Brexit: Top 5 issues for UK rural businesses

A week is a long time in politics so, by the time this edition of Rural View reaches readers, who knows what may have taken place in Whitehall...

As we went to press, prorogation had been invoked and a legal challenge had succeeded in Scotland and was ongoing in England. A general election was on the cards and everyone from QCs to taxi drivers was talking about a constitutional crisis.

For the rural economy, there is much to consider. But, with so much uncertainty, what should landowners be thinking about and planning for?

Regardless of whether we end up with Brexit, a no-deal Brexit or no Brexit at all, any government will need to address the same core issues.

So, to help whoever occupies Number 10 by the time this magazine hits mailboxes, we have compiled our top five rural issues that need consideration and quick consensus.

1.  FARMING SUBSIDIES AND THE CAP

Amid all the uncertainty, one thing is clear. When the UK leaves the EU, the subsidies currently paid to landowners under the Common Agricultural Policy will stop and funding will instead come from the government.

Over the course of seven years from 2021, the Basic Payment Scheme (BPS) will be phased out at varying speeds. Payments up to £30,000 will be reduced by 5% annually, while payments of £150,000 upwards will shrink by 25%.

Many farm businesses currently rely on BPS payments to turn a profit and, by the end of 2027, they will need to have found a way to survive without it.

2.  PUBLIC GOODS AND NATURAL CAPITAL

Targeting public money at public goods was a mantra of Michael Gove when he was Defra Secretary of State. He repeatedly made it clear that he wanted to see area-based payments replaced by a scheme which rewards landowners who manage landscapes and improve the environment.

While the intentions of the government were fairly clear, what qualifies as a public good was less so.

Protecting watercourses, good soil management, planting trees and carbon reduction are all expected to attract public money under new Environmental Land Management Scheme contracts. However, the notion of natural capital – a device to measure the natural environment and the value of it to the public – could serve to add a layer of additional complication.

And the government does not have a good track record in delivering schemes which are easy to apply for or get paid on time.

3.  MARKET ACCESS AND TARIFFS

If attracting payments for managing the landscape is something landowners will feel they can have some level of control over, market access and the threat of imports is certainly not.

At the time of writing, a government pledge that it will not allow food which doesn’t match UK standards into the country is all that protects British farmers. Chlorine-washed chicken and hormone injected beef are two high profile examples of products which are illegal in the UK but – without protection – could compete with British food on the shelves.

Import tariffs could stop British food being undercut by imports, but in some sectors – such as eggs – the import tariff currently in place is being removed. Access to new markets across the globe is a potential opportunity to export British food, but no trade deals can be negotiated until the UK has left the EU.

4.  BIOSCIENCE AND FARMING INNOVATION

Boris Johnson used his first speech as Prime Minister to set out his determination to free the UK from European laws preventing genetically modified crops to be bred and grown.

He said: “Let’s liberate the UK’s extraordinary bioscience sector from anti-GM rules. Let’s develop the blight-resistant crops that will feed the world.” His sentiments reignited the war of words from both sides of the divisive debate, but will have landed well with farmers who are in favour of using the technology to boost yield and prevent disease.

Gene editing is another innovation that domestic seed breeders are prevented from embracing and in Europe it falls under the same rules governing GM. Both technologies – on paper at least – could be among a number that would be permitted in the UK should the government seek to legalise their use post Brexit.

5.  ACCESS TO A WORKFORCE

The weakening of the pound has already had a negative impact on the number of seasonal workers who are drawn to work on UK farms, and has done since the Brexit referendum in 2016.

Industry groups have warned the government that reliable access to labour is critical, for fruit and vegetable growers in particular. In total, as many as 60,000-70,000 seasonal workers are needed across Britain each year.

Freedom of movement for EU nationals will end on 31 October in the event of a no-deal Brexit.

To read more articles like the one above click the link below to download the full publication. 

We have a lot of great stories to tell in this Autumn/Winter 2019 issue. But in a time of such political uncertainty, all we can do is concentrate on what we know. Articles featured in this issue include the true value of estate management, how a mixed farm in Yorkshire is making best use of renewable energy, the impact of biodiversity for landowners, the cloud of Brexit and its impact on auctions, information about compulsory purchase, and much more.