The UK’s food and farming industry: a turning point between threats and opportunities

One year after Brexit, many are the issues discussed, such as EU citizens’ rights, freedom of movement, but we have barely heard about the effects on the British food system. It has remained out of radar, but it should be considered alongside the other topics, because its under-consideration could lead to significant negative consequences.

Relevant reforms will be needed in the food and farming industry and the responsibility will weight on Michael Gove’s shoulders, the new secretary of state at Defra.

The main features of the sector, that award it such a central importance, concern the fact that:

  • It is the biggest manufacturing sector in UK, even larger than the combination between car and aerospace industries, and it returns over £28 billion/year;
  • Its exports are addressed especially towards Europe;
  • The old continent represents also the biggest market for UK’s imports, in fact a quarter of its consumption is produced there;
  • It employs over 13% of the national workforce inside the food chain, from the farming to the selling;
  • Europe places a great number of migrant workers on the English labour market, and this results in an essential bond, whose modification could undermine the industry;
  • Europe finances the sector through subsidies that represent 55% of the total farm income in UK.

Considering all these reasons Brexit may represent both a threat and an opportunity for the food and farm industry and an incentive to reform this outdated system. In addition to this, there is a controversy between those that believe subsidies are needed and those who think that food industry is like other sectors. In fact, farmers received about £3 billion from the much-reviled common agricultural policy last year, of which over £2 billion in direct payments and £600 million in rural development payments. Many people have put pressure on the Treasury to make the direct payments end, because farmers have to be more competitive without subsidies in international markets. However, they did not take in consideration the fact that without subsidies even the largest producers struggle to compete in such a globalized market. For this reason, Britain should create a new subsidy system independent from Europe.

Another critical point regards the regulation and in particular the 4,500 European rules on food, farming and environment, whose standards are dictated by the Department for Environment, Food and Rural Affairs. “Leaving” supporters tend to reject the Brussels bureaucracy, but actually British do need a system of law to manage agricultural trade deals and import/export.

One of the most burning issue regards migrant workers, because they are needed for the industry and the ending freedom of movement will impact on it. To make it worse, the government should conciliate (or at least should try to) this necessity with the Conservative commitment to reduce immigration. The solution could be found by creating a new “After- Brexit Bureaucracy” to allow the 500.000 foreign workers to remain and work in UK, for the benefit of Britain itself, its farmers, food processors and food manufactures.

In addition to this, we should remember that the core civil servants, who have to take these decisions, suffered the biggest cuts of the latest years (since 2015) and much expertise must be shifted, in order to deal with Brexit consequences.

Gove has to draw the new agriculture bill, which will drive UK out from the communitarian agricultural policy. This is a turning point for UK, because it has been regulating the agricultural sector for 40 years, and the 80% of British food legislation came from EU negotiations.

Gove’s trustworthiness is constantly put in doubt, especially by environmentalists. In fact, the Green party leader, Caroline Lucas, believes he is unsuitable to be Defra secretary, because he has always showed to be against measures to halt climate change and children’s awareness on the subject.

On the other hand, big farm and landowner-lobby groups hope that he will be the appropriate person to cover this charge since he has a high profile and a great influence, to make their voice heard.

In a nutshell, the future of UK’s food and farming industry will depend on his approach: will it be the same he had regarding the education or the one that lead to the prison reform?

According to his economic liberal ideology, Gove would prefer to halt the subsidies after Brexit, even if he committed his department to maintaining them until 2022. But, some adverse events already occurred after the referendum, for instance the depreciation in sterling, the increase of food prices and the raising inflation, and these may change his promise.

Without no more EU’s constrictions and rules, Gove has “carte blanche” to reform the food system and industry. We can only hope he would make the best choices both for United Kingdom and Europe, and for the thousands of people employed and involved in the agro-food and farming sector.