Agricultural subsidy should shift towards public benefits

K Pic 2This post is by Marcus Gilleard, senior external affairs adviser, National Trust. It is a version of an article first published on National Trust’s NT Places blog.

Nearly a year ago, the National Trust’s Director-General Helen Ghosh set out the basic principles on which we believed a post-Brexit system of support for UK farming should be developed. Since then, we’ve fleshed out our thinking and joined forces with other charities, as part of Greener UK, to help the UK and devolved governments develop their proposals. A core focus of our work remains the concept that public money should pay for the delivery of public goods.

Last week we published a new paper that we hope will help with development of the government’s proposed Agriculture Bill, announced in the Queen’s speech.

CAP balance of funding doesn’t benefit society enough
Currently, under the EU’s Common Agricultural Policy (CAP), some £600 million a year gets spent on ‘Pillar 2’ rural development schemes in the UK, delivering public benefits like wildlife and heritage. In contrast, £2.5 billion goes on ‘Pillar 1’ subsidies which are based on how much land you have. The large disparity in support between the two approaches continues despite growing evidence of environmental degradation resulting from decades of intensive farming and climate change effects.

Brexit now offers the opportunity to create a fundamentally different strategy for our land; one that addresses this imbalance and achieves a thriving, healthy countryside delivering multiple benefits for society. We need services like clean water and healthy soils, and the benefits to our well-being that contact with nature brings. In turn, these services can play a key role in securing a prosperous rural economy, ensuring the future viability of farming, and the sustainability of food production.

But to change how decisions are made on the ground, we need to take a broader view of what land is for and what we fund to achieve it. The agricultural sector is associated with a wide array of other public benefits valued by society. These include heritage and cultural landscapes, diverse wildlife, carbon sequestration, access and recreation, clean air, a stable climate and flood management.

Farming also plays an important role in delivering broader social public goods, from vibrant rural economies to animal welfare and, of course, food security and renewable energy.

How to ensure food security
It is around the issue of food security that, it is often argued, the UK farming sector should continue to be subsidised. However, this is a public good with distinct private characteristics (farmers receive a return for producing food), so production could be better rewarded through the market.

Food security too often becomes conflated and confused with ideas of domestic self-sufficiency (‘food sovereignty’) but this is an untenable connection. Put crudely, if the aim is food sovereignty, then policy should be to reduce food exports. If the aim is food security, then the policy should be to have good relations and a trade policy to support imports and international supply chains, but not at any cost. Under both, the aim should also be to reduce incentives or constrain opportunities to grow ‘non-food’ crops.

And, if food security is about the ability of the UK to respond to a global crisis that interrupts global food networks, then a more optimal approach might be to support farmers to deliver other outcomes during ordinary times (eg farming for environmental results) but retain their ability to increase production if a crisis was to emerge (ie to avoid abandonment of farmland). Protecting the asset base, like soil, pollinators and water, will be fundamental to retaining this flexibility.

A new goal for future agriculture support
With limited resources and the aim to secure better taxpayer value, the goal of future public policy should be to improve and enhance the long term health of the environment, promote more innovative and sustainable ways to increase productivity and manage catastrophic risk, and ensure farmers get a fair price for their products.

Even so, previous analysis, much of it by Defra, builds a compelling case for why the focus of any such policy should be on maintaining and improving the environment. It is an opportunity to target more public support on the key environmental and social public goods currently undersupplied by agriculture relative to the scale of societal demand.

Putting public benefits and environmental delivery at the heart of CAP’s replacement will help shape effective and efficient policy design, whilst helping to secure a strong, healthy and viable agricultural sector. It should optimise the use of public money, aligning the needs of farmers and need for food security with good social and environmental outcomes. So the more a farmer delivers for society, the more support they would get.

But future investment in green infrastructure and wildlife-friendly farming will need the support of private capital too. A new policy framework should also encourage profitable activity in new ‘natural markets’ and incentivise private sector investment in environmental restoration to complement and enhance the impact of public funding.

UK farmers will continue to have a critical role in producing safe and sustainable supplies of food, but they will also have a crucial part to play in improving biodiversity, protecting the vulnerable natural resources upon which our economy depends, caring for our landscape and heritage, looking after the welfare of livestock and helping to address challenges like climate change and flooding. Farmers should be rewarded for this role and this justifies continued public funding.

The National Trust is discussing how to use public money to support farming and the countryside after Brexit with a range of farming and conservation organisations. Please get in touch if you have any views by emailing at policy_campaigns@nationaltrust.org.uk.

 

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