Leaving the EU: Upland Farming

Debate between John Lamont and Jonathan Edwards

Tuesday 26th June 2018 Westminster Hall

[Jonathan Edwards]

I am grateful for your guidance, Mr Pritchard. I will return to the issue at hand, Welsh farming.

In Wales, the situation has been compounded by the decision of the Labour Government of my country to reduce direct payments to producers by 15% by moving money from pillar 1. However, the point remains that CAP payments offer a degree of stability. While previously, under CAP, farmers did not have to worry overtly about the impact of Westminster elections on the amount of agricultural support they would receive, they could easily now face a situation in which a new Westminster Government could radically alter agricultural support policy. As we see from the power grab, the Labour Government of my country have abdicated all responsibility.

[John Lamont (Berwickshire, Roxburgh and Selkirk) (Con)]

Will the hon. Gentleman give way?

[Jonathan Edwards]

I will not give way. I will carry on, mindful of what the Chairman has said. While the British Government have promised to protect the current UK level of EU payments until 2022, the reality is that once we have left the EU, agricultural support will become an annual issue for the budget, or at the very best a three-year cycle under a future comprehensive spending review. There is no guarantee that current levels of funding for Wales will continue after March 2019.

We urgently need clarity for Welsh hill farmers, particularly about what the budget for agricultural support will be and how exactly it will be administered. Now that agricultural support has been re-reserved, I would be grateful if the Minister could outline how it will work for Welsh hill farmers. Will the Welsh share of agricultural support be based on our agricultural footprint, or do the British Government intend to distribute funds for Wales, Scotland and Northern Ireland based on Barnett consequentials?

During the referendum, the leave campaign argued that farmers would receive a dividend post-Brexit, because the UK would no longer have to make contributions to the EU budget. However, the reality is that there will be less money for Government investment post-Brexit, because the economy will slow and revenues will subsequently be less. Agriculture could find itself way down a long list of priorities for Westminster. Will the Minister outline what intergovernmental discussions have been held between the UK and the devolved Governments, and where exactly we are on getting clarity on the vital issue of agricultural support?

The third major issue is access to export markets. The European Union is a vital market for Welsh meat. Hill farmers inform me that approximately half of all their lambs are exported to the EU on a frictionless, zero-tariff basis, and 90% of all Welsh meat exports are destined for the EU. The EU is the largest global market for agricultural produce, and while the rest of the world is doing everything possible to get access to that market, the British Government are moving in the opposite direction. Preserving those markets is vital. It is sobering that some of the highest new tariffs are agricultural. The lowest that tariffs on lamb can be under WTO rules is 40%, and they are far higher if the product is frozen or processed in any way.

Admittedly, a comprehensive trade agreement with the EU could solve the problem, but while the British Government continue to maintain that no deal is an option, those of us who have concerns about the British Government’s negotiating strategy cannot be accused of scaremongering. We only have to look back to the chaos caused by foot and mouth. There was a collapse in market prices, a collapse in farm incomes and a host of other problems, all because farmers could not export to the EU. Impacts on upland farms were particularly acute. While such circumstances occurred due to a ban on exports rather than trade barriers, such impacts are worth bearing in mind when we consider the potential impacts of harder Brexit scenarios.

Now is the time to commit to maintaining tariff-free access to the UK’s largest trading bloc through our membership of the EU single market and customs union. That would ensure that our food producers could continue to export tariff free, that there would be no other barriers to trade and that already established, complex supply chains were not disrupted. The Farmers Union of Wales agrees. The president of the union, Glyn Roberts, said:

“Since the Referendum we have maintained that we should remain within the Single Market and Customs Union, and every day that passes brings more evidence supporting our view that at least in the short term, leaving these institutions would be a grave mistake.”

Our farmers are proud of the standard of their produce. They have some of the highest environmental and welfare standards in the world. If the British Government insist on dragging us out of the EU single market and customs union and pursuing free trade deals with third countries, it is vital that those standards are not compromised in any way, and that our markets are not opened up to substandard produce. It is essential that such matters are not regarded as exclusively within the remit of the UK Government and Parliament. As Hybu Cig Cymru chairman Kevin Roberts has said,

“Any future trade deal must take full account of the needs of the Welsh red meat sector.”

Ultimately, any future trade deal must be fully endorsed by the National Assembly, the Scottish Parliament and the Northern Ireland Assembly.

To close, agriculture, due to its complex supply chains and its prevalence in Welsh culture, is the backbone of the rural economy. It is vital, therefore, that the UK and Welsh Governments should do all they can to ensure its sustainability and success into the future. As the director of NFU Cymru, John Mercer, told me,

“Farmers were promised a bright and prosperous future after Brexit and it is now imperative that those political promises are upheld.”

Welsh hill farmers potentially face a perfect storm of hindered access to their main export markets and the opening up of the UK domestic food market to lowerstandard food produce. Policy makers cannot afford to get it wrong. With the clock ticking, it is time for Ministers to start coming up with some answers.