Matthew Lynn

Boris must stand up to farmers – and back the Australia trade deal

Boris must stand up to farmers – and back the Australia trade deal
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Farms will be devastated. The countryside will be ruined. And we will all be forced to eat weird food that will probably kill us. As the government tries to finalise a free trade deal with Australia, there are already reports of fierce rows over the future of agriculture played out against a backdrop of a angry backlash from the farming lobby. 

It's time for the government so face up to these critics. True, farming is not crucial to the future of the British economy, and neither, as it happens, is trade with Australia. But the principle is important – and if the UK doesn’t embrace free trade then leaving the EU will hardly have been worth the bother. 

The UK’s trade deal with Australia could be finalised before the summer is over. It should remove all tariffs and quotas between the two countries, create a measure of free movement for people; and, most importantly, create a template for similar deals across the Pacific. 

There is one snag, however. Australia produces lots and lots of high quality beef and lamb, usually very cheaply. Our farmers have been shielded by punitive EU tariffs for half a century. Expose them suddenly to free competition, and they could be wiped out.

Over the next few weeks, we can expect to hear plenty of arguments against the deal. We will be lectured on how trade with Australia is worth only a fraction of a percentage point on GDP, and will be far less than the damage done to our farming industry. We will hear lots about safety standards (just wait until Jamie Oliver gets involved) and even more about the potential knock-on impact on the countryside. Some hardcore remainers will egg on the arguments, suddenly discovering as much of a passion for Welsh sheep farmers as they already professed for the Nissan workers making family SUVs up in Sunderland.

Yet this is too important a battle for the government to make any concessions here. The reality is that agriculture was already ridiculously protected within the EU. Imports were more or less banned, and prices kept artificially high, mainly to protect French agri-business. No one ever seriously pretended the EU’s agricultural policies benefited the UK: in fact, we spent forty years trying, and mostly failing, to reform the CAP. After we left, we were always going to go back to the more liberal regime we enjoyed before we left. Sure, that may mean some changes to the way farming is organised, and paid for. But that doesn’t mean it will be worse.

The solution is very simple. Outside of the EU, we should buy whatever food people want on the global market, so long as it meets safety and animal welfare standards (which Australian farms definitely do). If we want to subsidise farmers for maintaining the landscape, we can do that separately. At the end of the process, we will have a more carefully maintained countryside, and cheaper food, and the wider economy will benefit from all the free trade deals we will be able to do with countries that are more competitive at farming than we are. 

In truth, the UK opted for free trade in agriculture when it repealed the corn laws more than 150 years ago. There is no point in going back on that now.

Written byMatthew Lynn

Matthew Lynn is a financial columnist and author of ‘Bust: Greece, The Euro and The Sovereign Debt Crisis’ and ‘The Long Depression: The Slump of 2008 to 2031’

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