EU subsidies: What will happen to UK farmers after Brexit?

EU subsidies: What will happen to farming produce after Brexit?

Monday, October 29, 2018

Earlier this month, Irish cheesemaker Ornua admitted that it had begun stockpiling cheddar in the UK to protect the company against price rises if the UK left the European Union without a deal.

The owner of Kerrygold and Pilgrims Choice said it was “preparing for uncertainty” as March 2019 comes closer. 

In July this year, Asda boss Roger Burnley said that food could be rotting at the UK’s border if food supply chains were disrupted by a hard Brexit.

“What would be scary is the prospect of any holdup at the border. Any prospect of a holdup – that includes the Ireland border – would have very significant consequences,” he said.

“You’d be eating into the life of products with all sorts of implications for waste, for freshness, for quality.”

But will we really notice less food in our supermarkets? And how will the loss of EU subsidies affect UK farmers?

JP Dorgan, head of client services at Map of Agriculture, answers some common questions.

 

How do farmers feel about Brexit?

“Before the referendum, we did a massive poll of farmers to try and gain their thoughts on the EU. What was really interesting is that you had a lot of the younger generation farmers who were very positive towards Brexit," says Mr Dorgan.

“You also had a bit of a skew between different areas as large enterprise dairy farmers were quite keen for Brexit whereas most beef and sheep farmers were happy to stay within the EU.

“Outside of all of that noise, there was a big percentage who were sitting on the fence. They didn’t know whether they were for or they were against leaving the EU.

“That to me is quite surprising, because the majority of those farmers would have been getting a subsidy of some description from the EU for the last 30 or 40-odd years."

 

How will losing EU subsidies affect British farmers?

“Looking at the Government's plan, they are obviously heading towards a sustainable and environmental agenda, which is a good thing," says Mr Dorgan.

Under Michael Gove's post-Brexit plans, farmers will be rewarded with payments for their environmental standards, but the current subsidies will be phased out slowly over a transitional period, beginning in 2021. "If we don’t have a healthy planet with healthy soils then we are not going to be around," Dorgan added.

“It does mean that there will be people that lose out and there will be less subsidies available. It is going to have a knock-on effect. There are people out there at the moment who are farming and it is probably the subsidy that is giving them their living.

“Then there are farmers out there who probably don’t need the subsidy and are farming in a very efficient manner. It will potentially have an effect on beef farmers and sheep farmers, depending on their size, scale, and efficiencies.

“If you look at New Zealand – they took away subsidies and the world did not end – people still got up in the morning and went farming, they just had to adjust to different conditions.”

 

Will the Government’s plan make farms more sustainable?

“I think the problem you have for agriculture is that the British public are very far removed from what actually goes on. UK farmers are actually doing quite a good job in managing farms and trying to be as environmentally friendly as possible.

“They know they have got to look after their soils, their animals, their livestock – the UK’s agriculture is probably more compliant than any farming entities around the globe because of the retailers we have. In some ways, UK farmers are probably looking more at sustainability than a lot of our other counterparts across the globe, which is great."

“I think UK farming is very well placed to adapt to whatever is coming down the road in the next five years. They are embracing technology in various forms to support labour and gain insights – some people are using it regarding their soil (soil scanning and understanding the conductivity of it) and that can only be a fantastic thing longer term for the consumer," Mr Dorgan adds. 

 

What parts of the industry will benefit from Brexit?

 

 

“This is the unknown bit, because if the regulations make it harder for imports to come in, does that mean the British consumer is going to have to consume more British cheddar? Maybe, and obviously that will potentially help.

“On the flip side, we export a lot of lamb into Europe, and how quickly can those regulations be changed? The frustrating thing is that nobody knows.

“The Irish have imported 16% more Cheddar cheese this year than they did last year to stockpile it because they don’t know. They obviously still want to be able to sell their product. The fantastic thing about the UK is that you have a big audience for purchasing your food.

"I think what people don’t realise is that it is more about what will happen within the industry after we leave the EU. There will be a lot of consolidation in the next five years and you will see a lot of change that way."

 

Will Brexit mean more British produce on our shelves?

“Maybe, yes," says Mr Dorgan. "At the moment it's competing against French cheese or Irish cheese for example. 

“But, whatever [happens] about Brexit, there are other things that are going on. More and more people are choosing to eat less meat, and there are changes in milk consumption. The guy in my local coffee shop told me that he now stocks nine different types of milk!

"Not a lot of consumers are going into supermarkets and looking for high-end products. Most people are going in and saying they want something nutritious to feed their family that is a reasonable price, and is produced to a good standard by the farmer."

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