This article was originally published in Summer 2019.
Farming in the UK is changing faster than anyone realises. There will be winners – and losers…
The UK farming industry is facing a period of radical change that most farmers are underestimating both in extent and speed. There will be winners and losers, with the split between the two largely determined by how quickly individual farmers can adapt. The changes in the farming industry will themselves have profound impacts on the environment.
What are the main catalysts of change, and how can farmers best embrace the opportunities that will arise?
Some adaption strategies can be implemented gradually while others will require urgent action. The good news is that central government can assist with grants – and in some cases there will be scope for private investment capital.
Successful farmers will need to be wholly open to ideas, invest time to investigate the options, and change elements of their lifestyle to succeed through this period of unprecedented change.
The UK’s exit from the EU
Assuming the UK exits the European Union (either by way of a no deal or after a two-year transition period), farming support from Europe in the form of Common Agricultural Policy (CAP) grants will end at some point – potentially very soon.
The UK’s Department for Environment, Food and Rural Affairs (DEFRA) will then determine how farming is supported rather than Brussels. The Rural Payments Agency (RPA) that currently administers the application, assessment and payment processes for DEFRA will be paying out money directly from the Treasury. One upside to farmers of the change will be the removal of exchange rate exposure, as RPA grants are currently calculated in euros and converted to pounds for payment. While the sums involved – around £2 billion per annum – appear modest, these grants are often the difference between absolute annual losses and the most modest of surpluses. The average grant is just under £20,000 per annum.