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This is an agricultural revolution

  • By: "Prime" Ag News
  • Jan 24, 2020

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After the United Kingdom leaves the European Union at the end of the month, it will sever ties with Europe’s farm subsidy policies—and to many researchers, that is a good thing. This week, the U.K. government proposed radical changes to £3 billion a year in agricultural spending that will focus the money on benefits to climate, ecosystems, and the public. “It’s dramatic and utterly critical,” says Dieter Helm, an economist at the University of Oxford. “This is an agricultural revolution.”

Under the bill, introduced to Parliament this week and expected to become law within a few months, farmers will be given subsidies not simply for cultivating land—the current EU system—but for delivering “public goods.” These include sequestering carbon in trees or soil, enhancing habitat with pollinator-friendly flowers, and improving public access to the countryside. To ease the transition, direct subsidies will be phased out over 7 years beginning in 2021, and the new payments for environmental services will be tested in pilot projects. “It certainly could have really positive benefits for the environment,” says Lynn Dicks, an animal ecologist at the University of Cambridge who studies wild pollinator conservation.

After the destruction and starvation of World War II, European tariffs helped protect farmers from foreign competition and subsidies boosted their yields. “It was just about production, it didn’t matter what you did to the environment,” says Ian Bateman, an environmental economist at the University of Exeter. New lands were brought under the plow and hedgerows were ripped up, leading to erosion. Excessive fertilizer and pesticides polluted air and water. And the loss of habitat harmed pollinators and other wildlife. The cost of the EU common agricultural policy (CAP) wasn’t just environmental: Up through the 1990s, the subsidies consumed 80% of the EU budget. Even today, the €59 billion CAP represents about 40% of EU public spending.

Brexit will now let the United Kingdom go its own way. The new bill addresses only England, because the United Kingdom allows Wales, Scotland, and Northern Ireland to determine their own agriculture policies, but Helm expects they will move in the same direction.

Under the new scheme, to be overseen by a body created by the Department for Environment, Food & Rural Affairs (DEFRA), total funding will not change, but some farmers will be impacted more than others. To be profitable, beef and sheep farms rely on subsidies more than dairy and wheat farms and, without them, they might be abandoned in hard-scrabble places such as in Scotland. But Helm sees a lifeline for some of these farms: payments for sequestering carbon with tree plantations or restored peatlands. Grants for restoring heritage buildings or enhancing landscape beauty could also help sustain farms while boosting tourism. Other payments will help farmers adapt to climate change or reduce their environmental impact. Subsidies for equipment to inject manure into the soil, for example, could reduce both air pollution and the need for chemical fertilizers.

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About one-eighth of existing U.K. farm subsidies pay for environmentally friendly activities such as maintaining hedgerows and other habitat, and those efforts will expand. To get more value for money, DEFRA plans to use auctions, in which farmers or other land managers would bid for government contracts for environmental services. Water companies have already used reverse auctions to select farmers who are paid to use less fertilizer and different pesticides, lowering water treatment costs. “The impact has been amazing,” Bateman says.

DEFRA wants to tailor payment schemes for different regions but figuring out how to channel payments for maximum benefit will require research. Carbon sequestration payments could backfire if used in the wrong places. For example, planting trees in peatlands can dry them out, releasing more greenhouse gases than would ever be sequestered by the trees, Bateman says.

Socio-economic models will be needed to study the impact of the policy changes on farms and rural communities, adds David Harvey, an agricultural economist at Newcastle University. Much remains to be determined. Will farmers only get payments if air and water quality are shown to improve? And over what time scale? Who will measure it? “You’re left with more questions than answers,” says Mark Sutton, a nitrogen expert at the Centre for Ecology & Hydrology.

Farmers—especially owners of vulnerable small operations—have eyed all these changes warily. The National Farmers Union, the United Kingdom’s biggest agricultural trade group, lobbied for more emphasis on supporting food production. The final bill stipulates that the government will “take regard to the need to encourage the production of food by producers in England,” which the union calls a “robust starting point” for designing the new support programs. But Bateman and others worry about backsliding toward payments that support private profits, rather than environmental progress.

Other countries will be watching closely, too, says Alan Matthews, an agricultural economist at Trinity College Dublin, who studies European agricultural policy. “If it’s been successful, that will be a very powerful argument for the Europeans to follow.”

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