I wonder what the new Agriculture Bill will deliver for us (and I’ll come back to who ‘us’ is later).
When (if) we leave the EU then we will also leave the Common Agriculture Policy (CAP) which has been a much-criticised part of our lives for more than four decades. If we are to say ‘Goodbye CAP!’ then we need something with which to replace it.
This blog will briefly deal with how we got to where we are today (it would be a very long story).
How did we get here? These days we tend to think of food as something that is cheap and in good supply – it wasn’t always so (even for the rich west). Food rationing ended in the UK in 1954 after the stringencies of WWII. My parents grew up with food rationing as part of their lives and similar thoughts were in the minds of those who founded the European Economic Community. Early forms of European agriculture policy simply underwrote food production so that producers (farmers) could rely on guaranteed prices for their production. This certainly worked, and in time one could jump off a butter mountain and into a wine lake. Wasteful overproduction was then the problem with food having to be dumped on world markets or stored in intervention stores at the taxpayers’ expense. There were also ecological consequences of these policies – overgrazing in the uplands and loss of marginal habitat in the lowlands weren’t caused by the CAP but their impacts were exacerbated by the fact that all production would find an artificial market.
Although primarily a food production policy a further strong thread running through policy was the desire of some EU countries to maintain rural communities and rural ways of life. So, paying farmers a form of income support to prevent rural depopulation was part of the policy.
Reform was necesssary, and the big change in the CAP was the introduction of a 2-tier system of spending our money so that a large part of the money went to farmers as income support (sometimes known as Pillar 1 payments), just for being farmers, because we all like farmers! And the second area of spend (Pillar 2) went into a variety of support mechanisms including support for environmentally friendly farming systems.
The logic behind this was simple, if you pay farmers to produce food then they will produce food and they may do that in ways which you don’t really like. They may use more powerful chemicals more often (they know they will get paid for their produce even if it is in excess), they may put out more sheep onto a hillside than is good for the hillside or good for the sheep because they get paid per sheep, they may calculate that bringing marginal land into cultivation is worth it because they know that the price of wheat is guaranteed even if everyone produce 5% more than they did. And no-one pays for wildlife, landscape, water quality or flood alleviation so food production wins out over those public goods (the first mention here of public goods – we’ll come back to them in more detail later).
So, the shift to payments under Pillars 1 and 2 was a way of putting some sort of value on wildlife etc and (eventually) cutting the link between how much a farmer produced and their payment. An economist might say that this was correcting market distortions and beginning to internalise the externalities.
So where we are now is that almost all farmers (there are a very few exceptions) receive payments which are basically no-strings handouts just for being a farmer from Pillar 1 (if you have bought a farm in recent years you would be getting them) and many farmers have decided voluntarily to apply for grants to make their farming more environmentally friendly.
The systems are different in detail but similar in principle in the four UK countries, and they are recognisably similar to the experiences of other farmers from western Ireland to the Black Sea and from Andalucia to Arctic Finland. That’s why it’s called the Common AP.
Most of the money (roughly two thirds) goes into income support and the rest goes into the good stuff. The process of change has been slow – definitely gradual reform rather than dramatic change. Brexit provides the opportunity, but nowhere near any certainty, to produce a better system here at home and that’s why the Agriculture Bill was launched last week.
That’s my starter on a Bluffer’s Guide to Agriculture Policy (it misses out loads of stuff – but that’s a good thing). Next, probably Wednesday (though life is uncertain) I will discuss in more detail what is wrong with the current system and, not surprisingly, the answer to that question depends quite a lot on who you are – who ‘us’ is.
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Very useful information and very informative, Mark. Well worth doing I hope many people will read this series of yours. Looking forward to the next “exciting” episode.
Very useful explanation – thanks Mark. Like most aspects of the EU that are derided by Brexiters as ideological or simply capricious, it sounds like the CAP was born from sound reasoning and let down by the implementation (and, doubtless, special pleading). I’ll look forward to the next instalment.
This reads well and concur with content as a former insider.
As well as over production there were occasionally shortages.
Sugar: From the archive, 9 July 1974: Rationing starts as sugar shortage looms
https://www.theguardian.com/theguardian/2010/jul/09/archive-rationing-sugar-shortage-looms?CMP=Share_AndroidApp_Copy_to_clipboard
Potatoes: https://api.parliament.uk/historic-hansard/commons/1976/jan/28/potatoes.
A good summary. Graham Harvey’s “The Killing of the Countryside” is a pretty good summary of agricultural policy since WW2 in Britain. Although as it was published in 1997, it obviously doesn’t deal with events after then.
Great summary Mark. Also worth noting that the concern for “Countryside” in the sense of rural communities, landscape, and wildlife, doesn’t form part of US policy thinking. They don’t really have “countryside” in our sense. So what we see as public goods they see as unfair subsidy, what we see as environmental protection they see as non tariff trade barriers.
None of which bodes well for our countryside if the hard Brexiteers get their way.
Something in my browser must be hiding “US” in the blog
Mark,just one thing wrong there for your readers.
You surely know that bringing marginal land into production for wheat which is what you say in a roundabout way would never happen in UK as it would never ever be profitable.
Even RSPB farm knows that.
Dennis,
Not quite true if you go to the Somerset Levels – where water levels were lowered to allow arable – burning effigies of NCC staff in the process – but, actually, you are right – it wasn’t profitable and now the same farmers would love to be in an SSSI because it guarantees Stewardship money. One for payment for public benefit !
Also, read ‘Wilding’ for a further example of unprofitable arable – which applies across much of the Wealden clay.
Roderick,there will always be some odd instances but the levels are quite fertile and doubt would be considered marginal but it is a fact that wheat will not be grown on marginal soils that are brought into cultivation it just would not be viable.
The important bit in the example was “Brought into cultivation”
It perhaps depends on exactly how you choose to define the word ‘marginal’ Dennis. It is pretty much undeniable that across the country lots of pieces of land that were not being used productively were brought into agricultural production (whether for arable or pasture) over the period under discussion and that the subsidy arrangements were a major factor in driving this.
Dennis, quite a lot of marginal land was ploughed up for arable – land that would never be viable as arable without subsidy. (same is true of most hill sheep farming but I digress…)
Just one example near my Kentish childhood home, a lovely bit of chalk grassland where as a small boy I used to go and pick primroses with my mother for the local OAP’s home. One year in the 70s or early 80s it was ploughed – so steep that they had to plough it up and down the hill. That winter it rained, of course, so all the soil washed down to block the road at the bottom, and they never got a crop off it. It’s scrub now, but he pocketed his subsidy while he could just the same. On the South Downs there are large areas still in cereals, not nearly as unsustainable as that example but which would still be marginal at best without subsidy.
This argument matters because successive UK Govts chose to implement the CAP in ways that promoted “efficiency” and private profit over the other motivations of supporting rural communities and landscapes. The rest of Europe made different choices. Sure, the CAP still has significant structural issues, but many of our particular CAP problems were homemade, and unless we recognise and correct that the same will be true of whatever post-Brexit system the Govt devises. It is a historic opportunity for change, but the forces opposing meaningful change remain highly influential.