I’ve explained (in oh so broad terms!) how we got to where we are with European Agriculture Policy (see here). This blog is about what’s wrong with the current position.
Public policy tends to evolve through tweaks and reform rather than by massive change, and the pace of reform is bound to be slow when there are many players involved and they have different perspectives and needs. Thus, it is not surprising that the changes to the CAP have been so slow that almost everyone feels that they haven’t gone far enough – it’s just that different EU Member States and individuals in those Member States wish we’d got to different positions by now.
Brexit gives the UK a chance to develop its own agriculture policies – it is one of the best potential examples of how we really can start from almost scratch and build on what we have learned over the years to come up with our own bespoke system that works for the UK economy, the UK people and the UK environment.
What’s wrong with the current CAP?
Well, the answer to that question depends on who you are. Farmers, overwhelmingly the main recipients of CAP funds, tend to moan about the forms that they have to fill in to get the money, the inefficiencies of the implementation of the system, and the lack of enough money but this can generally be written off as simple ingratitude.
The average man or woman in the street won’t have very strong views about the CAP – they won’t understand it but may have picked up from somewhere that it isn’t great and it’s all the fault of people in Brussels.
Let’s put ourselves in the position of a civil servant, a neutral, informed policy person, who is given the chance to write a new agriculture policy ahead of Brexit. What might they think?
- it’s a lot of money! The CAP is c40% of the EU budget (and yet most Brits are quite clueless about it) and c£3bn per annum of it goes to land managers in the UK. Because the UK is a nett donor to the overall EU budget this means that we should be able to spend at least £3bn per annum on agriculture after Brexit (if we want to). Maybe we could spend some of that money on the NHS, education, HS2 or Trident missiles instead of on farming?
- most of current CAP spend is in income support to farmers, with hardly any strings attached (apart from not breaking the law). The biggest land owners get most of the money. This means that poor people who pay their taxes are handing over their money (via The Treasury, the EU Commission, back to The Treasury and then to Defra (or your favourite devolved administration)) to some of the wealthiest land owners in the UK (such as the Duke of Westminster) . This might not be how one would design a scheme if starting from a blank sheet of paper.
- income support from CAP inflates land prices. If your land comes with an annual cheque from the government then it is worth more than if it doesn’t. High land prices feed through into house prices and other issues.
- income support stifles efficiency. If the largest component of your income is that annual large cheque from government (which will be true of many upland farmers for example) then adding 10% to the farmed income part of your bank balance may seem a bit of a waste of time. Income support allows inefficient farmers to remain in farming.
- income support does set farming in aspic to some extent, and in some places that doesn’t seem such a bad thing. Do you want lots of upland farmers to go out of business and sell up to an ultra-efficient sheep-ranching outfit that will ‘improve’ the flower-rich pastures that hang on through the current farmer’s lack of entrepreneurial dynamism?
- income support goes to just about all landowners – not just ‘proper’ farmers. So, the RSPB, Wildlife Trusts and National Trusts are major beneficiaries of this scheme. Just about any land that has agricultural value gets the income support – some nature reserves are farmed in some ways but that can hardly be said to be their major function. And similarly (in a strange sort of way) grouse moors attract the same subsidies even though the agricultural role they play may be utterly trivial.
- environmental grants are voluntary and time-limited – their benefits depend on who participates and how long they stay the course.
- environmental grants haven’t worked very well – their results have been patchy. This might be because we let the farmers have too much say in their design or it might be that voluntary schemes only attract the already-converted so we end up paying for what we were getting for nothing anyway and not getting much more.
- environmental grants amount to leasing environmental benefits – after the period of a scheme a land owner can leave the scheme and undo all or most of the benefits that have been paid for. This matters less if new entrants to the schemes can be found except that the biggest benefits probably come from long term commitment.
- existing environmental schemes have tended to focus on wildlife and there may be other things that we want to support instead or as well.
Standing back a bit, this could be summaried as: despite reforms, the CAP is still expensive, market-distorting, environmentally damaging and bad value for the general public.
But can we do better?
Michael Gove’s starter for 10 was published last week, in outline, and, as expected (and actually as promised) it states that income support payments will disappear and the basis for public payments to land owners will be on the basis of the delivery of public goods.
What are public goods? I’ll come back to that on Friday as I’m pretty sure that this will become another term (like sustainability) that gets bent out of shape by various interest groups over time.
But, let’s just say, that the outline of the Agriculture Bill signals a massive change for agriculture and a change in the relationship between farming and the public. It’s quite exciting – but just because it could be fantastic doesn’t mean that it will be. It could be awful, but it may not be that either. There is a lot to play for.