Perfect presentation required if post-Brexit wish-list is to be fulfilled

25.10.2016

AS THE winter nights draw in, farmers will be attending a range of meetings to discuss what they want post-Brexit agriculture to look like. NFU Scotland will effectively start the ball rolling with a conference in Perth on Friday.

Already most farmers seem inclined to want the same level of access to the EU markets for their produce to continue, with much the same level of financial support as they currently get, but with less regulation.

As always with deals involving the UK Government and the EU, what farmers want and what they finally get will be two totally different things. All that I can predict with certainty is that the debate will provide me with reams of news to report.

The first issue that farmers should address is the disgraceful practice of "slipper farming", where landowners are paid substantial subsidy payments despite not actively farming the land. Most folk think that subsidies are paid to support smaller farmers, or those who farm poorer land, but nothing could be further from the truth.

To give some idea of how iniquitous the current system is, a recent Greenpeace investigation revealed that the top 100 UK recipients of the Common Agricultural Policy's (CAP) subsidy payments received more than the bottom 55,000 farmers combined. Topping the UK list, by claiming almost £3 million, was an Aberdeenshire farmer who owns a number of farms. That has got to stop.

Trade is a fundamental issue for the UK and Scotland in a post-Brexit world. Some 62 per cent of the UK's agricultural exports are to the EU.

The big concern is whether futuretrade will be subject to tariffs. Currently, countries importingwheat into the EU face a tariff of (EURO)12 (£10.85) per tonne, although one million tonnes of wheat from the Ukraine is exempt from that tariff as EU politicians show solidarity with that country.

Last year, the UK exported 2.8 million tonnes of wheat, with 80 per cent going into the EU. Barley exports amounted to two million tonnes in 2015. The imposition of tariffs is one of the biggest risks to the UK arable sector.

Having said that, the UK milk sector could benefit immensely from protection by tariffs. The UK annual dairy trade deficit is currently of the order of £1.3 billion, with the EU accounting for about 99 per cent of total UK dairy imports.

Ireland is the big player. As well as milk and cream, Ireland also exported 65,000 tonnes of butter and dairy spreads, and 139,000 tonnes of cheese to the UK in 2015, and intends to increase milk production by 50 per cent by 2020.

To eliminate the UK dairy trade deficit we would need to produce an extra four billion litres of milk from about half a million more cows. That would be a major boost for the UK dairy industry, involving badly needed extra jobs and investment in more processing capacity.

Of course, dairying and cereals are confined to Scotland's better land, but more than 85 per cent of Scotland is designated as less favoured, meaning that extensive grazing by beef cattle and sheep predominates.

Tariffs on Irish beef would be a welcome boon for Scottish producers, who have recently seen imports curbed as a consequence of the weak pound.

Scotland's national flock has contracted from its peak in 1997 of 3.8 million ewes to 2.59 million in 2015. The decline in sheep numbers accelerated when subsidies were de-coupled from production in 2005 under CAP reforms. That allowed slipper farmers to claim generous subsidies without keeping sheep.

The sad reality is that, with the exception of some ethnic communities, lamb consumption is declining.

UK consumers eat somewhere between 4.7kg and 5kg per person/per annum. That average conceals the fact we Scots only consume about 3kg, less than half of that of the average in England.

Rather than paying subsidies to produce lambs where home consumption is in decline, would we not be better off planting more trees to meet the increasing demand for timber?

The Scottish Government has set an ambitious target of increasing the current area of 17 per cent of Scotland under trees to 25 per cent. Would that not be a better use for some of our hills and uplands to increase economic opportunities processing and marketing timber products?

One thing is for sure, farmers had better spend their time wisely preparing a sound case, remembering that others are competing for Government funds.


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