#Brexiteers – how do we replace CAP

The prime aspect of the “Common Agricultural Policy” is no longer formally known as the “Single Farm Payment”, but that is the term still understood.

The bureaucracy around it can indeed be ghastly, but in fact the average payment in Northern Ireland is over twice as high as that in England. Given the relatively larger contribution of agriculture to the Northern Ireland economy, this payment is vital for rural well being.

“Brexit” means withdrawal of this payment by July 2018. It would then fall to the UK cabinet – which has had no Northern Irish representation since the 1800s – to determine how to support agriculture in Northern Ireland, bearing in mind the UK as a whole is less dependent on it.

So, how can we be sure the payment will be replaced at all? How would we ensure the Conservatives, with only one seat outside England and Wales, would maintain Northern Irish preference? How can we know how agriculture would be supported given there would likely be new tariffs on Northern Irish agricultural goods going to the Continent?

(Note well the phrasing – how can we be sure?)

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4 thoughts on “#Brexiteers – how do we replace CAP

  1. andyboal says:

    If the total sum paid directly to UK farmers via CAP were guaranteed to be provided by the Treasury (and there is no commitment to do anything of the sort), it would be divided according to the Barnett formula.

    In that scenario, I would doubt that as much money would be available to NI farmers.

    • I agree it’s safe to assume that DEFRA would provide subvention, whether they can provide other benefits through FTA’s to new market access or R&D funding really depends on political competences and changing the culture of agriculture and fisheries. It would also need to bargain for carving up the West Atlantic.

      You could be right with the Barnett formula, let’s assume 25% more.

      At 2.4% of GDP, Northern Ireland agriculture is 240% times the UK average 1%. That would probably mean NI getting 125% of the UK average when it needs 240% of it, another welfare reform like stand-off where nearly half the funding for agriculture may need to be taken from the block grant.

      This austerity argument could probably be mitigated by claiming a post Brexit EU would be forced to reduce CAP/CFP anyway without the UK contribution, but part of the payments to the customs duties that the UK may likely pay anyway through tariffs, which will be mitigated slightly should the UK reciprocate.

      If European agriculture absorbed the entirety of the cuts due to the loss of the UK net contribution (which effectively is the same sum of what it gets back in agriculture) , the EU would have to cut (an EU27 i.e. – paying UK anything) CAP by 10%.

      All things being even this leads to a 10% cut for Southern Irish farmers vs. a 32% cut for Northern Irish farmers and fishers (factoring in the net contribution AND Barnett Formula reductions on the overall tally).

  2. Alan Burnside says:

    CAP is a reason to leave from a UK perspective. 38 percent of EU budget going on agriculture which is only some 7 percent of EU GDP. French farmers get 30k euro a year; Irish farmers about 15k euro. Cameron should have insisted on CAP reform.

    • From a GB perspective, and I don’t agree Alan.

      For one reason, there is tariff free trade in agriculture goods meaning no customs posts on the Irish border.

      Secondly, on the agriculture supply side there is tariff free trade in terms of the manufactured goods the UK provides to more agrarian nations like Ireland and France (tractors, fertilizers, pesticides, veterinary medicine etc.). Effectively even buying goods from other EU markets helps the UK economy.

      Thirdly, the UK is the fifth highest recipient of CAP money. Larger Farms and the Western costs of living means that farming is more expensive, therefore the EU’s economy of scale may be more beneficiary.

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