After Brexit, the UK has great potential to have a vibrant agricultural market that is beneficial for consumers. The Institute of Economic Affairs’ new report,Fertile Ground: Opportunities and challenges for UK agriculture, sets out how this can be done in two key areas: trade and regulatory protectionism.
It is vital we promote a greater reliance on markets in the industry and reduce protectionism, but we must also be realistic about the impact of these changes on UK farmers. A gradual approach, coupled with direct payments that are more targeted to actual farmers – and not simply large landowners as is currently the case – would be a good starting point.
The benefits of free trade are well established in all branches of economics and, contrary to popular belief, the opportunity for cheaper food imports benefit more than just consumers. Expounding free trade in the farming industry is essential in the long run to ensure that producers receive accurate price signals regarding what to produce. If they do not receive that information, then sooner or later they will have to adjust, and it will be all the more painful.
More controversial perhaps, is regulatory protectionism. The approach under current EU rules here may be less well known, but it is no less damaging. Protectionist rules, with no sound scientific basis, keep out affordable imports that could otherwise benefit the poorest in society. A classic example here is the much maligned ‘chlorinated chicken’. As our paper makes clear, US poultry is in fact significantly safer than poultry reared and produced in the EU. Pathogen Reduction Treatments (which rarely include chlorine) are used to remove harmful bugs and parasites and have been found to be both safe and effective by the EU’s own regulator in 2005 and 2012.
The data bears this out. In 2016, the confirmed incidence rates for Salmonella and Campylobacter were 20.4 and 66.3 per 100,000 population respectively. Comparable US data shows rates of only 15.45 and 13.45 per 100,000 population respectively. Given that US citizens eat more than twice as much poultry meat per head of population, the difference in contracted poultry-related illnesses here is startling.
The other commonly-cited justification for a protectionist regulatory policy – at least regarding food – is animal welfare. Critics point to the lower legislated standards in countries like the United States. This, however, largely misses the point. The US deliberately adopts a different approach to the EU on these areas, focusing on informing consumers rather than prescriptive methods of production.
When the EU introduced a ban on battery cages for egg production, the result was not an increase in free range eggs, but the use of ‘enriched cages’ only slightly larger than the previous ones. Enforcement was also patchy, with both Italy and Greece referred to Court of Justice of the European Union for failing to comply. In contrast, US producers are increasingly switching to free-range production due to consumer pressure. McDonalds is going cage free in the US, and more than 60 other large food companies have pledged the same over the next decade.
Outside the EU, the UK should bear in mind that it is consumers who gain from reduced barriers to imports, and who are ultimately responsible for raising production standards. And the benefits of smarter regulation do not end there. The aggressive EU application of the precautionary principle prevents UK farmers from adopting innovations that could transform agriculture. Regulations banning genome-edited crops and GMOs risk seeing UK farmers left behind by more efficient global producers, and all of society paying a higher environmental cost. New crop strains, banned in the EU, have seen pesticide use in non-EU countries decline by over 35% in the last quarter century. Yields are up over 20%. The result of this transition is that more food can be grown using less land (a boon for conservation and the environment) and fewer harmful pesticides.
When the UK leaves the EU, we should look to lowering our tariff and non-tariff barriers and reforming our regulatory environment to allow farmers to innovate. Globally, the agricultural industry is changing, and we can no longer ignore or try to divert from this direction of travel.
Rather than keeping the world out, we should focus our efforts on opening up our markets, forming better, more effective regulation and helping vulnerable producers’ transition through life outside the Common Agricultural Policy.