There is a juggernaut called Brexit hurtling towards the UK right now, it’s lights are on full beam so it’s difficult to know if it’s bringing opportunities or risks. The likelihood is that it’s a bit of both, so that leaves you with a choice.
Do you think the opportunities outweigh the risks and therefore you just jump right on and enjoy the journey into the unknown? Or, do the risks outweigh the opportunities in which case you step out of the way and let it pass whilst avoiding getting sucked in by the downdraft. Nicola Sturgeon’s announcement of the Scottish Governments intention to seek a Section 30 order to hold a second independence referendum gives everyone in Scotland that choice.
From a farming perspective, it’s clear that every business decision we make includes an element of risk because of elements we cannot control. But we have experience built over generations into the riskiness of our business to inform us of whether a risk is worth taking or if we should rethink our strategy. For instance, with hill farming, the weather is the one of the biggest factors, so you wouldn’t risk running a herd of cross Jersey cows when you could opt for a Galloway or Luing; breeds which are eminently more suited to harsh conditions.
We know from that experience what would work and what would be financially ruinous. Barley or wheat, oats or neeps, dairy or suckler? All have benefits and risks, a combination of some or all may work or a specialisation in your own particular area could be your choice and how you make that work best for you is exactly that, your choice.
But, how much more challenging is it to plan when the status quo is no longer an option? How can informed choices decisions be made if you simply don’t know what is on the horizon? That was the running theme of the Better Together argument in 2014, vote No for certainty, vote Yes for uncertainty and avoidable risk.
Neither option is available now. What we have to must rely on is the track record of the people arguing the case to stick with the UK for the union, or we can choose to make our own decisions through our democratically elected, independent Scottish Government. The only guide we have is past experiences and to listen to the conversations that are being had in respect of our industry, and draw some conclusions from there.
“It would make so much more sense if those with the big fields do the sheep and those with the hill farms do the butterflies.”
Andrea Leadsom, Secretary of State for Department for Environment, Food & Rural Affairs (DEFRA) in UK Conservative Government.
George Eustice, the DEFRA Minister, has stated the UK Government will scrap direct support and replace Pillar 1* payments with something more in line with environmental demands and paying insurance. So what does that mean?
It means that with the framework and funding we are currently heading towards, the Scottish farming industry will be in trouble. Our land is 85% Less Favoured Area (LFA), of which 98% is severely disadvantaged and this means that Scotland’s land needs extra support, whilst in England their land is only 20% LFA. With that in mind you may think it’s understandable that the UK Government have different priorities when it comes to what agriculture needs.
It is clear we need a completely different support system designed round Scotland’s needs, and a guarantee of long term support until our agriculture can be self sufficient. That won’t happen by 2020.
What is equally clear is that Westminster are planning a UK wide policy on agriculture and intend to retain the legislative authority and spending post Brexit, rather than repatriating those powers to Holyrood where they currently lie.
So even if Westminster does continue with some type of scheme, which most likely will be ‘Barnetised’, it means that Scotland will receive approximately half the amount of funding it currently derives from the EU – currently 16% of the UK’s agricultural support comes to Scotland.
The real value for Scottish farming food and drink is our reputation and provenance on which we can command a premium because the Scottish brand is recognised for its outstanding quality in the global market. Scotch beef, lamb and pork are currently protected under Protected Geographical Indicator or PGI which is an EU protection for produce such as champagne, Stornaway black pudding or Arbroath smokies. Therefore it’s very worrying that during the Canada European Trade Agreement signed recently, the UK did not demand Protected Geographical Indication (PGI) status for any food and drink product.
Given the value of food and drink exports and the esteem Scotch beef and lamb are held in worldwide, that should cause alarm bells across the industry.
We also have the real prospect of no longer being in the EU single market where 41% of our food and drink exports go. If we carry on down the road we are on, we will be relying on a UK Government who are taking us out of the single market, who believe that direct support must be scrapped, who will give no guarantee of any support other than mitigation post 2020, put no PGI requests in for the Comprehensive Economic and Trade Agreement (CETA) deal, and to this day refuse to repay our convergence uplift money. If we are going on track records that’s not an appealing prospect for Scottish farming.
Compare that to the Scottish Government who have helped to make our food and drink industry the fastest growing sector in our economy and only recently announced even more ambitious plans to make it worth 30 billion pounds by 2030.
They have given a firm commitment to find ways to share that success right down the supply chain to include farmers and producers. And while some criticism can be levelled at the Scottish Government for the delays in farm subsidy payments, it should be remembered that they actually got money into the system to mitigate against the hardship caused by the computer failure*.
When exactly the same thing happened in 2006 in England, DEFRA left some farmers for up to two years and the government didn’t lift a finger to help. They also had the head of DEFRA in front of a parliamentary enquiry in the autumn of last year demanding to know that why 10 years after implementation they still could not get the payments out on time.
So we have a clear choice presented to us by Nicola Sturgeon if Theresa May refuses to negotiate the deal that Scotland’s farmers need post Brexit.
We can either hope that Theresa May delivers a strategy and a set of policies that will take into account our unique challenges, pay us our convergence money and market our Scottish brand the world over. We can also hope that the Westminster drive for cheap food for the domestic market means they support us in maintaining our world class standards rather than opening the floodgates to lower standard cheap imports.
Or we can be assured that the race to the bottom in standards will not be tolerated, and that our agricultural industry and all its threads are valued for future generations to come.
*1 Payments to farmers are made under 2 schemes, the first is Pillar 1 and gives a direct payment to farmers for farming. It used to be called the Single Farm Payment, but the recently changed system is called the Basic Payment Scheme. These payments are made on the basis of the area of land that is farmed can be claimed on as long as you can demonstrate ” farming activity” . It’s not ideal but it ensures direct payments are made without breaking any WTO rules on subsidising agricultural production. The second type and a much smaller proportion of funding is Pillar 2, these are payments made for environmental protections or rural development, and are usually competitive.
*2 The computer system could not cope with the complexity of the new system and timescale for delivery of funds which left some farmers waiting too long for their Basic Payment Scheme (BPS). However, the government gave loans, interest free until payments were processed.