There remains much chatter about the UK possibly leaving the EU. What would such a development mean for these isles? Well the answers are hard to come by but there may well need to be a debate at some stage in the pastures and arable acres of the country because such a change could be quite profound.
I’ll leave the politics to others, to the extent that this inherently political question can be divorced from economics. Those economics, though, could have considerable implications not just for the farming community but the whole of the food chain, consumers, taxpayers and wider stakeholders in the countryside, including those that see it as a playground of sorts.
If the UK left the EU, would its largely urban taxpayers accept that the funds that presently go to support the CAP become simply re-allocated to our domestic producers on the same technical terms a sort of UKCAP? Or, would the electorate and politicians put together a more ‘bespoke’ package? Maybe different with environmental conditions, or perhaps with funds going to areas of greatest need?
” What would the UK do with respect to the EU’s tariffs and levies?”
As such, would we see a transfer of support from the richer arable east to the poorer pastoral western farming communities? Within and between the agricultural sectors, the outcome is likely to be a differential. Unsupported sectors like horticulture, pig and poultry farming already cope more with open markets than their cosseted counterparts, and so may be best positioned for an EU-independent UK.
What would the UK do with respect to the tariffs & levies that apply around the EU? Do we arrange an umbrella with Brussels? What of sugar production? Would we have our own intervention buying and would all this lead to lower or higher and/or more stable or volatile prices for farmers and consumers?
What of the price of farmland in this context and what of the labour market? With potential immigration controls, is farm labour to be procured from the UK job centre? So many questions and so few answers. However, if the UK does leave the EU in 2017, these and many more will need to be thoroughly understood by UK agriculture and the rest.
Dr Clive Black is head of research at Shore Capital Stockbrokers
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