Nobody really has a clue what’s happening to farming over the next few years, and that obviously includes DEFRA.
This document, according to ministers, represents the most fundamental shift in farming policy for over 50 years (but the details are so unclear it would be difficult to write them on the side of a barn, bus or bucket). Despite this policy applying to c70% of England it gets little more than vague coverage by the media, probably because it gets little more than vague coverage by DEFRA.
Yesterday’s announcement was nothing more than a reannouncement of what we were told over two years ago (and frequently since) that the basis for public financial support for English farming is shifting from the Byzantine complexity of the Common Agricultural Policy (with its mixture of subsidy and voluntary environmental schemes) to a completely different system of less subsidy and different environmental schemes.
The fact is, that since we don’t know what the Brexit deal is (and obviously there is plenty of time, plenty of time, to work that out (ie there are days left)), we can’t be very sure about our go-it-alone future.
Imagine you are a farmer (some of you are) then read this document and start planning for the great new future..? How?
Well, you can see how your Basic Payment Scheme money is going to go – literally go. Whatever you are getting now, you won’t get any of it in 2028. Your payments will fall as follows, this table shows the first four years of reductions in bands (which you can think of in terms of being like income tax bands, where the top bits of your income get taxed at a higher rate than the lower bits) as follows:
If DEFRA had carried this table on to 2028, the figure in all rows of the right hand column would be 100% – all gone. What it means for your total payments, adding up the impacts across bands is:
This represents a massive change in the status quo and is completely in line with Conservative policy of free competition and a small state. It is dogmatically pure; the State will no longer (in 2028) subsidise the industry of farming .
Instead, your money will be rechannelled into environmental grants to deliver public goods. This is where everything gets a bit hazy as the details of those schemes are being worked on so, as a farmer, you can see how your subsidies will disappear but not so easily how you get any of that money back through environmental grants.
And environmental grants are for doing things – planting trees, having loads of carbon in your soil, reducing flood risk etc (those public goods) and doing things costs money. What we know about the basis for the grants is that they will be based on an ‘income-foregone’ principle, such that you get paid for the farm income you are foregoing by producing environmental good things.
From the farmers’ points of view, income foregone means that to ‘get back’ the subsidy you have lost, you have to lose some more farming income and you get paid for that lost income. How that works, and how you will game the system, will depend on how accommodating the details of the scheme will be and we don’t know that yet.
From the taxpayers’ points of view, our money will go into farming in a new way that should deliver great environmental benefits, but how that works, and how farmers will game the system, will depend on how rigorous the details of the scheme will be and we don’t know that yet.
So the future of farming is unclear. This is a massive experiment – you can’t say that it is anything else. Will farmers flock to the new environmental scheme or not? And those who do, will their actions produce great environmental gains, or not?
Neither the industry that is being reformed, nor the taxpayer paying for the reform, will have a clue what will happen and so much depends on the details. DEFRA hasn’t had much of a stab at the vision thing in this document and nor has it come up with the details.
As a farmer, you don’t know the basis on which your products will be traded in future and you don’t know the basis on which food will be imported in future. You do know that the hand-outs to which you have become so accustomed over decades are disappearing but you don’t know much about the environmental schemes that are coming in. We talk of uncertain times but, for farmers in England, these are very uncertain times.
The taxpayer isn’t, it seems, getting any of our money back (eg to spend on nurses’ pay) and we don’t know what environmental outcomes are going to be produced instead.
We leave the Transition Period on 31 December but farming will be in transition for years. In a decade things will be very different in ways that are unclear right now. No wonder the view on the cover is all a bit hazy… (and particularly the further up the hill you go).