The Effects Of Brexit On Farms And Farming

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There’s a certain amount – OK, a vast amount – of gross illogic being bandied about in this discussion of what will happen to British farming upon Brexit. From the National Farmers’ Union, in favour of the farmers, side an insistence that this is a Gotterdammerung which simply cannot be allowed to happen. British farmers will just go bust in their masses and we can’t allow that, can we?

Well, yes, obviously we can. The impact will really be upon the price of farmland and will thus mean that the landlords lose out. We know this from David Ricardo back in 1817. Any addition to the annual income of a piece of land is a rent, it then gets capitalised into the value of the land itself. The Single Farm Payment is a payment for owning land, it’s an addition to that rent and it gets capitalised into that value of the land. Remove it, remove the EU subsidies, and land values will go down. We’ve actually got the estate agents for farmland – Savill’s say – telling us all this, British farmland is falling in value because Brexit.

There are 55,000 farming members of the NFU and 65 million consumers out here. To me it is pretty obvious that our interests trump theirs. Thus I argue for Brexit and a return to those halcyon days of unilateral free trade in food, as we had starting in 1846 when we repealed the Corn Laws. You know, the one single event of the 19th century which most improved the living standards of the general population. And led to significant falls in the price of farmland in the 1870s and again in the 1890s, destroying the great aristocratic agricultural fortunes.

Sounds absolutely great to me.

So, Radio 4’s The Food Programme interviewed me on this. I start around 19.30 in.

Some people don’t like this line of argument:

However, the programme also interviewed Tim Worstall of the free trade, neoliberal think tank The Adam Smith Institute who thinks he has spotted an opportunity from leaving without a deal. Tim Worstall said: “The WTO tariffs are a maximum that we may charge if we wish to. If we don’t wish to charge them, we can charge 0%. Nothing. And, if we were being sensible we would charge nothing. Me? I argue for consumers. So let’s have cheap food. Let’s not have tariffs on food from anywhere. If farmers can’t make money on that situation, well farmers can go out of business.”

Vicki Hird, food and farming co-ordinator at Sustain responded this afternoon: “The Adam Smith Institute suggests that after Brexit the UK should simply remove all tariffs on food, casually and carelessly acknowledging that this would put UK farmers out of business. These comments are an insult to our farming communities. He says he argues for consumers but what he is proposing would wipe out the livelihoods not just of farmers, but farm workers and food producers all along the supply chain. It would destroy rural cohesion, devastate our rural communities and change irrevocably our much-loved rural landscapes. “Even if our farmers could compete against cheap, zero tariff imports, they would have to lower our food standards in order to do so. Mr Worstall claims to speak for consumers and yet appears to be unaware that British consumers have already said they will categorically not trade away their high food quality.”

To which the answer is great. Super, bring it on.

Let us, for the sake of argument, accept the varied contentions there. That imported food will only be cheaper because it is produced to lower standards. This isn’t correct of course, food might be cheaper because land is cheaper, there’s more sunshine elsewhere, more rain, or labour’s cheaper, there are many reasons why this might be so. Adam Smith himself pointed out that we can grow grapes in Scotland but it’s cheaper to buy the wine from Bourdeaux. We don’t all get our winter lettuces from Andalucia because of some nefarity over standards but because of weather differences. But OK, for argument’s sake, we’ll accept that proposition, standards are the determinant.

The British consumer categorically will not trade away standards. Great, then we’ve nothing to worry about. This cheap and bad foreign muck will turn up in the supermarkets, no one will buy it and the shops will stop offering it then. We have no need to have laws, or tariffs, or restrictions, or bans, because as is said – we Brits won’t eat it.

The only reason we do need tariffs, bans, restrictions, is because people will indeed buy and eat it. If they won’t, it won’t sell. If it will sell in the absence of the tariffs then that means people do in fact want it. The very demand for tariffs is an admission that people want it, that they’re not categorical in their refusal to have lower standards.

It’s as with banning a supermarket to save the High Street. If everyone does want to shop in a thriving High Street then the competition from a supermarket doesn’t matter for no one will shop there. To insist upon banning the supermarket is an agreement that some people will shop there for that’s what you’re insisting. People will preferentially shop in the supermarket not the High Street. There couldn’t be a problem if you didn’t actually believe this.

So it is with food. As I mentioned in the programme, chlorine washed chicken is only a problem if you think people will happily buy it. If you insist that no one will then it being legal to import makes no difference. For you are insisting that no one will buy it therefore no one will buy it even if available. So, it doesn’t matter whether it is or not, does it? It’s only if people will indeed buy the American muck that there could possibly be an argument to ban it.

Think on it. Through the EU we’ve a free trade treaty with Peru. It’s entirely legal to sell guinea pig there for eating – it’s delicious too. It’s entirely legal to sell guinea pig for eating in Britain. Yet no one does import it because the Brits won’t eat it except on those trips to Machu Picchu and just after the cocaine tea. Things no one will eat don’t appear on the food shelves because that’s capitalism.

Sure, opinions differ about Brexit. But can we at least be logical as we chew through the effects of it? Unilateral free trade post-leaving will be of immense benefit to all consumers of food in Britain. And what we don’t want to eat won’t get imported anyway. We should indeed set that against the interests of those 55,000 farmers, or at least those who own the land they farm. As we do so we’ve got to be accurate in our allocation of costs and benefits and to whom they apply. My answer is that we trump them 64,945,000 to 55,000 and yours is?

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Quentin Vole
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Quentin Vole

There doesn’t appear to be any requirement from the WTO that local farmers should not be given subsidies if we so wish. The EU does this on an absolutely massive (and massively stupid) scale.

Bernie G.
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Bernie G.

The British consumer categorically will not trade away standards.

Are you crazy? Two-thirds of British consumers shop at Aldi and Lidl!

Matt Ryan
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Matt Ryan

Greater than 50% of things at Aldi/Lidl are as good or better than more expensive supermarkets. The trick is to separate the good from the crap.

Pat
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Pat

If – if- British food is of higher quality than foreign, then rich foreigners will be pleased to buy it. Meanwhile poor people will have access to cheaper food
Everyone should be happy.

Q46
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Q46

Standards is the word the EU uses in its Enigma machine. Decoded it is, Protectionism for Producers.

Farmers must be protected; fishermen may be dumped overboard.

Bernie G.
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Bernie G.

As that plonker Michael Gove made clear, the future for British farmers is high-quality produce, the sort of thing we already sell to France and Spain (people that appreciate food and are willing to pay for it – think of all those continental trucks queuing at the quay when our boats are landing fish at Brixham and Peterhead).

Christian
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Christian

As an affluent consumer I insist on high and costly standards. One way to mitigate those costs is to insist that people who don’t share my preferences must also support the businesses that I favour. I find this gives these businesses economies of scale and wider distribution, thus making their produce cheaper for me and more convenient to buy. I am also gratified by guiding the poor towards my own educated tastes, rather than being corrupted by their own ignorant ones. Finally, in a society without religion I find shared food hygiene standards and organic production values help fill my… Read more »

Q46
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Q46

Harrods rules!

Chester Draws
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Chester Draws

New Zealand removed farm subsidies. It did wonders for the country’s budget. And its farmers continue to thrive.