After the UK leaves the EU customs union, it should unilaterally phase out tariffs on food and phase out production subsidies and income support by 2025, according to a new report from Policy Exchange.

Policy Exchange, the think tank and education charity, has said that tariffs should be phased out to prevent increases in consumer food prices and prevent complicating new trade deals.

In the report, it recommends that the UK should replace the Common Agricultural Policy (CAP) with a new British Agricultural Policy which focuses on payments for ecosystem services (or natural capital).

This would also phase out production subsidies and income support by 2025.

It has said that the agricultural subsidies regime needs to be reformed so that farmers who deliver public goods like biodiversity and flood prevention are rewarded, rather than rewarding wealthy landowners.

Any remaining subsidies should be redirected towards protection for natural and public goods, and increasing R&D to boost innovation and the sector’s long-term productivity, according to the report.

Subsidies for rural infrastructure

It believes that the British government should ensure that its industrial strategy reflects the needs of the rural economy.

To do this, some agricultural subsidies should be redirected towards rural infrastructure and connectivity and agricultural R&D.

Reform of EU rules

Policy Exchange has also said that there should be a review and reform of EU rules such as the crop diversification rule once the UK leaves the EU.

Another suggestion made in the report is to transpose key environmental directives to ensure continuity of protection for the environment.

Meanwhile, Policy Exchange believes that the Food Safety Agency should be given new powers to collate, commission, and review scientific evidence on food safety and animal welfare.

Farm income from subsidies is ‘unsustainable’

Policy Exchange’s director of research Warwick Lightfoot, who co-wrote the report, said: “The primary goal of government intervention in agriculture should be to support public goods, and to preserve high standards for environmental protection, food safety, and animal welfare.”

But while we are in the EU, 87% of UK farming income comes from subsidies, a perverse and unsustainable state of affairs.

“Leaving the European Union allows us to think again about agricultural policy from first principles.

“The starting point for policy reform must be the consumer.

“The EU’s historic reluctance to open up trade in food products has repeatedly stymied trade deals and led to higher prices for consumers and a distorted farming industry.

“The UK can now lead the world in cutting tariffs and being a champion of free trade in agriculture.”

Lightfoot also said that reform of the CAP also offers a once in a generation chance to reform Britain’s environmental policy, and ensure that we leave the environment in a better place than we found it.

“For the first time in over 40 years, we can have a proper land management policy, which balances agriculture with other land uses like forestry – outside the EU we can plant more trees.”

Read more

Protecting farmer income must be central to Brexit - Comer

A new political scene for CAP 2020 negotiations