Brexit and agriculture: a conversation with Neil Parish
The future of the UK agricultural sector
Laura Mackain-Bremner and Victoria Howlett from our Agriculture team recently talked with Neil Parish, Chair of the Environment, Food and Rural Affairs (EFRA) committee, about the future of the UK agricultural sector.
Has the workload/focus of the committee changed dramatically since the Referendum?
Yes. We are considering all the repercussions of the potential Brexit trade deals; I just want a deal to be done so we can move forward.
We are currently looking at the Fishing Bill and are likely to get an advanced viewing of the Bill from the secretariat.
We are wondering how much agriculture will be in the Agriculture Bill. We are perhaps a bit at logger heads with Michael Gove because it is important that we get the balance right between food, food production, farming and the environment.
Departure from the CAP: The report recognises that the withdrawal of direct payments will have more of a financial impact on some sectors of the industry than others. Are we looking at significant repercussions for dairy farmers? What are your thoughts on the future of dairy farming in the South West given the difficulties the sector has faced in the past few years?
Dairy is an interesting sector. Although BPS is worth having, milk prices are more important to some farms; it depends on the size of the farm and its income from milk. The extent of the repercussions for dairy farmers depends on the deal. There is also the displacement of imports to consider; hopefully we will buy more British and dairy farms will make more products to sell in the UK. So dairy will be affected but perhaps not too badly. We need a decent trade deal and money for milk.
Environmental controls will be important moving forward. George Eustice is talking about setting up funds for people and so there may be separate sources of support. There is likely to be a pattern of change of support, with links to efficient farming and the environment. As long as the treasury retains the £2/£3 billion for farming, there should be enough money to support the sector.
My view is that if dairy farms are reasonably efficient, are on a reasonable scale and have good milk contracts, they will survive. The smaller farms will survive in all sorts of ways but may need to diversify. They will also need to take advantage of the grants for cleaning up the environment and anything else available.
There are going to be tight environmental rules. I think it likely that lots of farmers will take advantage of the benefits which will be available for cleaning up slurry stores for example.
Ultimately I think farmers will go in two directions; those that become more extensive and go for the grants, and those that become more commercial.
What are your thoughts on the length of the agricultural transition period given that the 6th Report suggests between 3 and 7 years?
I think somewhere in the region of 5-7 years. I thought maybe even 10 but I think 5 or 6 is about right.
There is some suggestion that there may be an opportunity for farmers who want to get out of farming to take their payments for 4-5 years upfront as a retirement package. Alternatively farmers could take this amount to use to invest in equipment and so on. There is nothing definite on this yet though.
Currently there are problems for tenant farmers because BPS pushes their rents up. If upfront sums are paid out this may cause land prices and rents to drop which would have a positive impact on tenant farmers. It will also be interesting to see what happens with Inheritance Tax but that is not my committee’s remit
Increasing Farm Competitiveness: Do you think any new grant system will increase farm competitiveness? Will share farming become more common place to the benefit of new entrant farmers?
Yes but this will take a bit of time. I want to see a genuine grant system, in which the grants are easy to claim with less bureaucracy. At the moment we are extending periods as the current system is so difficult. Of course we need checks and balances but the grants should be kept easy to claim and the system properly structured. Common sense checks should be brought in.
Life is far from perfect under the EU and we seem to regulate for the lowest common denominator. There needs to be more trust as most people are honest; we need to look for the weak points but do not need to regulate so much as we do now.
In terms of new entrants, the issue is getting capital. I think we need a venture capital system. The fact there will no longer be BPS means people will no longer be able to just sit on their land. Land will need to be farmed and looked after and that is a good thing.
We need new thinking. We need some sort of access to capital and taxation needs to be taken into account.
Do you think mandatory reporting across the food and farming sector would be of benefit?
Yes it could be of benefit and we are looking at it. We need to be a bit careful so that we are not too “Big Brother”.
What do you propose would be an adequate successor to the Agri-Tech fund?
Something similar to the current fund but linked to new technologies. It is all about robotics now. Hopefully new tech can also help with reducing the big machines going up and down our lanes!
The problem is they are not terribly commercial/easy to use but robotics may be the way forward. There are all sorts of things out there and it is an exciting time. Picking and harvesting is an issue in terms of labour and robotics are clearly the way forward.
The Agri-Tech fund is interesting; this is not an opportunity to reinvent the wheel. I am all for evolution not devolution.
What about migrant labour? There has been talk of re-introducing a Seasonal Agricultural Workers Scheme but further details have not been published. Surely this is necessary for our fruit growers?
This is related to the agri-tech point above. Yes we have done two enquiries. I met with Sajid Javid and he said we can expect something on this in the White Paper. Immigration was one of the drivers behind the “yes” vote so the migrant labour issue is a controversial one. If we do not have access to labour in the UK, farmers will stop growing products that are labour intensive and so we will be buying imported products.
Public Money for Public Goods: Naturally there seems to be a perceived conflict between food production and environmental stewardship but the two have to be “synergistic” in order for the new scheme to operate effectively. Is this going to be as challenging as some make out?
This concept is fine except my argument is that food is a public good – and food production should be acknowledged as a merit good. I asked the Prime Minister about this and she understands where we are coming from. There is a lot which is good about this but we need to get the balance right.
How is the environmental stewardship going to be policed?
We need to create an advisory system; partly funded by DEFRA with a genuine advice focus.
The current problem is that the existing stewardship scheme is heavy on the policing to the detriment of its advisory role. We need a proper advisory system that people can trust. This system needs to be risk-based with spot checks and proper intelligence on who is non-compliant. We also do not need to re-map every three years.
Will the environmental stewardship requirements lead to longer FBTs as per the TFA’s campaign on the basis that long-term tenancies will focus tenants’ minds on custodianship rather than pure “farming”
Yes, I think it will lead to longer term FBTs. Also it is quid pro quo, because schemes will be longer term. Farming will be focusing on investing in soil and its fertility so FBTs will need to be longer to achieve this.
Trade and Labelling: Do you have any comments on getting the balance between delivering high standards (in terms of animal welfare, environmental responsibility and assurance) and allowing our farmers to compete in the global market? The report seems to lean towards higher standards.
This is a big problem. One half of our party says we should be more competitive and the other half says we need higher standards. It is a difficult one but higher standards are important. We need to make sure we aren’t allowing any sub-standard food into the UK. Trump said he did not like the agri-food deal but I think this is because Trump wants to send food to the UK which is in line with US standards which have lower welfare and environment thresholds. There is an issue of food safety we need to consider. Everyone will do a trade deal but everyone wants the best deal for them. When I asked Gove whether he would refuse to let in chlorine washed chicken if that was the last issue holding up a trade deal with the US, he said yes!
It seems to me that linking in DEFRA with trade is important and I understand Clare Moriarty from DEFRA is going to sit in on trade negotiations. It is important there is someone there fighting our corner.
Another reason we need to get the balance right is that the public will say they want natural, local food but do they want to – can they afford to pay for it?
Supermarkets like Aldi and Lidl are managing to give a good price to the farm and the customer. It is about affordability; we already have too much food going out through food banks. We cannot make prices so high that we need to import. In terms of labelling, we are going to be competing in the global market, we do not want to have issues getting products in.
No deal: The European Commission’s communication on the scenario of no deal withdrawal includes warnings of severe impacts on transport between the UK and EU – this will clearly have an enormous effect on our food and farming community, will there be any steps taken to try and reduce the consequences of this and what do you anticipate they will be?
The communication on the scenario of “no deal” shows both sides are facing each other. It suggests to me that we are more likely to get a deal. It feels like both sides have been messing about until now. The government is putting in real money now. It is probably better to get a deal, than no deal at all; it has all been a bit airy fairy until now. The PM was pushed to put a plan together at Chequers and now she has done that she is facing further criticism.
The Irish border is important because pigs and lambs go either way. The border issue needs to be right, if it is difficult as neither side will want to be blamed but this might ultimately help us get a deal.
Are physical infrastructures being planned to allow the movement of animals, animal products and plant products in the event of a no deal Brexit?
Yes, this work is being done by DEFRA. I have been talking to Clare Moriarty about this. Whether what is put together will be enough or will work remains to be seen.
Do you anticipate that Defra’s response to the Consultation (which we understand will be published alongside the Agriculture Bill) will provide greater detail on the issues, particularly on future funding and the design of the future agricultural support system?
My view is that it is going to be weak on that. I have no proof, but I think it might need one or two amendments.
I have spoken with the civil servants and it seems we may end up with a Henry VIII clause (i.e. the Government can do whatever it likes when it likes) with little referral back to Parliament, which I believe will be too flexible.
There will be something in the Bill about the future support system but it will be broad not detailed and might give one or two options. This is all my speculation but with a degree of knowledge.
What do you, personally, feel is the most important issue for the agricultural community which needs to be dealt with by the Agricultural Bill?
Agriculture and food! Environment is being looked at enough, and so is animal welfare. We need affordable food and commercial farming and I am hoping the Agricultural Bill will deal with this although it may be ‘between the lines’.
Commercial farming elements need to be in there, but these have not been talked about too much.
Ultimately the question is do we actually want to produce food? What do we want? We need to refocus; there is lots of good stuff going on. We need to couple farming with the environmental rules. We do not want to shrink farming too much. Food and drink is the largest manufacturing base in the UK, and is also important for employment purposes and social structures.
Also we need to look at affordable mainstream food for large shops!
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