Support funding could be cut by 50% post-Brexit

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Direct farm support funding may fall by as much as 50% in a post-Brexit scenario, according to Michael Haverty, senior agricultural economist with Andersons Farm Business Consultants.

“This seems to be the thinking within Whitehall at the present time,” he said.

Haverty linked the concept of a hard Brexit with an expectation of significant cuts in Whitehall’s future commitment to support agriculture.

“And the reverse may well be the case if we arrive at a soft Brexit arrangement.

“But there will be flexibility to allow regional administrations to top-up future national farm support commitments.”

Haverty was speaking at the recent annual meeting of the Sperrin Producers’ Co-op. He said that both London and Brussels wanted to arrive at a long-term Brexit settlement, which would allow for the establishment of a free trade deal between both jurisdictions.

“But this will take many years to finalise. So we may well see the establishment of a provisional trade deal, once the formal two-year Brexit negotiating process has run its course.”

Haverty made it clear that the Brexit negotiations must be formally wound up 24 months after the UK triggers Article 50 of the Lisbon agreement.

“On the basis of such a development taking place this month, a negotiating window will then automatically open up, which will end in March 2019.”

Haverty confirmed that agriculture in the UK had benefited from the drop in value of Sterling against the Euro over the past number of months.

“This has been a direct consequence of the EU referendum. A weaker Sterling encourages exports out of the UK while, at the same time, making imports relatively more expensive.

“Andersons is forecasting that Sterling will remain relatively weak relative to the Euro over the coming months. But that could change if the Brexit negotiations throw up issues that have not been factored into current projections.”

The Andersons’ representative confirmed that the actual exit agreement for the UK requires a qualified majority at EU-27 member state level to get it over the line.

“A simple majority vote involving members of the European Parliament will also be required,” he added.

“But the issue of the UK securing a free trade deal with the EU -27 is another matter altogether.