What will happen in the farming and rural sector if we leave the EU?
The EU referendum means that farmers face more questions than answers. Hannah Craig, the head of Harrison Drury’s farming and rural business team, investigates some of the key issues.
Key figures and organisations in the farming and rural economy are divided or ambivalent on the question of the UK’s continued membership of the EU.
The National Farmers Union has announced that the interests of farmers will be ‘best served’ by the UK remaining in the European Union – but the union has stopped short of actively campaigning for the ‘stay’ side and is not advising its members which way to vote.
Within Defra, pro-Brexit farming minister George Eustice says Britain’s EU membership could be replaced with a new partnership which includes a free trade agreement but with reduced regulations and red tape. Meanwhile, the Secretary of State for Environment, Food and Rural Affairs, Liz Truss, is a prominent ‘stay’ campaigner.
What does it mean for trade?
Supporters of the UK remaining part of the EU emphasise the advantages of the current free trade agreements in place, insisting farmers will continue to reap significant benefits.
However, the Vote Leave camp argues that a Brexit would put Britain in a position to negotiate new trade deals on better terms.
The Common Agricultural Policy (CAP)
The Common Agricultural Policy was set up in 1957 to provide financial support to farmers across Europe. It costs the EU around €58 billion each year.
The CAP has two sections: direct payments, also known as the Basic Payment Scheme (BPS), as well as general funding for the wider rural economy. In total, around 55 per cent of the UK’s income from farming derives from CAP support.
Brexit campaigners argue that the CAP system could be replaced with a similar system if the UK were to leave the EU, pointing to examples of such schemes in Norway and Switzerland.
Nonetheless, the NFU says it would be impossible to measure the impact of the UK being outside the EU because the future relationship with the EU would be unknown, as would the conditions farmers would have to operate under if there was a vote to leave.
Accessing agricultural labour
One of the fundamental principles of the EU is the free movement of people. This has caused a lot of controversy, with Brexit campaigners arguing that the UK is unable to adequately control migration while it remains in the EU.
However, many farming industries – such as soft fruit and horticultural businesses – rely on labour from the EU. This means their future viability would depend on the terms of any deal following a vote to leave. It may be the case that access to foreign labour would be limited if the Leave campaign prevailed.
Avoiding red tape
EU regulations affect farmers in many areas, including environmental, conservation and public health regulations. It is unclear whether – and to what extent – these regulations would still apply if the UK left the EU. As with trade, this would largely hinge on any subsequent negotiated deal.
Harrison Drury has a team of solicitors in Preston and throughout Lancashire who are specialists in the farming, food and rural business sector and frequently advise farmers, producers and other rural businesses. For more information, contact Hannah Craig on 01772 258321.
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