The UK farming industry uses 70% of the land in the UK and its efforts make the country 76% self-sufficient in home grown food.
It employs an estimated 400,000 people and the total income from farming in 2015 (the most recent figures available) was £3,769 million, contributing around £10.7 billion to the UK economy.
As a business farming cannot be short term and many decisions are made looking five years ahead.
But farming as a business is not now and never has been easy because of the many pressures farmers face, both natural and man-made. It is weather-dependent, with seasonal peaks and troughs and at the same time subject to well-known pricing pressures from the food producers and the large food retailers further up the supply chain.
There is no doubt that the UK’s decision to leave the EU is likely to have a significant impact on farming as a business.
Firstly, UK farmers have been used to a subsidy under the Common Agricultural Policy (CAP) that contributes an estimated 55% of farmers’ incomes, a total of £3 billion in 2015, according to data published in the Financial Times in late 2016.
While the Chancellor has said that the Treasury would replace any shortfall in EU funding to farmers that might arise between now and the end of the decade, there has been no word on what would happen after 2020.
This leads to a second threat, which is the pressures that farming faces from competitors both in and outside the EU after Brexit. There has been press commentary on a US trade deal that will expose UK to the lower standards for US farm products that allow hormone-treated animals and GM crops while European farming will presumably remain heavily subsidised giving it a competitive advantage over the UK.
Thirdly, many farming sectors rely heavily on seasonal labour for harvesting fruit and vegetables and in the Eastern Region, for example, labour from the EU has been crucial for the crop picking and packing period. Given that one of the primary issues on the minds of both those who voted to leave the EU and on the Government has been numbers of immigrants in the UK and in the absence of sufficient numbers of UK workers, the prospects of losing access to those workers is a major concern for farmers.
A final pressure that has been a well-rehearsed bone of contention for a number of years but has been given added impact by the devaluation of £Sterling since the referendum. With large retailers already passing on higher prices to shoppers from imported foods, the likelihood is that they will use their buying power to continue to squeeze farmers in order to keep their prices as low as possible.
Given all these pressures the challenges to the viability of UK farming are considerable.
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