18 October 2018

ICAEW Health Harmony what now Kent

Few of those involved in the agricultural sector can have failed to be aware of the Health and Harmony consultation which is aimed at helping set the scene for a new Agriculture Act which will define the direction of UK farming post Brexit.

Now that the consultation is closed, one can perhaps consider what the document (and the public response which it engendered) can tell us about the possible direction of post Brexit government policy towards farming.

Firstly, it is clear that, although the document is a consultation, it is by no means a blank sheet of paper. Certain issues seem to be non-negotiable. The concept of phasing out flat rate subsidy payments, for example, is considered only by way of questions which discuss which way the subsidy should be removed, rather than whether it should go. Other sections dealing with improving agricultural efficiency and providing environmental benefits similarly seem to start from the point that the decision has been taken but then explore ways by which it can be implemented, yet the key area of the transition period gives little guidance on the crucial issue of the length of such a transition.

Secondly, a number of important areas are not addressed. The paper does not refer directly to the fundamental role of subsidy within total farm income but seems rather to imply that efficiency alone could eventually replace subsidy. Given that even in years of relatively high output prices, subsidy still provides 2/3rds of farm income, this seems a striking omission and, at present there is no commitment to “ring fence” this amount. Moreover, whilst the report also looks at the supply chain onward from farm to consumer, it does not address the quasi monopoly position of input supplies which gives the farmer relatively little room to improve productivity in that respect.

Finally, the report does not address the question of food security, which many regard as being a fundamental responsibility of government. It looks at some length at animal welfare, plant and animal breeding and disease control, but does not seem to address the possibility that whilst UK farmers might produce the healthiest crops and livestock in the world, UK consumers might just prefer to buy the cheapest products irrespective of source.

So, what happens now? There were 44,000 responses to the consultation. Since there are about 70,000 medium sized farming businesses, that would imply a high response level – however, in the nature of such consultations, not all responses come from those with a direct interest in the subject concerned and many will have come from pressure groups outside agriculture. One would hope that the processing of the responses will be sufficiently sophisticated to take such behaviour into account. Once the responses have been considered there will be a new Agriculture Act. Some guidance as to the direction this might take can perhaps be seen in recent developments in existing legislation. The introduction of a simplified stewardship scheme and the relaxation of some of the Basic Payment compliance rules this year may be pointers of the way policy is heading. However, ultimately, we must now await a decision which “will introduce an Agriculture Bill that breaks from the CAP, providing the United Kingdom with the ability to set out a domestic policy that will stand the test of time.”

It seems likely that this new Agriculture act will usher in the greatest change in the UK farming sector since at least since the Mc Sharry reforms of the 1980’s and possibly since the 1940’s. It is to be hoped that the Act will take on board the concerns which have been expressed and will indeed be a positive development for the industry and one which truly will stand the test of time.