Food price rises likely as we leave EU

A letter in this week’s Chronicle says that Brexit will mean cheaper food but in reality this is far from clear (even before the pound’s current collapse), if not unlikely.

Since 1973 farmers have received subsidies through the Common Agricultural Policy. Now we’re leaving the EU, the cash will be reduced. Government policy adviser George Freeman told the Tory conference last week that farmers would not receive the same £3bn subsidy that the EU pays. Perhaps remembering the fictitious slogan on Boris’s Brexit battle bus, he said the public might wonder why grants were going to farmers when the NHS needed cash.

Some money will be paid to farmers but the basis of this payment will change. Most EU subsidies are based on land farmed, and smaller sums go to farmers who produce less by leaving field margins fallow for wildlife.

The National Trust hit the headlines earlier this year when it said butterflies should be subsidised ahead of food production, but it may also have hit the nail on the head.

The National Trust says 60% of species have declined in the UK and 31% “strongly” declined. The RSPB says 60% of farmland birds have gone. A lot of this decline is due to changes in landscape, as farmers go for larger fields devoted to single crops, farmed more intensively: habitats have been lost, soils become depleted and fertility reduced. The biggest farms receive the biggest subsidies but often do the most harm to the environment.

Farmers Guardian recently pointed out that the UK had a strong environmental lobby. How strong can be seen by the fact that 84 food, farming and conservation groups wrote to PM Theresa May saying that birds, wildlife and waterways should come first when new payments for farmers were considered. It seems likely that subsidies paid to farmers post–Brexit will be linked closely to environmental responsibilities, which means lower production and thus higher costs.

The obvious flaw in that is that supermarkets could import cheap food from abroad (the falling pound permitting), so it is likely that restrictions will be placed on cheaper imports that do not adhere to UK standards — cheaper food will be kept out.

How the new system will work is anyone’s guess. The National Trust calls itself the country’s biggest farmer and says it already has good practice but the fact that other big landowners — the Duke of Westminster and the Prince of Wales — receive millions of pounds in EU subsidies may not go down well in a post- Brexit world. It is possible that the new system could swing subsidies towards small farmers.

The National Trust’s director-general, Helen Ghosh, says that people will generally be behind the change, and that farmers should be paid for things the market won’t pay for “but are valued by the public,” which seems to mean that food will not be subsidised but good practice will.

No doubt people with more expertise might disagree but even farmers, usually as astute a class of people as you come across, are probably scratching their heads.

Milk producers, always in the news with their demands for better prices, are hoping to be paid 30p a litre for milk by Christmas, according to Farmers For Action chairman David Handley, quoted in Farmers Guardian.

But as interesting was his comment to farmers, saying that “they needed to have a greater understanding of supply and demand issues,” suggesting that, even now, some milk producers — of whom one a day goes out of business — struggle to get on top of the system.

In a debate in the House of Lords, the bishop of St Albans commented: “In the 70s, agricultural colleges taught farm managers the importance of the diversity of crops and the use of livestock to enrich crop rotation, but since then farmers have been forced to concentrate on economic survival rather than care of their land.

“Pesticides are nasty, produce the cheap food that the public wants (but) are one of many factors that are damaging our wildlife. All factors must be considered if butterflies are to be saved, but there are no easy solutions to this problem.”

It’s perhaps safe to say that in the post- Brexit world, cheaper food will not be one of those solutions.

 

 

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