+44 (0)20 7799 6677

Paul Brannen MEP: Farming is served best by staying in the EU

Jonathan Lindsell, 11 March 2016

Of all the sectors in the European Union economy, it is farming that is in receipt of a level of subsidy others could only dream of. Despite falling as an overall percentage of the EU budget in recent years, the Common Agricultural Policy (CAP) still remains the single largest item in the budget.

UK farmers are recipients of this largess in just the same way as their French, or Polish or Irish counterparts, and as a subsidy regime, the CAP provides 3 billion euros a year in direct support to UK farmers, topped up with 5.2 billion euros in rural development funds for investments and rural jobs up to 2020.

If the UK were to leave the EU, we do not know what the government would replace the CAP with, and nor do we know if we would be able to negotiate access to the EU’s single market. This puts UK farmers – and particularly those struggling amid volatile market prices – at a serious disadvantage, by stifling investments and reducing business confidence for as long as the uncertainty surrounding the in/out vote continues.

According to Agra Europe, a UK-based agricultural consultancy, only 10% of the most efficient UK farmers would survive in their current form once CAP subsidies are removed. CAP subsidies currently provide 50-60% of UK farm income. The UK government has no contingency plan for what happens in the event of a leave vote, and this means a leave vote would be leap in the dark.

Recently, capital markets’ analysts have shed new light on the potential consequences following a UK exit from the EU, pointing at the dynamics of farmland prices and the value of farmland investments linked to CAP subsidies. Since the value of the most attractive farmland is largely immune to cuts in direct financial support, a possible leave scenario would likely pitch farmland-rich arable farmers against those tending livestock or farming on less favoured areas (LFAs). According to the Financial Times, dairy, beef and sheep farmers, already hit hard by market volatility and prolonged price slumps, are likely to suffer the most in case of a drop in support of approximately 95 euros per hectare.

But, from the farming point of view, the EU is not only about the CAP. UK farmers also enjoy the benefits of trade and the free flow of labour. Consideration also needs to be given to the fact that UK agriculture in general, and its horticulture sector in particular, remains heavily reliant on migrant seasonal labour, mostly from other parts of the EU, especially at harvest time.

My party, Labour, is convinced that the UK should remain in the EU. Our strong representation in the European institutions helping manage the CAP and the single market can help secure us positive reforms and bring about a better deal for British and Northern Irish farmers.  In turn, a reformed CAP will help ensure sustainable food production, preservation of our rural environment and help support the incomes of disadvantaged rural communities.

Paul Brannen MEP is Labour’s spokesman on agriculture, forestry & rural development in the European Parliament. He represents the North East.

Add your comments to the debate here