Scrap all subsidy payments to farmers and sack all the bureaucrats at the RPA. We don't subsidise the coal or steel industries anymore, so why should get a free ride ?
Brexit could further exacerbate the woeful IT track record of farmers receiving rural payments from the UK government, the Public Accounts Committee (PAC) has warned. The Common Agricultural Policy (CAP) provides direct financial support to farmers primarily through the Basic Payment Scheme (BPS), which accounts for around 80 …
There are typically a few arguments for subsidising farming:
1) A strategic decision to protect the food supply. The UK is already not self-sufficient in food production and decimating local food production would make the country even more dependent on imports. Food imports which may see a 20% import duty after Brexit if we screw up the negotiations.
2) These subsidies are often also used to steer behaviour. They can, for instance, force farmers to employ crop rotation techniques so the land isn't exhausted too quickly. Or they can pay for leaving certain plots of land uncultivated for conservation reasons. Through these mechanisms many countries have made farmers an integral part of environmental protection, flood prevention etc.
3) They can be a good money making scheme for people in the right places. Paul Dacre, the editor of the UK's biggest Neo-Nazi broadsheet, receives over €400.000 a year in EU subsidies for his estates.
In the current environment, arguments 1 and 3 will probably be enough to continue subsidising farming.
Apparently there's a lot of margin on those lettuces which food producers will be only too happy to soak up for us.
WTO has a set of rules for deciding the MAXIMUM tariff that can be applied to particular imports from a particular country.
There is no obligation to charge the maximum value.
Besides I seem to remember joining the Common Market resulted in an increase in food prices. Losing the EU restrictions on imports from outside the EU should result in cheaper food prices.
This is actually one of the first case studies you come across in economics.
The basic problem is that farmers have to predict the price of their crops up to a year before they are sold, and once the seeds are or are not sown, they are committed to their decisions. Furthermore, in an imperfect world they don't know what everyone else is doing.
Human nature being what it is, this situation rapidly spirals into a boom/bust cycle, where a glut in a crop pushes prices down, making fewer farmers want/afford to grow next season, resulting in scarcity and high prices (see the current broccoli greens rationing because of Spain's problems), and the high prices prompt investment in the crop and then another glut, and so on. It's also pretty clear that in this process quite a few farmer will take a financial bath on each cycle.
Clearly that's simplistic, but having a guaranteed minimum return on investment via subsidies prevents this cycle taking hold.
Also, as others have said, keeping farms running is of vital strategic importance, not just due to wars etc but due to the ease with which an oil crisis (or French docker's strike) could leave us up sh*t creek.
An MP spoke about talking with a farmer who voted BREXIT. His motive was that an EU body, DEFRA, was holding up his subsidy payments.
He did not understand that DEFRA is a UK Government department - who the EU had fined for not distributing the farming subsidies in a timely fashion.
He expects his subsidies to continue after BREXIT. Good luck with the same DEFRA in charge of their distribution - without any EU body to give them a kick.
The alternative is that after Brexit, UK farmers go back to actually producing food efficiently, negating the need for subsidies.
The whole system was set up to keep militant French farmers, with their unviably small farms, from going broke and jamming up Paris with their tractors. Then we got subsidies for farmers to NOT grow things on their land! The dumping of the EU’s CAP is just one of many things that will galvanise the UK economy once we orient ourselves to trading with the rest of the world.
But if Dutch, German, Belgian, French, Italian and Spanish farmers can run globally successful production within the current trade agreements why wouldn't the British farmers be able to do it?
This whole "we can finally trade with the whole world" mantra is a con. Many of the world's top trading nations are all in the EU and are already trading with the whole world. They don't seemed to be harmed by EU regulations. What is it that UK exporters can suddenly do once outside the EU that they can't do today?
Fat cats just crush their prey by sitting on them. Slim cats just don't have the same effect.
Here's an analogy - not cats but a kids' game. Apologies for it being on Facebook
But if Dutch, German, Belgian, French, Italian and Spanish farmers can run globally successful production within the current trade agreements
Can they? The only reason French farmers manage to make a living at all is because they're paid huge subsidies by EU taxpayers. Their farms are far too small to actually be profitable.
The CAP was set up to help such small farmers survive, and it crippled the abilities of big farms like those in the UK. Whatever else Brexit brings, the end of the CAP rules in the UK can only be good for farmers, who will have some incentive to make the UK self-sufficient, instead of being subsidised not to be and forcing us to import food.
It all goes way beyond simple subsidies, of course. The main problem in France is that when a farmer dies the law requires that the estate (which in most cases means the farm) be equally divided among the children. Compare that to UK tradition where the farm is passed down whole to the eldest son/child. Over time that means UK farms can grow, but French ones remain small and fragmented.
Of course, the EU politicians could try to fix that by mandating the same inheritance rules across the EU but they know fine well that it's an impossible task, there's far too much cultural difference for it ever to be acceptable. Note that they'll admit that, of course. Instead they just implement the usual fudge which only works for some people. For the others, well it's their own fault for not being ideal Europeans.
"The CAP was set up to help such small farmers survive, and it crippled the abilities of big farms like those in the UK. Whatever else Brexit brings, the end of the CAP rules in the UK can only be good for farmers, who will have some incentive to make the UK self-sufficient, instead of being subsidised not to be and forcing us to import food."
UK trade agreements with countries like the USA and Australia will mean that British farmers will find their farms too small to compete with their competitors' industrial scales and often lower standards.
'UK trade agreements with countries like the USA and Australia will mean that British farmers will find their farms too small to compete with their competitors' industrial scales and often lower standards.'
Sweet. Then we'll have cheaper food.
And lower house prices with all that land available.
And our now ex-farm workers can go and do jobs which are more productive making us all richer.
so whats to stop us from making deals with each of those top 15 nations or indeed the EU once we leave the EU. The EU makes deals with non EU nations all the time. there is nothing stopping us from making those types of deals too. If you think the EU is that spiteful it won't want to deal with us then we are simply better off not dealing with them.
But making all these deals takes a lot of time. Remember that the people you are wanting a deal with have their own agenda too, and want the best terms for themselves. If only all these people saying we can do these marvelous deals with everybody that we can't do now would look at things from the other fellow's point of view.
Minor point, but on a recent trip to India I looked to see how many UK products were in the shops, motor vehicles etc. Not exactly a rigorous examination, but I found just 2 - some rather tired packets of McVitie biscuits, and some HP sauce (made in the Netherlands).
Also, we don't have that many trade negotiators, as has been pointed out several times.
Btw - sine at least the 1950's (and probably before that) we have not been self-sufficient in food
'UK farmers are already not very good at trading with the rest of the world compared to many other European farmers. Why do you think reducing the amount of trade agreements will suddenly make them better at it?'
Because trade agreements have relatively little impact on how much individual entities export. However subsidies generally ensure you lack the efficiency to compete.
UK had a system of subsidising farmers since the 2nd world war, and probably before that. joining the EU wasn't the start of agricultural subsidies, merely a change of system.
motivation was, iirc, that farming being one of the few sectors of the economy subject to market discipline resulting in big swings in production. so if one year pigs were scarce and expensive, farmers would pile in, hence surplus of pigs, hence price crash hence scarcity of pigs. this was considered a bad thing and the subsidy system was a reasonably sensible way of damping market fluctuations. details elude me I'm afraid, did it in O level economics when de Gaulle was saying non.
"However subsidies generally ensure you lack the efficiency to compete."
Protective barriers were used in the 19th century to placate UK landowners who couldn't compete with cheaper imports from places like the prairies of North America.
That wasn't a government subsidy. Both the government and the landowners raked in the money from everyone else in the UK having to pay the higher prices.
The higher prices were particularly hard hitting on the working classes. Eventually that filtered through to the manufacturing industries having to raise wages and their own prices.
Those protectionist tariffs went with the repeal of the Corn Laws.
Indeed so - and it was considerably more authoritarian than the CAP ever was. There were regular announcements on the Home Service instructing farmers to apply a particular pesticide on a particular day. (The Archers was devised to give these instructions a more homely setting.)
Agricultural subsidies are ultimately limited by World Trade Organisation rules.
For the European Union the permitted quota is held by the European Commission. When the UK exits the EU it will have no WTO approved subsidy quota in its own right.
Post Brexit the UK will have to negotiate its own WTO agreements. However long that takes in the interim it will have two choices: either cease paying farm support or continue paying illegally and consequently creating a block to the necessary negotiations.
Frankly DEFRA's inefficiencies are going to be the least of the problems facing farmers who rely on CAP payments for significant parts of their incomes.
Because if the WTO said that the subsides amounted to illegal state aid then other countries would be free to give UK trade a swift kicking on a number of fronts, not just said industry. Unless you're talking about coming out of the WTO entirely and I haven't heard even the most rabidly rabid brexiteer indulge that notion.
Sadly not - the FT has an article here - we still need to do a ton of negotiating to benefit from WTO terms. Here's a google cache link to get round the paywall:
I used to work in a small public sector organisation that paid grants to farmers. Central government got very upset because our little organisation could pay farmers the correct amount and on time (with full audit trails to verify the payments were for farms and not parts of the North Sea), yet central government couldn't do any of that. They found it very embarrassing.
Who's getting all that farm subsidy money ?
This is where your money went
TATE & LYLE EUROPE (031583) €594,270,084
TATE & LYLE EUROPE €170,957,385
MEADOW FOODS LTD €127,223,714
C CZARNIKOW SUGAR LTD €99,316,783
NIDCO FOODS 1992 DIV OF FAYREFIELD €96,771,940
NESTLE UK LTD (771234) €93,126,292
PHILPOT DAIRY PRODUCTS LTD €82,273,175
SIMPSON, D €69,516,054
TATE & LYLE CITRIC ACID (A DIV OF T & L INDUSTRY) €62,807,599
MILK SUPPLIES LTD €45,462,341
DAIRY INGREDIENTS (UK) LTD €34,415,026
NATIONAL TRUST €29,370,027
DAIRY CREST INGREDIENTS €23,896,191
BRITISH SUGAR PLC €23,569,028
Syral UK Ltd €21,815,720
Czarnikow Group Limited €21,621,843
G'S GROWERS LTD €20,214,730
Berry Gardens Growers Ltd €19,665,534
European Commission (M) €19,380,040
HOOGWEGT INTERNATIONAL BV €19,181,434
PARKE DAVIS & CO LTD T/A ADAMS €17,869,221
FARMCARE LIMITED €17,206,098
For clarity - this is an "All Years" view, which appears to have data back to 2013.
For opinion - it's no surprise that many big companies are getting subsidies. Same in fishing, IIRC - the majority of the "British fishing fleet" is in the hands of large companies.
Of course, there are the plucky small independents. I'm not denying that. But the Brexiteers like to pretend that they're the only story, because that pulls on heart-strings. The fact is that the vast majority of the problems for both farmers and fishermen are down to a combination of corporate competition and government cockups. Europe is either neutral in events, or on their side trying to improve things.
Sadly, that makes for a complicated story. Much easier to just bend the truth and go back to that narrative of the plucky independent...
Fact check: Those stats are a bit misleading, it shows the amount of money paid to entities in the UK, but it doesn't break it down to show how much was paid for land in the UK.
For instance, Tate & Lyle Europe is the EU subsidiary of American Sugar Refining, and has sugar growing farms all across the EU; all the subsidies for those farms are paid to the company in the UK.
A farmer told me that he'd voted for Brexit, and when I asked about his reliance upon CAP subsidy money, his response was revealing. We want the subsidies to go, he said, because as long as they exist those bastard multinationals can pay us less than the cost of production, as they know we'll still survive because of the EU handouts, and no-one will support us to stand up against them.
So the EU subsidy (from taxes - did somebody mention £350m a week?) that comes out of our own pockets is being used as a lever so that the supermarkets are able to offer cheap food over the shop counter so that we don't spend so much - out of our own pockets - on our grub and booze?
Yup, says he, that's why I'm voting Brexit.
So the EU subsidy (from taxes - did somebody mention £350m a week
Someone did a couple of times. Then they went quiet as everyone else took this number and ran with it. Then they admitted (way after the fact) that the figure was actually a load of bollocks.
The BBC has a break down of the magic £350m amount.
Devolution is not the source of the problem here. The SAF is one of the few things northern Ireland has managed to do well... We have a well received fully functioning system that has met and exceeded all of its targets and managed to make advanced payments in October 2016
Perhaps then, you could stay on topic and argue why the sky won't fall in when we adopt WTO rules.
You know, like how wonderful it will be for our farmers to be able to freely trade with Argentina, Iran, Zimbabwe, Yemen and all those other countries that just can't manage without our products.
Or perhaps you can't...
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