The British agricultural sector likely to bear the brunt of Brexit

Here is the likely scenario of the British farmer in a post-Brexit world.

It is interesting to see how one referendum has such widespread impact. Following Brexit Britain will be radically overhauling its agricultural policy since it will no longer get funding from the EU for its farming budget.

For the first time in decade, British farmers will have to fight for budgetary allocation with department such as education and health as the purse strings which were earlier handled by Brussels is shifted to London.

The move has also spelt trouble for farmers in the EU since the output of British farmers were more than what it took from the bloc.

While earlier British farmers were shielded by a powerful farming lobby within the bloc and they used to benefit from EU subsidies, preferential access, trade and cheap labour, British farmers will have to handle all of these on their own in the post-Brexit world.

“The bloody-mindedness of the French or the Irish in standing up for agriculture was not just standing up for their farmers but actually brought a good deal for us as well. Without them we are more vulnerable,” said Nigel Miller, a sheep and cattle farmer near Galashiels in Scotland’s Borders region.

“The reality is, as a farmer, I don’t see the UK government expending a lot of negotiating capital to protect agriculture. Their main issue when they look for trade deals will be financial services, banking, etc,” said Miller.

In 2015, British farmers received $3.5 billion (3.25 billion euros) from the EU, essentially as a form of income support which does not take individual needs into consideration.

Although the British government has stated that the guaranteed payments will be maintained upto 2020, Andrea Leadsom, Britain’s farming and environment minister said earlier in February that following a stop in EU subsidies, the country is set to a major policy overhaul.

While on average a British farmer typically receives $18,700 (15,000 pounds)  a year as direct subsidy, a significant chunk of this money go to wealthy individuals who are large landowners.

An investigation by Greenpeace, an environmental lobby group, showed that in 2015 the top 100 recipients of EU direct payments in Britain received more in total than the bottom 55,119 recipients combined.

“It has the potential to be quite radical. What is the taxpayer getting in return for all this money? Most of it does not go to poor farmers,” said Hill.

Hannah Martin, a campaigner for Greenpeace hopes that the British government will reshape its farming and food policy so that payments received by the farmers are for the “common good”, rather than just rewarding landowners.

“That means, landowners getting the money are doing positive things like boosting rural economies, ensuring food production is genuinely sustainable, reducing flood-risk, maintaining healthy soils and protecting biodiversity,” she said.

In a post Brexit world, British farmers foresee an end to preferential trade deals, a stop to cheap seasonal labour and a grinding halt to subsidies.

In pure budgetary terms, while Britain is likely to benefit in a post-Brexit world since it puts in more than it takes from the bloc, however this will not necessarily translate to British farmers benefitting from the surplus funds.

“The moment you are putting payments to farmers up against the National Health Service, care in the community, education … You can see it is going to take its share of cuts,” said Sean Rickard, a former chief economist for the NFU.

Farmers are a worried lot. They fear sectors such as health and finance will get higher priority than theirs. Further, new additional tariffs are also likely to come up from the EU, all of which combined could have a significant impact on their livelihood.

There is also the concern that new trading arrangements with countries outside the EU could leave British farmers vulnerable to more cost effective imports from agricultural powerhouses such as the United States and Brazil.

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