Agricultural subsidies should be re-directed, says think-tank

2 Aug 17

A post-Brexit agricultural subsidy policy should be built around the needs of consumers, the centre-right think-tank Policy Exchange has recommended in a report.

The Farming Tomorrow report said the European Union’s common agricultural policy had cut productivity by reducing competition, which supported inefficient farmers and increased costs for consumers.

After Brexit the UK could unilaterally abolish tariffs on food products, and reform the agricultural subsidies regime to reward farmers who deliver public goods like biodiversity and flood prevention.

A new British agricultural policy should focus on payments for ecosystem services and phase out production subsidies and income support by 2020, it said, with some subsidy redirected towards rural infrastructure and agricultural research and development.

Ending direct subsidies for agricultural production and income support would also free up government revenue to fund other priorities, such as the NHS, the think-tank concluded.

Policy Exchange’s research director Warwick Lightfoot – formerly an adviser to three Conservative chancellors – said: “Leaving the European Union allows us to think again about agricultural policy from first principles.

“The starting point for policy reform must be the consumer.

“The EU’s historic reluctance to open up trade in food products has repeatedly stymied trade deals and led to higher prices for consumers and a distorted farming industry.”

The paper also suggested the government should work to find farm land that was “environmentally suitable” land that could be used for housing or commercial development, sharing the planning uplift with the farmer.

Self-sufficiency in food production should not be the goal of the UK’s agricultural policy, the Policy Exchange recommended.

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