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Features

How Brexit would affect British farmers

Yes, they depend on EU subsidies. But the results of leaving the CAP could be surprising

27 February 2016

9:00 AM

27 February 2016

9:00 AM

If the Church of England was once the Tory party at prayer, then the nation’s shotgun-owning farmers were the party’s armed wing. I grew up on a farm in the Yorkshire Dales and must have been about 18 before I met someone who didn’t identify as TBC (True Blue Conservative). Ours was one of the safest Tory seats in the country, with the local MP being Leon Brittan and then William Hague. And Margaret Thatcher was considered a hero in our ‘community’ not because of the Falklands war or her defeat of Arthur Scargill but because she liked to greet the dawn by listening to Farming Today on Radio 4 (true).

But the Brexit debate is leaving our True Blue farmers deeply conflicted. On the one hand, without EU subsidies, many of them would go out of business. On the other, their Tory instincts tell them that subsidies are a socialist idea, the opposite of free trade, and therefore plain wrong. Until now, their approach has been to avoid examining their consciences too closely, because it’s not their fault if their counterparts in other EU countries, especially France, represent such an aggressive and powerful lobby.

And it’s not their fault either that a staggering 40 per cent of the EU budget is spunked away on the Common Agricultural Policy, that ingenious device for reducing Europe’s reliance on imported food and drink by first overproducing — those notorious grain mountains and wine lakes — and then underproducing: the equally notorious ‘set aside’ of land, in which farmers were paid not to farm. David Cameron tried to include reform of the CAP in his ‘new settlement’ the other day, but the other EU leaders just stared at him as if he were mad. Some things are sacrosanct.

It’s not even the farmers’ fault that they need subsidies to survive — it’s the fault of Britain’s supermarkets, which fight for market share by keeping food prices artificially low. How do they manage that? They simply pass on the cost to the farmers. A litre of milk, for example, costs a farmer about 30p to produce, but the supermarkets pay him (it’s usually a him) an average of 23p. This is why the number of dairy farmers has halved in the past decade, from 20,000 to 10,000, and why 2,000 more are expected to go bust this year.

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Unlike France’s militant farmers, British farmers have very little clout. To our politicians, in fact, they are pretty much an irrelevance — after all, 80 per cent of voters live in towns and cities. But no other industry is going to feel the impact of a decision to remain or leave quite as keenly as British agriculture. If we leave, indeed, it will represent the biggest upheaval for farming since the repeal of the corn laws in 1846.

And this matters to all of us because of what is euphemistically called ‘food security’. Now, you might argue that it’s been a long time since our island was nearly starved out by a U-boat blockade, and however unpredictable and bellicose Putin may be, it’s not as if he’s some latterday Hitler annexing his neighbours and testing our resolve by flying his bombers over our airspace. You might even argue that even if Putin did blockade us, we could just dig for victory again. There may be about 20 million more mouths to feed now compared with 1942, but surely we’d manage, and the new ‘Garden Front’ could start with an allotment in Downing Street…

Well, quite. So should we vote ‘remain’ if we want to protect our food security? Not necessarily. Consider the question of whether the EU will punish us for leaving, with tariffs depressing prices for UK farmers. It’s possible, but the EU needs us more than we need them. We have a huge trading deficit with the EU and almost half of it, £32 billion, is with Germany. They are desperate for us to keep buying their cars and white goods, so maybe we shouldn’t panic too much on that score.

And how unknown will the unknown we are leaping into actually be? It is known, for example, that we would finally be allowed to negotiate our own trade agreements with non-EU countries, because Iceland does this already, most successfully. Already 60 per cent of our trade is with countries outside the EU, and British farmers will become more competitive in their dealings with them if they are no longer tied down by EU red tape. But from the farmers’ perspective, these are secondary issues. What matters more to them in the short term is being able to stay in business, and they won’t be able to do that without subsidies. This is where Westminster will have to step in, if it is serious about food security.

The weird thing is, it would make financial sense. Just to continue paying farmers the same subsidy as they are getting now would cost the British taxpayer half as much, because, at present, we pay £6 billion a year into the CAP, but our farmers get only £3 billion back. British farmers are effectively subsidising their competitors: the French, by far the biggest beneficiary of the CAP, receive three times as much.

I know it’s considered bad form to guess what Maggie’s position would be if she were still alive, but I reckon she would like the sound of that.

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