Beyond Brexit

It is beyond question that the support payments derived from the CAP are hugely significant to the viability of Scottish agriculture. The vast majority of farm business and crofts remain highly dependent on Pillar 1 direct support payments.

In fact, at a time when the total amount of support available has been in decline, its 'value' has increased as almost all commodities have seen prolonged downward pressure on market prices. It is sobering that some 74 per cent of the TIFF figure equates to the amount of support Scottish agriculture receives.

Continually rising input costs, both cost of production and compliance, and low and often volatile market returns have prolonged the cost-price squeeze that Scottish agriculture has faced for a number of years. This undoubtedly suggests that support for Scottish agriculture remains essential and from now on has to be more targeted, to underpin active farming and crofting, while farm businesses, processors, retailers, and policy makers all need to focus on cutting costs and ensuring fairer margins along the entire supply chain.

But it is equally clear that continued direct support for active farmers and crofters will remain vital to sustain communities. It is a way of life, as much a part of the social and cultural fabric as it is part of the economic infrastructure. Maintaining communities through farming and crofting is more significant in Scotland than it is in other parts of the UK.

Farming and crofting also provide a range of public goods for which market mechanisms rarely, if ever, exist to reward the farmer sufficiently, such as protecting the environment, sustaining communities in remote areas and maintaining a national food producing capacity.

As there is no market for these agricultural services, they must continue to be supported through adequately funded, designed and implemented rural development measures. These public benefits should also be delivered with maximum efficiency through a new contract between farmers and society. An appropriate level of regulation should continue to play a role in delivering public goods, using as light a touch as possible to generate the desired outcomes.

Attachments:

• Beyond_Brexit_-_October_2016_-_Trade.pdf

Attachments:

• Beyond_Brexit_-_October_2016_-_Agricultural_Policy.pdf