This post is by the Rt Hon Dame Caroline Spelman MP, second church estates commissioner and former secretary of state for environment, food and rural affairs.
The UK agriculture sector has always sought to provide good quality food at a reasonable price, which is the very purpose of the EU’s Common Agricultural Policy (CAP). However, we cannot ignore that it has come at a price to many growers and that agriculture is under pressure.
Despite food being the largest manufacturing sector in the country, UK farmers have suffered a gradual decline in annual profits. Many producers, such as those in the dairy industry, have seen dramatic falls in income following incidents like the foot and mouth epidemic in 2001-02 and, as a proportion of annual income, farm debt has only increased in recent years. There is concern that, following the EU referendum and the devaluation of sterling, growers will face further financial pressures with the overnight inflation in the cost of imported products like feed and agrichemicals.
Brexit will intensify many of these challenges and, we must face the facts, we will never be able to grow all of the food we want, such as coffee and bananas. Therefore, farmers will need to balance greater international market competition with keeping prices low enough to satisfy consumers and compete with low cost producers abroad.
Brexit is the chance to position UK as leader on high quality produce
But Brexit will also provide the agri-food sector with new and exciting opportunities. Whilst we will never be able to produce food as cheaply as in some parts of the world, we can set a global standard for quality. Britain already has the highest standards of animal welfare in the world, and the role of the farming industry in establishing us as a world leader has been invaluable. We championed these objectives inside the European Union but found that other countries’ efforts to improve the CAP were not as ambitious. However, now we are striking out alone, we have a chance to raise the bar in terms of environmental protection and animal welfare standards, and position the UK as a global leader for high quality food.
Continued support from government will be necessary to support our farmers through this transition. Whilst successive governments have made efforts to offset some of the damage caused by global market competition to UK growers, if the agricultural sector is to emerge successfully from Brexit, it will still need public funding to be economically, socially and environmentally resilient.
The government has pledged to honour the subsidy level farmers currently receive until 2020 and recognises that subsidy is going to be needed beyond that, but the fact is that UK farmers have been receiving up to £3 billion a year under CAP, which is more than Defra’s annual budget. Therefore, the sector will need to find new ways to demonstrate to the Treasury that it is delivering value for money at a time when budgets are under pressure and competing with areas such as health, welfare and education.
Bigger role for companies in looking after the environment
Over the long term, we will need the private sector to contribute a greater share of the money required to maintain our farmed natural environment. Green Alliance’s recent report Natural Investment is a welcome contribution to this debate as it sets out a clear strategy to reduce the burden on producers through improved corporate responsibility. A strong example of this is the water industry, which funds farmers to adapt farming methods within catchment areas to reduce the costs of cleaning up the water. This is known as payment for ecosystem services and can directly improve the quality of the industry’s natural capital.
Green Alliance’s report also highlights how soil health is as crucial to business sustainability as it is to environmental sustainability. In future, I hope that this strategy can be implemented on a wider scale to restore the health of UK agricultural land and that consumers may even see ‘Nature Saving’ labels on their food and drink packaging, so that they can be reassured that the products they buy are from sources where the environment is being protected.
The next few months will reveal the extent to which the government shares this vision, with the publication of the 25 year plans for the environment and farming, and a new agriculture bill. These present a historic opportunity to align the production of our food with the health of our great British countryside. If politicians, farmers and food businesses can find new ways to work together more effectively, the future for British food and farming looks very positive.