Farmers have just six or seven years to get their businesses ready for the tremendous changes which Brexit could bring, according the Central Association of Agricultural Valuers (CAAV).
Speaking at the Association’s spring conference in Cheltenham last week (7 March), Jeremy Moody, secretary and adviser to CAAV, said: “Brexit as an event may happen in March 2019 – but it could be that nothing much happens after that during the transition period, until perhaps the end of 2020. Brexit will be more of a process, with changes to policy phased in after that.”
While the Government has guaranteed the total present money for agriculture until the end of this Parliament (March 2022 at the latest), that does not mean the money will be spent in the same way. “In England the Government proposes to cut some Basic Payment money in, say 2021, and remove the whole payment in the following years,” said Mr Moody. “Spending will shift towards environmental payments, productivity and other public goods.” Wales, Scotland and Northern Ireland will make their own decisions but will see similar pressures.
However, the changes ahead are far greater than simple alterations to farm support payments, warned Mr Moody. “The real challenge is around third country trade deals and tariffs on agricultural imports. I think we’re likely to end up with tariff-free trade with the EU, but frictionless trade seems less likely.”
In future, farmers will have to become more competitive, whether to succeed in commodity markets, differentiate products to create particular markets, or find alternative income streams from their property, explained Mr Moody. But to meet those demands, they need to start planning now. “Some farmers are already talking about it, some have stopped talking about it in the hope it will all go away, and some will find it just happens to them. It will be the top quartile of businesses which are best placed to handle this level of change.”
Given recent announcements on future Government policy in England, farmers will likely see more support for improving business efficiencies alongside greater environmental focus – and family businesses need to identify who is best placed to embrace that change. “We’re on the cusp of a technological revolution, but who will best handle it?” questioned Mr Moody. “Scale is probably still a goal for commodity producers, but for many it will be about farming smarter not larger.”
This – and potential changes to taxation – are likely to lead to considerable restructuring of land occupation and use in the longer-term, he warned. “Brexit is going to release change that has been pent-up by the Common Agricultural Policy for years – and it’s going to collide with change that is coming down the track. But if we don’t seize the opportunity it presents, it will end up being something that is done to us rather than something we choose to control.”