Scottish farmers may stick with EU route on policy
With the Scottish government likely to desire to remain closely aligned with the EU even after the transition period ends, Scottish farmers should not ignore current developments in farm policy on the continent.
The continued uncertainties over a deal with Europe made the usual forecast of the outlook for the industry’s economic picture over the next 12 months nigh-on impossible for farm consultants Andersons annual winter seminar this week.
However, producers tuning into the on-line event heard that Scottish policy could develop more in line with the current reforms of Europe’s Common Agricultural Policy - rather than mirror the radical move away from production support set to be adopted in England.
Scottish director David Siddle said that the administration’s aspirations towards independence and re-joining the EU meant that policy development was likely to remain broadly in step with moves taken on mainland Europe.
The organisation’s head of business development, Richard King said that while EU producers faced changes under the current CAP reform, he said that as the two-pillar, area-based system looked set to remain in place, the changes were not as fundamental as those being faced by English farmers.
Agreeing that it was not a given that there would be any “coming together” of policy and support systems between Scotland and England he said that as most support mechanisms around the globe remained focused on some form of production support, England had “gone out on a bit of a limb” when compared with its competitors.
He also stated that the English policy would change the economics of farming markedly south of the border:
“And most producers will probably struggle to get the same level of funding as they did through their basic payment scheme when the new Environment Land Management proposals come into play.”
He also argued that even if the UK government decided to commit the same level of funding to agriculture beyond 2024 after payments changed to delivering public goods, the profit level for producers would be much lower.
“At the moment producers can pretty much look upon their BPS payments as 100% profit – as it is largely delivered for the tasks they would carry out to produce food anyway.
“However under England’s new ELMS scheme farmers will have to take action and do additional tasks or accept lower yields in order to receive the funding – so for farmers the economics of support are set to change quite significantly south of the border.”
But on the outlook and Brexit outcome, the pair predicted that while overall farm profitability in the UK had fallen by around ten per cent during 2020, to stand at close to £4.7 billion, this figure remained within the ‘normal’ range.
However, with more normal winter plantings, they predicted that while different sectors could suffer different fates, a ‘good deal’ outcome from the EU talks could see the figure climb slightly to £5 billion in 2021 - while a no-deal would see it slump to well below the £4 billion mark.