UK-wide subsidy proposals could harm Scotland’s farm policy

UK government proposals on subsidy control could represent a backdoor threat to Scotland’s ability to set its own farm policy, NFU Scotland has warned.

And the union has called for agricultural support arrangements to be separated from the new UK approach which is currently under consultation.

Following the end of the transition period on 31 December, the UK gained the freedom to design a new domestic subsidy control regime that reflects strategic interests and national circumstances.

Interim subsidy control arrangements under the Trade and Co-operation Agreement (TCA) came into force on 1 January and the current regulations broadly mirror the EU’s State Aid rules, but the UK government is currently consulting on future arrangements.

And significant concerns have arisen over the possibility that financial support for agricultural and rural development policy goals could be subject to the proposed set of regulations under discussion which are being set up to address other areas.

The union’s policy director, Jonnie Hall said, “Agricultural and rural development policy is a devolved area for very good reason .

“It must reflect different needs and circumstances, and our concern is that these subsidy control proposals could significantly constrain that. In our view, agricultural and rural development financial support must be kept separate from the subsidy control regime being proposed.”

“Financial support within agricultural and rural development policy remains absolutely critical if a vast array of policy objectives are to be met in the public interest - including producing food to the highest standards while helping meet climate and biodiversity challenges.

“Agricultural policy is devolved, and that should not be eroded via a backdoor of UK-wide subsidy control measures.

“We fully accept that, in the context of the UK’s internal market, devolved support arrangements must not distort competition or trade within the UK.

"NFU Scotland is clear that the integrity of the UK internal market must not be undermined by excessive divergence in support payments.

Hall argues that there are already clear safeguards in place internationally through the WTO Agreement on Agriculture and nationally through the UK’s Agricultural Support Framework to prevent this happening.

“As a result, NFU Scotland is unequivocal that agricultural and rural development financial support must be kept separate from the subsidy control regime being proposed.”

However, he said that the union recognised that the UK government wants a subsidy control system that promotes the wide range of benefits that can be derived from subsidies while limiting the most harmful impacts.

In its response to the consultation, the union supported facilitating interventions to deliver on the UK’s strategic interests, maintaining a competitive and dynamic market economy, protecting the UK internal market, and acting as a responsible trade partner.