As Brexit materializes the UK will need to develop its own agricultural and trade policies. The model the UK chooses will need to cope with a range of global challenges including climate change; rising risk of animal disease; downward trends in commodity prices; and shifts in demands from changing diets.
A new paper, The Implications of Brexit for UK, EU and Global Agricultural Reform in the Next Decade, written by Ian Mitchell and published on Thursday 2 November 2017 by Chatham House, assesses the models and policy options and concludes that significant opportunities for Britain lie ahead.
Currently high-income countries adopt one of four models: sector protection; de-coupled subsidy; insurance; and market-oriented. For the UK, only a market-oriented model would enable the country to benefit from free trade and more diverse global outreach, while keeping the government’s promise to improve the environment for the next generation.
Applying the market-oriented model in the UK would present opportunities for lower prices for consumers, lift the economy’s productivity and make substantial budget savings to support the environment and public finances. It would also mean significant, and politically challenging, disruption for agricultural producers and the transition impact and the risk of residual rural social-economic problems would need to be actively managed by government in part through savings from reduced subsidies.
However, there is now an opportunity for the UK to lead international market-oriented policy reform, which would closely align environmental, climate, and agricultural policies and redesign subsidies to better achieve environmental commitments. Globally, there is an absence of existing leadership on these issues and the UK has a significant opportunity to position itself as a pioneers.
Ian Mitchell, Associate Fellow with Chatham House’s Energy, Environment and Resources Department and author of the paper, said, “There appears little prospect of meaningful reform to the EU agricultural model even though it still absorbs around 40 per cent of the EU’s budget. Successive UK Governments over the past two decades have made the case that agricultural policy should become more market-orientated – and the UK now has that opportunity to achieve that aim”.
A copy of the paper will be available on the Chatham House website on Thursday 2 November 2017.