A report published this week by the National Farmers Union (NFU) in England and Wales has highlighted the potential effect of a UK withdrawal from the EU on farm incomes.
The report was written by researchers at Wageningen University in the Netherlands and used mathematical models to predict the likely outcome from a range of scenarios.
The scenarios were split into two main areas, the first looking at three possible trade agreements post Brexit. They include:
A free trade arrangement between the UK and the EU (agricultural products would be traded duty free).A World Trade Organisation (WTO) default position (most favoured nation rules would apply) and;UK trade liberalisation policy where the UK would cut tariff rates of imports.The other scenario tested by the Dutch researchers was the rate of direct farm subsidy payments. It was assumed that either they remain at their current level, be cut by 50% or are removed altogether.
Irrespective of the trade policy chosen, the modelling work showed that the loss of agricultural subsidies would result in a cut to average farm incomes of between €17,000 and €36,000 per farm.
However, if there was either a free trade arrangement (as advocated by many supporters of Brexit) or if the WTO default position applied, then this could act to drive up farm prices in the UK because of the additional cost for imports of complying with UK border controls. If subsidies were maintained at current levels, UK farmers would be better off. If subsidies were cut by 50%, the income picture is much more mixed.
Trade liberalisation
But it is the third trade scenario that carries the most danger for UK farmers as under a trade liberalisation policy the UK government puts in place lower tariff rates than those currently set by the EU. This would benefit consumers and would make it easier to conclude agreements with other trading partners.
As pointed out by the NFU, it is also a policy favoured by successive British governments who have consistently argued for tariff protection to be reduced and farm subsidies to be cut.
Under a trade liberalisation policy, the report concludes that farm incomes in the dairy, beef, sheep, pig and poultry sectors would be significantly reduced, even if subsidies are maintained at their current level.
The results of the Brexit report will be presented at 28 NFU member meetings across England in the next fortnight, and the NFU will decide after that whether to take up a formal position on the issue.
Former NI Secretary of State and former Defra Secretary Owen Paterson was in Belfast at the start of the week to take part in a debate around a possible British exit from the EU. Speaking to the Irish Farmers Journal ahead of the event at the NI science park, the Shropshire Conservative MP was bullish about the potential benefits of a UK withdrawal. As a founder member of the cross-party ‘‘vote leave campaign’’, there is no doubt where his allegiances lie.
Despite that, he acknowledged that there can be no certainty about what might happen in a Brexit scenario and no one in the ‘‘leave’’ camp can give any guarantees. “No one knows what the next government is going to be,” he said.
However, if the UK withdraws, he argued that there is then an additional £9.8bn of money available per year to be spent as the government would see fit. “We could target the money in a much more effective manner than currently,” he said.
In his role as Defra secretary, he was in the lead for the UK government during the last CAP reform process. He maintains that he was able to “mitigate against some of the worst horrors” coming from unelected European bureaucrats, but that we have still ended up with a policy, particularly around greening, that is impossible to impose across Europe.
His vision would be that NI will have a subsidy allocation that could be paid out as we see fit. He also pointed out that there is no guarantee of CAP money beyond 2021 if we remain within the EU. “They are short of money and looking to reduce costs,” he said.
On trade, he argued that because the UK is the fifth largest economy in the world, there will be no issue concluding trade deals with others, and he would be keen to see a trade deal that would acknowledge the “special relationship” between the UK and Republic of Ireland.
He was also dismissive of any suggestion that there might be queues at the Irish border in the event of a Brexit. “That is ludicrous,” he said.
He talked about modern technology being used such as automatic transponders to track movements.
He also pointed out that the UK and Republic of Ireland have opted out of the Schengen agreement (open borders across Europe), and instead have their own free movement arrangement. Paterson is keen that this would continue.
A report published this week by the National Farmers Union (NFU) in England and Wales has highlighted the potential effect of a UK withdrawal from the EU on farm incomes.
The report was written by researchers at Wageningen University in the Netherlands and used mathematical models to predict the likely outcome from a range of scenarios.
The scenarios were split into two main areas, the first looking at three possible trade agreements post Brexit. They include:
A free trade arrangement between the UK and the EU (agricultural products would be traded duty free).A World Trade Organisation (WTO) default position (most favoured nation rules would apply) and;UK trade liberalisation policy where the UK would cut tariff rates of imports.The other scenario tested by the Dutch researchers was the rate of direct farm subsidy payments. It was assumed that either they remain at their current level, be cut by 50% or are removed altogether.
Irrespective of the trade policy chosen, the modelling work showed that the loss of agricultural subsidies would result in a cut to average farm incomes of between €17,000 and €36,000 per farm.
However, if there was either a free trade arrangement (as advocated by many supporters of Brexit) or if the WTO default position applied, then this could act to drive up farm prices in the UK because of the additional cost for imports of complying with UK border controls. If subsidies were maintained at current levels, UK farmers would be better off. If subsidies were cut by 50%, the income picture is much more mixed.
Trade liberalisation
But it is the third trade scenario that carries the most danger for UK farmers as under a trade liberalisation policy the UK government puts in place lower tariff rates than those currently set by the EU. This would benefit consumers and would make it easier to conclude agreements with other trading partners.
As pointed out by the NFU, it is also a policy favoured by successive British governments who have consistently argued for tariff protection to be reduced and farm subsidies to be cut.
Under a trade liberalisation policy, the report concludes that farm incomes in the dairy, beef, sheep, pig and poultry sectors would be significantly reduced, even if subsidies are maintained at their current level.
The results of the Brexit report will be presented at 28 NFU member meetings across England in the next fortnight, and the NFU will decide after that whether to take up a formal position on the issue.
Former NI Secretary of State and former Defra Secretary Owen Paterson was in Belfast at the start of the week to take part in a debate around a possible British exit from the EU. Speaking to the Irish Farmers Journal ahead of the event at the NI science park, the Shropshire Conservative MP was bullish about the potential benefits of a UK withdrawal. As a founder member of the cross-party ‘‘vote leave campaign’’, there is no doubt where his allegiances lie.
Despite that, he acknowledged that there can be no certainty about what might happen in a Brexit scenario and no one in the ‘‘leave’’ camp can give any guarantees. “No one knows what the next government is going to be,” he said.
However, if the UK withdraws, he argued that there is then an additional £9.8bn of money available per year to be spent as the government would see fit. “We could target the money in a much more effective manner than currently,” he said.
In his role as Defra secretary, he was in the lead for the UK government during the last CAP reform process. He maintains that he was able to “mitigate against some of the worst horrors” coming from unelected European bureaucrats, but that we have still ended up with a policy, particularly around greening, that is impossible to impose across Europe.
His vision would be that NI will have a subsidy allocation that could be paid out as we see fit. He also pointed out that there is no guarantee of CAP money beyond 2021 if we remain within the EU. “They are short of money and looking to reduce costs,” he said.
On trade, he argued that because the UK is the fifth largest economy in the world, there will be no issue concluding trade deals with others, and he would be keen to see a trade deal that would acknowledge the “special relationship” between the UK and Republic of Ireland.
He was also dismissive of any suggestion that there might be queues at the Irish border in the event of a Brexit. “That is ludicrous,” he said.
He talked about modern technology being used such as automatic transponders to track movements.
He also pointed out that the UK and Republic of Ireland have opted out of the Schengen agreement (open borders across Europe), and instead have their own free movement arrangement. Paterson is keen that this would continue.
This is a subscriber-only article
SHARING OPTIONS: