poppies jump out from the dusty green.

Last year, Brown won the Silver Lapwing, a conservation prize for farmers, not just for restoring habitats, but for returning the land to productivity, after years of leaving the grassy slopes untouched. Now, two young families live off the farm's earnings, as well as the staff.

"If we are providing the habitats for pollinators, the life in there actually should, in theory, boost the yield of what we are growing on our commercial land," Brown says.

READ MORE: Why Mega Farms Might Not Always Be Bad for Animal Welfare

It's a check to comments made by Andrea Leadsom, picked by Theresa May as the UK's new environment secretary. In a pre-referendum debate, Leadsom said it would make sense "if those with the big fields do the sheep, and those with the hill farms do the butterflies."

Brown shows, with fair support for smart farming, it's possible to do many things with the land, at once.

"I don't think any farmer wants to just farm for subsidy," she says. "We are in the business of producing food. It is in my blood. But it's about doing it in a good way and we can only do that if we are making money."