Farming: Impact of Brexit

Earl of Sandwich Excerpts

Thursday 21st July 2016 Lords Chamber

[The Earl of Sandwich (CB)]

My Lords, I congratulate the noble Baroness on achieving a second debate so soon. Her career in another place included five years as chair of the EFRA Select Committee. I also remember her interest in Africa.

I live in west Dorset, where my wife and I manage a small agricultural estate, and have done for 30 years, depending on CAP direct and environmental payments. We are surrounded by farming families who have been on the same land for generations and who look at the new political landscape with great misgivings. As we have heard, everyone longs for the uncertainty to end.

I voted to stay in the EU and I believe that many leavers, including farmers where I live, voted out without fully realising the consequences. Many families were divided, but the majority were leavers. Generally, I think there has been considerable dismay among farmers since Brexit simply because of the threat to their farm payments. The new Secretary of State will have to persuade the Chancellor that smaller farmers and hill farmers will not be able to carry on unless they are given stronger reassurances of support. Owen Paterson said at the recent Oxford Farming Conference that,

“a sovereign UK Government, no longer constrained by EU rules, could actually increase rural payments”.

Leavers have argued that the UK should now be free to make its own trading arrangements with the EU and other countries that require our exports. Canada and Australia are often mentioned, even though they are themselves food exporters and will obviously gain from free trade agreements.

Red tape has just been mentioned. Leavers say, with some reason, that we will be able to remove unnecessary regulations while keeping those deemed necessary to maintain standards. On labour regulation, we will fall back on the seasonal agricultural workers scheme, although, as the noble Baroness mentioned, that has its own problems. Even Commissioner Phil Hogan claimed at Oxford that EU rules were too complicated and that he wanted to cut red tape or “reduce administrative burdens”, as the EU put it. But he also argued that the CAP had provided stability and was the foundation for economic growth and jobs in rural areas. The UK, like Norway and Switzerland, would have to renegotiate its relations with the EU, but it would still be bound by a large percentage of EU law without having any representation in negotiations or votes in the European Parliament.

What is clear is that this situation is unprecedented: the EU has never negotiated an exit agreement with one of its members before. The size of the UK market—62% of our total agrifood exports and 70% of our imports—requires a unique, new agreement to satisfy both sides.

In 2013, farmers received €2.6 billion under Pillar 1 and €637 million for agri-environment and rural development under “green” Pillar 2. How will HMG ensure that British farmers continue to receive these payments? We have already heard that they may not. There are fears that direct payments will be significantly less under the new Government because of the continuing need for austerity. Perhaps the Minister will clarify that. He may not know the answer yet but he will know that farmers will have to receive this level of support or the whole fabric of rural society and the countryside will collapse—we heard of the situation in Wales. The Minister could at least say that the Government will know the answer when we return in September or within a few months.

Another major worry I have picked up from the NFU in Dorset is about disease control. Now that the UK is leaving the EU, farmers fear that trade barriers will be put up against TB, which remains a scourge of West Country farmers. While the jury may still be out, farmers directly affected will want a much tougher line from this Government.

The fluctuating milk price is a continual source of grievance, and there is wide disparity between farmers supplying milk to supermarkets at 30p a pint, or close to it, and others sending milk to companies like Arla for processed milk products with a price for ever in the low 20s. This is the result of oversupply worldwide and I will not go into it now. The EU has helped with emergency payments, but can we assume that this Government, outside the EU, will do any better? I am grateful to the CLA for providing us with these facts and figures, and also to the NFU in Dorset for its advice to me.

Incidentally, forestry is always ignored. It has been mentioned once today. Could the Minister give us some more reassurance on that?