The Bruges Group spearheaded the intellectual battle to win a vote to leave the European Union and, above all, against the emergence of a centralised EU state.

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4 minutes reading time (751 words)

The Future is Another Country: Brexit, CAP and the Future of British Agriculture

A Brexit-driven reconfiguration of the UK’s food and agricultural sector suggests that a period of significant transformation lies ahead; but if mapped successfully, can be a positive one.

Richard Ferguson

21st June 2017

The possibility of a Brexit-driven reconfiguration of the UK’s food and agricultural sector suggests that a period of significant transformation and structural adjustment lies ahead. Set against an industry already in the midst of rapid technological displacement, value-chain disruption and regulatory change, a transformative event such as Brexit appears to add to existing uncertainty.


However, while the potential institutional, financial and operating frameworks that will arise from Brexit suggest a wide range of possible outcomes, the process, if mapped successfully, can be a positive one. The UK’s current position is not unique. In the 1980s, the government of New Zealand instigated a reform programme to transform the country’s food and agriculture sector, the results of which were immediate and painful as well as long-term and beneficial.


At the core of the transformation that shook New Zealand’s agriculture sector in the 1980s and 1990s was a pressing need to access new markets in the face of external economic shocks and structural adjustments, such as the UK’s decision to join the then European Economic Community (EEC) in 1973. While there are obvious direct parallels between the New Zealand case study and Brexit, both situations remain distinct and unique. The first section of this report “The past is another country” considers the New Zealand experience and argues that an agenda focused on long-term goals can deliver significant economic and social benefits, but may come with considerable short-term costs. The battle about to commence is set to be as brutal, complex and ideological as that which determined the direction of the British economy in the late-1970s and early 1980s.

 

The second part of this report “The here and now” considers the Common Agriculture Policy (CAP), the defining policy feature of the UK’s agriculture landscape over the past few decades. The design of any new policy-making framework has to begin with some macro considerations, not least: how relevant is a subsidy-based system of payments in the modern era? Moreover, what is the relevance of food security in a country with a structural trade deficit in food? We must also consider to what extent environmental considerations should influence the policy-making agenda. What is the role of government in terms of regulation, environmental compliance, bio-security and food trust? Alternatively, can a free-market, liberalisation agenda deliver wider social, political and environmental objectives as well as economic goals? Can the UK use its fledgling – and flourishing – agtech knowhow to raise productivity, build exports and deliver value added to the British economy?

 

The third part of this report “The future is another country” peers into the future, and presents some innovative and strategic thoughts. As a study it is neither exhaustive nor academic, but it does cover many of the key and very real issues that come up time and again in our daily work with clients. It simply considers some of the strategic directions that the UK should consider if it wishes its food and agriculture sector to prosper. A global imperative is: how do we feed a world of 10bn people within a generation when its current needs are delivered by an army of unsophisticated and undercapitalised smallholders? We contend that the Department for the Environment, Food & Rural Affairs (DEFRA) and the Department for International Development (DFID) need to shift their respective – and parallel – focuses on agriculture subsidies and development aid to collude with the Department for International Trade (DIT) and the Foreign & Commonwealth Office (FCO) to bring much of the UK’s technological, commercial, developmental and diplomatic ambitions in food and agriculture under a joint strategy.

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Tuesday, 25 September 2018