2020-04-09
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Agriculture, Environment, Food and the Future

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Posted by Joel Woolf on 09 April 2020

Joel Woolf Partner

There have been lots of Brexit bounces.  A significant bounce has been that of legislation back into the Parliamentary process.  Chief among these for rural business have been the Environment Bill and the Agriculture Bill.  These have been billed as a once in a lifetime opportunity for agriculture to take back control, effect change and be at the forefront of climate change all at the same time.

We are also in new territory in acknowledging that climate change is happening.   It is true that climate change was an issue well before the discovery of the hole in the ozone layer.   It is only now that taking real action is being discussed in government circles: partly due to environmental activism and (and the cynicism of this is acknowledged) because politicians see votes in “out greening” their opponents.

It is against this background that natural capital and environmental offsetting are regularly discussed - although no one has really managed to define either of these terms succinctly, other than emphasising the importance of both.

Hyperbole or just political green washing?

To put government support for agriculture into context, it helps to see where we have been in order to see where we are going.  Many will be familiar with IACS and area aid, suckler cow premium and other production-linked subsidies.  In effect, farmers were paid to produce.  In the early 2000’s the single payment scheme introduced the decoupling of aid from production and cross compliance, requiring instead compliance with certain obligations.  We also saw direct support (Pillar I) and rural development (Pillar II) funding being introduced.  With the introduction of the basic payment system, cross compliance was beefed up with additional “greening” requirements.

The basic principle of financial support for agriculture over the last decade or so has effectively been contractual: the claimant agrees to comply with the stipulated obligations (cross compliance) for which the government pays some money.  The concept of entitlements and eligible hectares is simply part of the calculation process and it is hard to see how this basic system will change.  Ultimately the government will require compliance with a set of obligations (similar to cross compliance) in return for a payment.

The forthcoming changes need new definitions.  Defra is talking about three elements: environmental services, net biodiversity gain, and natural capital.  Fundamentally, these terms describe the natural environment of a farm, how farming damages the environment, and how to change farming to enhance the environment.  They go to the heart of the matter: the quality of our air, water, and soil.

Farming is the backbone of the rural economy

There are some significant, potential problems with these proposals.  No one questions the need to protect the environment and manage land in an environmentally responsible way, while producing safe, good quality food.  This simple fact is regularly forgotten, as is the fact that farming is the backbone of the rural economy.  Farms employ people, they buy services and…they manage the environment.  The countryside we revere so much is the result of several thousand years of farming. 

It must also be remembered that accessing any scheme under CAP has always been voluntary.  No farmer is compelled to claim subsidies; it is the financial imperative that drives most to do so.  There is a risk that the government’s new scheme will be difficult to understand and will restrict farming activity without providing sufficient funding to compensate the likely falls in profitability.  This could result in poor uptake of the three levels of scheme proposed, thus compromising the public good and environmental gain achieved.

Take the recent flooding. Many have suggested that farmland around conurbations should be flooded to protect homes and businesses from inundation.  It is true that water meadows were, traditionally, an essential part of a river catchment area while providing pasture for both hay and grazing.  Meadows were designed to flood during the winter, but only for days, not weeks.  By contrast, some flooded areas this winter have been underwater for long periods, effectively killing anything growing and adversely impacting both soil structure and biological activity.

Flood plains have traditionally provided good, fertile land particularly suitable for higher value speciality crops and horticulture.  Using this land for flood defences would significantly curtail its earning ability.  There is no guarantee that the farmer will be adequately compensated for loss of earnings so why would they voluntarily agree to take land out of production?

Consumerism will undermine food quality

At the same time the sector is likely to face competition from food imports.  Although probably cheaper for consumers, there may be very significant issues around food safety standards.  Many will remember the horse meat scandal and those parts of the Agriculture Bill enabling the gathering of food chain data could be seen as a response to “Horse Gate”.  However, it may also have the effect of lowering consumers’ perception of risk from imports. 

In effect, the Agriculture Bill would enable significant imports of food, thus outsourcing the environmental cost of that production to other parts of the world.  Can it be right that we protect our own country’s standards but then happily import food that has a significant environmental impact elsewhere? This is hypocritical and contrary to the environmental protection the Government claims it wants.

It is hard after reading all the current policy updates and bills before Parliament not to conclude, sadly, that the Government sees ‘consumerising’ the environment as the way to save it. The idea that the environment and its protection is something that can be bought and sold, suggests that the Government understands the price of everything but the value of nothing.

Food can be good quality, environmentally responsibly produced and cheap; but it can only ever be two of those things at one time.  In reality we are where we are because consumerisation means most consumers are more concerned about price.  Quality, provenance, origin, and environmental impact play second fiddle.  The loss of connection between consumers and their food has accelerated over the last 20 years as seen in the relentless rise of ready meals, fast food outlets, and home delivery services.  Most of the food chain is built on access to large volumes of low-priced product to which the processor adds value. No longer is the value effectively added at home by the cooking process.  The answer to solving the UK’s environmental problems are bound together with its agricultural and rural economy. Caring for one means having to care for the other.

Tags: Agriculture

About the author

Joel Woolf

Partner

Joel advises estates and farmers in relation to strategic business planning including business continuity and succession issues, and share and contract farming issues.

Joel Woolf

Joel advises estates and farmers in relation to strategic business planning including business continuity and succession issues, and share and contract farming issues.

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