The Common Agricultural Policy (CAP) has played a fundamental role in regulating and supporting UK agriculture since the UK joined the then European Economic Community. It has helped in facilitating free trade in agri-food products within the EU Single Market, while many farmers in the UK—particularly hill farmers—rely on CAP funding to sustain their businesses. Wider rural communities also benefit from agri-environment schemes, rural investment and the sustained agricultural production in often remote areas.
Yet the CAP has often been criticised by the industry for being bureaucratic and burdensome, and some believe CAP financial support has been misdirected and ineffective. Brexit thus presents a real opportunity for the UK to review and adopt a policy for food and farming which regulates and supports the agricultural sector effectively, and which is tailored to the UK’s unique farming landscape. However, farmers across the UK will also need time and clarity from Government to make the transition to a new regulatory framework and a new funding system after Brexit.
Agri-food products are traded extensively. EU membership currently provides the framework for the UK’s trade in agri-food products not just within the EU, but with third countries with which the EU has negotiated preferential trade agreements. Once outside the EU the UK must develop its own external tariffs, and may find itself subject to the high external tariffs applied by the EU to agricultural products—to the detriment of UK farmers and food manufacturers—unless a preferential trade agreement is agreed. The UK may also face non-tariff barriers when exporting agriculture and food products to the EU, resulting in delays at ports and additional administrative costs. Both tariff and non-tariff barriers could disrupt integrated supply chains between the UK and the EU, and pose a particular challenge for the agri-food sector in Northern Ireland.
As it negotiates new trading relations with the EU and the wider world the Government will need to balance complex interests. It will need to secure a fair deal for farmers and maintain high standards for agricultural products in the UK, including farm animal welfare, while delivering affordable food to consumers and complying with WTO rules.
The Government is currently giving mixed messages to the agricultural sector. Its vision for the UK as a leading free-trade nation with low tariff barriers to the outside world does not sit easily with its declared commitment to high quality and welfare standards in the UK farming sector. Combining and delivering these two objectives will be a considerable challenge.
Agricultural policy therefore cannot be seen in isolation from trade. The terms of future free trade agreements will affect or limit domestic policies on regulation, funding and farming standards, while those policies may in turn determine which countries UK products can be sold to.
Agricultural policy is a devolved competence, and the Government will need to engage extensively with the devolved administrations to ensure the repatriation of agricultural policy from the EU respects the devolution settlements without compromising the integrity of the UK’s internal market in agri-food products.
The UK’s agri-food sector relies extensively on other EU countries for both permanent and seasonal labour. This labour ranges from skilled professionals (such as veterinarians) to labourers who may be viewed as unskilled, but are in fact skilled at sector-specific tasks (such as abattoir workers and fruit and vegetable pickers). Without access to this labour resource, both the agricultural sector and food manufacturers will face severe difficulties. This is an immediate challenge, which the Government must address urgently as the UK approaches withdrawal.
Doubts over whether the UK can negotiate the Government’s envisioned trading relations with the EU have been widely rehearsed—by the agricultural sector among others. Farmers risk high tariffs and non-tariff barriers on exports, which would render their business uncompetitive, while simultaneously having to adjust to a new UK policy for funding. This could have detrimental effects on an industry—and rural communities—which needs long-term clarity and policy stability to adjust to the post-Brexit policy environment. Transitional arrangements will be critical to the long-term success of UK farming.