The Future of the UK Countryside, Post Brexit: A Structured Dialogue with Ian Hodge

1)      In your opinion what are the biggest risks and opportunities for farming and the environment upon leaving the EU?

 

Risks and opportunities relate in different ways to different sectors and arise primarily from changes in agricultural markets and in agricultural policy. Much will depend on the arrangements for international trade that are in place subsequent to Brexit. Free trade agreements with major agricultural exporters, such as the United States, Latin America or Australasia would be likely to reduce market prices for agricultural commodities in the UK. This could undermine farm incomes but may benefit consumers. This, of course, raises questions about the quality of the products that are imported and the environmental and animal welfare impact of their production in the exporting countries.  This then presents opportunities for consumers and risks for farmers.

Much also depends on the approach that the UK adopts to rural land policy. The replacement of the Common Agricultural Policy by a UK policy offers the opportunity to develop an approach that is tailored to UK conditions rather than having to be a compromise reached amongst 28 different member states in the EU. This is a clear opportunity. But there are limits to policy options in that if the UK wishes to maintain free trade with the other EU member states there will be requirements for the UK to maintain equivalent regulations and standards. At the same time, the funding for rural land policy will have to compete with funding for other sectors, such as the NHS, education or social welfare, which will be considerably more challenging than keeping funds within the agricultural budget while in the EU.
2)      What do you see as the basis for future public payments for farmers and land managers? What, in your opinion, should public funding aim to deliver?

Given the competition for public funding in the UK, there will be much greater pressure to demonstrate that the funding provided delivers clear social benefits. There is an accepted public demand for a well-managed countryside and a willingness to continue to provide some level of funding in support of it. In most contexts, this ‘management’ requires the continuation of some form of agriculture and so we may expect that there will be a continuation of payments in some form for agricultural management where the socially preferred land uses and management that are accepted as legitimate within the established regulatory framework differ from those that generate the highest financial return at market prices.

A well-managed countryside would provide quality farm outputs from efficient and profitable farm businesses while maintaining a high standard of environment and delivering a broad range of ecosystem services. But it is, of course, impossible to be precise and detailed about what public funding should aim to deliver. Conservationists are often accused of being vague about what they want to see, but it would be equally hard to state in simple terms what we want the NHS or the British motor manufacturers to deliver. The challenge in this respect is particularly hard in that a key objective would be to achieve spatial diversity in landscapes and habitats. It is important therefore to develop policies and institutions that can both reveal public preferences and priorities and create incentives for their delivery. This demands a degree of devolution and spatial differentiation.
3)      How should public support for farming be offered? E.g. Direct payments, Agri-environment payment, or other forms of financial (grants or loans)/non-financial support (advice, knowledge-exchange).

It appears to be generally accepted that the direct payments as delivered under Pillar 1 of the CAP are ineffective and inefficient and there seems to be little effort being made to retain them. The implication then is that future payments should be applied in order to deliver more specific objectives.

Given relatively poor increases in agricultural productivity, potentially stronger international competition in agricultural markets and likely shortages of labour due to reduced availability of workers from the EU, there will be demands for government support for investments in farm businesses. This will aim to promote the adoption of new technologies to increase productivity and substitute capital for labour. This may extend to research and development, and to agricultural extension services.

With regard to wider countryside management, there is considerable interest in developing schemes that pay by results and where funds are allocated on a competitive basis. There is some experience with both of these approaches, but there are also limitations. So we may expect some greater exploration of these approaches but also some continuation of payments for the land uses and farm practices that are expected to deliver the desired ecosystem services.

A UK policy also provides the opportunity to use public funding in more imaginative ways, such as for the purchase of land, acquisition of rights in land or support for intermediation and collective action.
4)      Do you see any potential for private financing to facilitate/replace public payments?

Considerable private resources are already committed for the conservation of the countryside both by private individuals and through non-profit conservation organisations. But this is not well co-ordinated with or encouraged by public expenditure. There are opportunities to support the development of partnerships amongst groups of private, public and non-profit stakeholders to develop long term conservation and restoration programmes especially at a larger scale than has generally been the case in the past.

Voluntary contributions in support of such initiative may be incentivised through engagement with conservation organisations and matched funding where public support is added to support, in cash or perhaps in kind, generated from the private sector.


5)      What direction do you believe future trade policies need to take, and how might this affect future agri-environment policy?

This is a complicated issue with a risk that concerns for the countryside may be pushed aside against other national international trading issues and objectives. Access to the UK food market must be a, if not the, major attraction for third countries to reach free trade agreements with the UK. The UK is likely to be in a weak position in resisting this.

Brexit negotiations have yet to work through the implications and consequences of seeking continuing free trade with the EU while at the same time having the opportunity to reach free trade agreements with third countries that go beyond the agreements that those countries have with the EU.

The outcome of negotiations will have major consequences for agriculture, land use and the environment. Trading arrangements determine both the levels of imports that can compete with UK agricultural producers and the opportunities for agricultural exports. This is not simply about tariffs on imports. There are issues, for example, of the potential to continue with exports of lamb to the EU or to substitute domestically produced horticultural products for products currently imported from the EU.

Lower returns to land reduce the cost of incentivising reductions in the intensity of farming in order to protect the environment because it reduces the income foregone. But at the same time they increase the costs of maintaining the viability of farming operations in less productive areas, especially in the uplands, where the maintenance of farming is seen as the means to protect rural landscapes and environment.

Thus trade policies need to be closely aligned with domestic land and agricultural policies in order to deliver desired outcomes within particular localities.
6)      What impacts might the changes you envisage have on farmers and land managers?

There are many implications, some of which have been mentioned above.
6a) What might the wider impacts be on the countryside/rural communities?

Farming represents a rather small proportion of the economy, even in rural areas. Similarly few of the inputs for farm businesses are drawn from the local economy. Thus the direct impact of changes in farm profitability on rural economies is likely to be modest. There are though issues and opportunities associated with the sectors related to farming and rural landscapes, such as the adding value to agricultural products and developing sources of income based on recreation and tourism.

We should be establishing a rural development policy that operates separately from any agricultural policy and that recognises the very great differences between different rural areas and the challenges facing those who live in them.
6b) How might you propose to mitigate the impacts? Do you think any additional policy measures will be necessary and what might these be?

As mentioned we need to integrate agricultural, land and trade policies and policies need to be better targeted towards identifying local priorities and incentivising their delivery.
7)      What impacts might the changes you envisage have on the environment (farmland biodiversity; wider biodiversity; soil health; water quality etc.)

There is potential to develop a comprehensive ecosystem services approach that integrates the delivery of different services within particular localities. This would be implemented through the development of national and local procurement funds whereby land managers and others can receive payment for the delivery of portfolios of ecosystem services across the areas of land over which they have control. It is these land managers, not government, who have the best information on the potential for land to deliver combinations of services and the direct and opportunity costs incurred. We have explored this approach in our policy brief ‘Envisioning a British Ecosystem Services Policy’.
8)      How might your proposals secure the government’s commitment to “leave the environment in a better state than we found it”?

This requires a continuation of a well-funded, better targeted and broadly based policy. It also means that we cannot sacrifice the agricultural sector in the pursuit of unlimited free trade agreements with third countries.
9)      What impacts might the changes you envisage have on visitor/tourists’ perceptions of the countryside?

The countryside has particular resonance with ideas of national identity and this might be something that could be harnessed in seeking a creative UK approach to countryside policy after Brexit. This might be able to engage the public in support of effective rural environmental policy as well as enhancing the attractions for tourism.
10)   What would be your 25 year vision for the future of farming, the environment and the countryside in the UK?

A resilient countryside that supports a profitable agricultural sector and delivers a broad variety of ecosystems services on a sustainable basis.

(Yes, it is hard to express this without falling into platitudes)

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