Withdrawal from Common Agricultural Policy offers one chance to make both the environment and farming sustainable

Posted On: 
13th December 2017

Professor of Environmental Economics at the University of Exeter Professor Ian Bateman writes that the UK's withdrawal from the EU’s Common Agricultural Policy is a once in a lifetime opportunity to make both the environment and farming sustainable, delivering benefits throughout society.

Credit: 
PA

Whether you are pro or anti-Brexit, withdrawal from the EU’s Common Agricultural Policy, or CAP, should be welcomed. This has been the single policy most responsible for environmental degradation in the UK countryside. It rewards the over-intensification of agricultural production and fails to support long-term sustainable farming methods. Many farmers have no option but to work in the way the CAP dictates, even when this is not in the long term best interests of the land. 

The opportunity exists for a new deal for the UK countryside which delivers sustainable farming livelihoods, radical improvements to the natural environment and a much better deal for taxpayers. However, this requires that we first recognise that the status quo is indefensible; it is a bad deal for almost all concerned, including the large majority of farmers. 

At present more than 50 per cent of the value of UK agriculture comes from public subsidies. Most of this is distributed on a per hectare basis with little differentiation in terms of the environmental or other public benefits that it generates. This means that nearly three quarters of this public money is captured by just one-quarter of farms; those that are the largest, including many of the most profitable farms in the country. 

The following are a set of proposals which together provide a coherent alternative to the CAP; an alternative which provides a new deal between society and farmers which is good for both. 

Society doesn’t benefit from farmers being pushed into bankruptcy. We need a new compact between society and the farming community to deliver a new deal for the UK countryside. Reforms could mean the payments could be used to improve support for more typical farms and those facing economic hardship. 

The present per hectare system should be replaced in part with a fairer distribution of a basic income safety net across farms. This could in part be linked to various basic good practice requirements, for example concerning soil health and good husbandry. This will help farmers, particularly those struggling on lower incomes. It will encourage farmers to protect the land and stop money being wasted on subsidising overproduction and damaging the environment. 

Once that income safety net has been ensured, additional public funding should not be about paying for those goods which are better provided and paid for through markets. Instead public funds should be used to help promote better rural development, maintain animal welfare and biosecurity, and help farmers adopt technology which both raises output and lowers farming’s impacts. But most of all, public funds can help farmers deliver the Government’s objective “of being the first generation to leave the natural environment in a better state than that in which we found it”.

The majority of public funding should be given to those areas and actions which generate higher public benefits; areas that yield clean drinking water, protect communities from flooding, link conservation habitats for wildlife, provide recreation for disadvantaged populations, protect cherished landscapes and reduce greenhouse gases and other air pollution. 

The overall level of subsidies should not be reduced. Indeed Government figures show that environmental improvements, such as planting the right woodlands in the right places, provide excellent value for money to the taxpayer with benefits often three times larger than costs. Levelling the subsidy playing field so that farmers are not penalised for woodland expansion is also long overdue. 

Moving public funding away from rewarding the ownership of land towards using it to help farmers protect land for the public good could also encourage more public support for farmers and farming. If those running larger farms are prepared to deliver high levels of public goods then they should not be penalised through a cap on payments. We should also introduce more competition to the allocation of public funding and provide firms with incentives to partner with farmers to improve the environment.

For this to work the Government needs to improve decision making by investing in decision support ‘tools’ to help make sure money is spent on the right policies and activities.  This will also allow the public to see how their tax is being spent. Better monitoring of the effects of policies will also allow us to move towards a system where we pay for outcomes rather than just activity. 

We have this one chance to make both the environment and farming sustainable, delivering benefits throughout society. Policymakers should take advantage of this once in a lifetime opportunity. 

Professor Ian Bateman OBE, FRSA, FSB is Professor of Environmental Economics, Director of the Land, Environment, Economics and Policy Institute (LEEP)