This pack has been prepared ahead of the debate to be held in Westminster Hall at 4.30pm on Wednesday 19 October 2016 on the effect of the UK leaving the EU on agriculture and fishing in the South West. The debate will be led by Scott Mann.Jump to full report >>
A Westminster Hall debate has been tabled on the effect of the UK leaving the EU on agriculture and fishing in South West England. The debate at 4.30pm on 19 October 2016 will be led by Scott Mann.
This debate pack includes some press and Parliamentary material, and further reading on the implications of Brexit for UK agriculture and fisheries.
The agricultural industry in the UK is small, accounting for 0.7% of employees and economic output.
Some statistics: agriculture in South West England
[Sources: Economic output: ONS, Regional GVA; employment: ONS, Business register and employment data and Businesses: BEIS, Business population estimates. Economic output is Gross Value Added and refers to 2014; Employment refers to 2015; Businesses refers to 2016. Agriculture includes all agriculture, forestry and fishing activity]
CAP payments to farms in South West England
According to House of Commons Library analysis of DEFRA data, farmers in the South West received £427m under the Common Agricultural Policy in 2015. This includes £337m under the Basic Payment Scheme, and £90m under the Rural Development Programme.
[Source: Defra/UK Coordinating Body, CAP Payments Search (accessed 14 October 2016). The figures above relates to farms in postcode districts which fall entirely within the South West region. A small number of postcode districts straddle two regions. This means that a small number of farms located in the South West but close to the regional border may be excluded].
In South West England, the industry contributes more to the regional economy than the national average. The agricultural industry contributed £1.4 billion to the South West’s economic output, 1.2% of the total. This compares to 0.7% of UK output.
The South West is also one of the largest regions or countries of Great Britain in terms of agricultural employees. There are 8,800 agricultural businesses in the South West, with 27,300 employees.
There are no estimates of the number of EU nationals employed in the agricultural industry in the South West.
In an exchange in the Commons in July 2016, debating the policy implications of Brexit, Kerry McCarthy suggested that jobs in the south west might be at risk, while the food and farming sector might find it hard to recruit:
On the one hand, Lush cosmetics has just announced that it is going to move most of its production overseas, because it says that its workers do not feel welcome here, while on the other hand there are those in the food and farming sector, 38% of whose workforce comes from overseas, who are saying that they could go out of business because they will not be able to find people to employ.
In reply, Stephen Crabb (then the Secretary of State for Work and Pensions) said that the department had contingency plans, but (he argued) it was important also to recognise the potential benefits:
The Department has clear plans in place for any significant increase in unemployment, whether in a particular local region or right across the UK. We have contingency plans for dealing with up-ticks in unemployment. However, we need to be really careful that we do not exaggerate the bad news that the hon. Lady might think is out there. There are opportunities for this country in terms of trade deals and of securing new investment, such as the investment from Boeing that was announced today. There are also serious risks and challenges, and we need to be clear-sighted and prepared for those. [HC Deb 11 July 2016, c11]
The law firm Ashfords has identified some common themes in post-Brexit literature from the NFU, Country Landowners' Association and the Campaign to Preserve Rural England:
Although there is much speculation, it is too soon yet to say what the effect on the agriculture and fishing sector of the UK's leaving the EU might be, either at the national or regional level. As the Commons Library briefing papers (mentioned below) explain at more length, much will depend on whatever arrangements are negotiated between the UK and its former EU partners and, perhaps, on whether the UK opts for a 'hard' or 'soft' Brexit.
Even so, in all scenarios Brexit, means a departure from the Common Agricultural Policy (CAP) and its subsidy and regulatory regime. EU farm subsidies currently make up to around 50-60% of UK farm income.
The UK Government has guaranteed the current level of direct funding to 2020 “as part of the transition to new domestic arrangements”. This is in line with the current CAP funding period and hence the timescale over which farmers and regulators have already invested and planned. However, it is not clear what levels of support the UK Government will be willing to provide beyond this, or whether it will target funding in a different way.
Before the referendum, the National Farmers Union (NFU) observed that arriving at a post-Brexit settlement might not be straightforward:
The [Yorkshire Agricultural] Society concludes that a simple free trade agreement with the EU is probably the UK’s most preferred option, but that this may be difficult to achieve. If no agreement on an FTA is possible then the default position would be for the UK and EU to trade with each other within the WTO system.
In the Lords in July this year, the Earl of Sandwich suggested that farmers were dismayed that Brexit might jeopardise their farm payments:
Generally, I think there has been considerable dismay among farmers since Brexit simply because of the threat to their farm payments. [HL Deb 21 July 2016, c791]
Replying, junior Defra minister Lord Gardiner of Kimble emphasised that the Government would look carefully at how it continued to support (not subsidise) farmers:
I want to emphasise the word “support” because a number of speakers have used the word “subsidy”. My view is that we provide support for what farmers do to help us, in so many ways, in the national and public interest. My honourable friend the Secretary of State has been very clear that this now needs to be looked at carefully. [HL Deb 21 July 2016, c797]
Farmers' Weekly has published its own analysis of agricultural trade in a post -Brexit world. Although it has yet to produce a detailed policy paper, the NFU has recently set out its vision of a "progressive, profitable and competitive future" for British farming after Brexit:
NFU Council supports a bold, ambitious vision for British food and farming post-Brexit; one that ensures farm businesses are central to a dynamic food chain and deliver a countryside that works for everyone.
Over the past eight weeks the views of thousands of members on the future of farming have been gathered through questionnaires and a series of meetings nationwide. Today, NFU Council, the organisation’s governing body, reviewed the results of the work to date and supported the next steps to develop a comprehensive framework. This will form the basis of those initial talks with government, at all levels, to ensure the country builds a progressive, profitable and competitive future for British farming post-Brexit.
Likewise, the implications of Brexit for fisheries remain highly uncertain.
A recent article on the Commons Library's Second Reading blog - Troubled waters? Negotiating fish quotas post-Brexit - outlines some of the issues that are likely to arise in negotiations and considers whether "British fish for British fishers" is a goal that could be achieved.
In the whole of the UK in Q1 2016 there were an estimated 25,000 EU nationals working in crop and animal production. This represented 8% of all UK agricultural workers. [Source: ONS Labour Force Survey Q1 2016 microdata analysis. Figures are rounded to the nearest thousand. Not seasonally adjusted].
It is certainly the case that EU free movement law has ensured that UK employers have relatively easy access to labour from EU/EEA states, and that this has offset some of the obstacles to non-EU/EEA economic immigration imposed by the UK’s Immigration Rules. For example, it has been assumed that any need for lower-skilled labour can be met by workers from within the UK and EU/EEA. If EU/EEA nationals became subject to similar controls as non-EU/EEA nationals (e.g. entry for skilled workers only), it is possible that there would be some pressure to relax some visa restrictions or expand certain categories (e.g. for seasonal agricultural workers), depending on the needs of the economy.
If the UK left the EU and EEA, it could impose its own controls on which EU/EEA citizens were admitted to the UK and under what circumstances (assuming that it did not negotiate a future agreement with EU/EEA Member States which required the continued application of free movement law).
There is no certainty at this stage about what those controls might look like – a range of different suggestions have been made by different interested parties. It is fair to assume that the UK’s approach to controlling EU/EEA migration would be informed by broader considerations of the national interest, including the extent to which the UK wanted to continue to attract certain types of migrant to the UK.
Farmers' Weekly has outlined UK farming and horticulture's reliance on migrant workers:
Across all industries, EU-born workers account for just 5% of the country’s workforce, but in agriculture it’s 65%, according to Office for National Statistics (ONS) figures – not including seasonal workers.
It’s not just the labour-intensive horticulture sector that is reliant on migrant workers.
Pig and poultry units often employ migrant labour and a survey of dairy farmers, by the Royal Association of British Dairy Farmers two years ago, found that a third had employed migrant staff – with over half from Poland.
An article in the Guardian in July this year quoted industry bodies as suggesting that the future for some businesses might be perilous:
Suppliers of native crops – including cucumbers, apples, raspberries and blackberries – could go out of business because of potential bans on EU migrant workers.
Particular concerns have been raised about the availability of seasonal labour, post-Brexit.
The previous seasonal agricultural workers' scheme closed at the end of 2013. Before the referendum, the NFU had voiced concerns about potential shortfalls in seasonal agricultural workers once the UK leaves the EU. (These concerns are discussed in the Commons Library briefing on Brexit's impact on UK agriculture policy).
Asked recently about what the Government is doing to ensure that farmers will continue to have access to sufficient seasonal labour, immigration minister Robert Goodwill said that the Home Office would be engaging with relevant stakeholders, including those in the agricultural industry. [PQ 46569, 10 October 2016]
Questioned in July this year about the resilience of farming businesses, Defra minister George Eustice said that there were ways to ensure the availability of labour:
Defra started work on developing a new 25 year food and farming strategy in conjunction with stakeholders in July 2015. Although it was expected to be published in early July 2016, it has not, but a consultation is due soon. [PQ 46447, 12 October 2016]
Commons Library briefing: Brexit: Impact across policy areas (CBP 07213, 26 August 2016)
Second Reading blog: Troubled waters? Negotiating fish quotas post-Brexit (7 October 2016)
Commons Library briefing: Brexit: What next for UK fisheries? (CBP 07669, 27 July 2016)
Commons Library briefing: EU Referendum: Impact on UK Agriculture Policy (CBP 07602, 26 May 2016)
Commons Library briefing: Agricultural incomes and subsidies (SN/SG/2613 , 14 October 2016)
Commons Library briefing: Sources of Statistics: Agriculture and Fisheries (SN 03835, 13 July 2016)
Lords Library briefing: British Farmers: Impact of Leaving the European Union (July 2016)
Commons Debate packs CDP-2016-0177
Author: Gabrielle Garton Grimwood