79% of Scotland's land mass is dedicated to agriculture (Scottish Government (2016b). It is the foundation of the food and drink sector, it strengthens the social fabric of rural communities and provides services including flood protection, clean air and water, and a rich and varied wildlife (Scottish Government, 2016a). What happens in the agricultural sector has implications for the whole of Scotland.
This briefing explores 10 issues.
1. Whilst in the EU, Scotland is part of the Common Agricultural Policy (CAP). Total funds of £4.6 billion would have been available to Scotland between 2014 and 2020. Once the UK leaves the EU, it will leave the CAP and access to these funds will stop.
2. Without EU subsidies many Scottish farms are not profitable. There is currently no information on what will replace the CAP, once the UK leaves the EU.
3. Scotland receives 17% of the total UK CAP budget. Once the UK leaves the EU, if population share was used to allocate the budget, Scotland would receive around 8%.
4. Under the CAP, UK agricultural policy shares a common framework, although with considerable regional variations. Once the UK leaves the EU it is unclear whether there will be a single UK agricultural framework.
5. New domestic agricultural policy will be constrained by WTO rules. The UK will need to ensure that agricultural support across all devolved administrations fits within WTO commitments.
6. Currently, Scottish farmers have to comply with EU regulations. Once the UK leaves, there may be an opportunity to reduce regulation.
7. Whilst in the EU, imports from non-EU countries into the UK are subject to the common external tariff, and the UK shares the EU's inward quotas. Leaving the EU, the UK will need to negotiate trade agreements with the EU and non-EU countries.
8. Currently UK agricultural products have tariff free access to the European single market. Once the UK leaves, depending on negotiations, Scottish farmers may be subject to tariffs on exports into the EU single market.
9. Within the EU, citizens can work in any member state. Scotland's soft fruit and vegetable sectors rely on EU migrant labour during harvest. It is unclear whether such workers will be available to the agricultural sector once the UK leaves the EU.
10.EU membership allows participation in EU protected food name schemes such as Protected Geographical Indication (PGI). Future participation will need to be negotiated.