Baroness Scott: How to create a more resilient agricultural sector post-Brexit
3 min read
Former Chair of the House of Lords EU Energy & Environment Sub Committee writes following a debate this week on the Committee's recent report 'Responding to price volatility: creating a more resilient agricultural sector'.
An inquiry originally intended to focus on the issue of price volatility in agriculture resulted in a much broader look at modern farming, and conclusions which, although written pre June 23rd, have as much relevance now as then.
To our surprise we found that once you take out weather related events and the impact of political decisions such as the Russian embargo, agricultural price volatility is no more significant today than it has been in recent decades. Farmers on the whole make good use of insurance for the first, although we noted that such events are more frequent. Politicians, currently at EU level, do seek to address the second through specific financial aid. The UK Government's new tax averaging proposals are welcome, and we urge them to go further, looking at deposit schemes of the sort found in Canada and Australia.
We looked at a wider application of insurance schemes, along the lines of the US model, but were unconvinced. The evidence we received suggested that they are costly to the tax payer and do not relate to wider policy objectives such as environmental protection and rural economic development.
The real challenge currently is in an unusually long period of low prices and the lack of resilience in much of the sector. We found that data sharing and information flow is patchy, business and financial planning skills under-developed. Many farmers do not have a full understanding of their production costs and how to reduce them. Innovation, we concluded, is vital, but underused and need attention through the Government's agritech strategy. We heard evidence that younger farmers are often frustrated in their efforts to introduce new practices, so we urge the Government to consider barriers to allow older farmers to exit the sector as well as encouraging new entrants.
We note that around 50% of farm incomes come from the CAP, and recommended much clearer links between payments from the public purse and the delivery of public goods, leading eventually to a merger of the two 'pillars' of EU funds. This thinking holds good in a post referendum UK – although I note here that we don't yet know how repatriation of agriculture from the EU will be organised in a devolved environment. Any Government seeking to replace that level of support will need to convince the public of its value and that means much more explicit links with public goods such as food security and quality, animal welfare, and sustainable land management.
Baroness Scott of Needham Market is former chair of the House of Lords EU Energy and Environment Sub Committee. She is a Liberal Democrat peer.
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