New government may row back on farm subsidies

The Truss government is reviewing farm policy and may delay the phase out of the domestic version of the CAP Basic Payment due in 2027.

The NFU has been banging the food security drum, but the Government seems to be more concerned about breaches in the blue wall after two rural constituencies were lost to the Liberal Democrats in by-elections.

The Treasury has always been opposed to the extent of farm subsidies, both because of their cost and the weak relationship with desired policy outcomes.   Delaying their phasing out would cost money, but with the Treasury under new management, fiscal prudence has been effectively abandoned by what is a new Government.

The Government is also reviewing plans to make environmental payments for 'public goods' under the ELMS scheme.  The roll out of this has been slow, but farmers taking part in the pilot were angered by a press report that it could be scrapped.

Conservation groups had already made clear their anger at the threat to environmental rules in the investment zones announced in last Friday's 'mini' budget.  The National Trust commented that scrapping environmental payments would 'squander one of the biggest Brexit opportunities for nature.'

Farmers are also concerned that a reversion to payments based on land area rather than public goods would be more vulnerable to being reversed under a future government.

No final decisions have been taken, but kites are being flown.

Energy costs hit food supplies

UK growers are scaling back production in greenhouses as energy costs increase, a pattern that is replicated across Europe.  Crops that require intensive heating in colder climates such as tomatoes, cucumbers and lettuce are the most directly affected.

However, the energy crisis is impacting the EU food supply chain more directly.  Bakers, dairy farmers and other producers, including growers of sugar beet and olives are struggling to pay bills.  The price of inputs such as fertiliser and animal feed has shot up, alongside rising refrigeration and transport costs.

The UK's support plan for small businesses lasts just six months and so far lacks detail.     It is claimed that 75 to 80 per cent of UK salad growers will not plant next year.

In the Netherlands, which accounts for a quarter of world tomato exports, many glasshouses are going dark.  The largest tomato supplier in Sweden and Denmark is also switching off this winter.  Growers in Spain and Morocco may not be able to fill the gap.

In Italy, where growers are already struggling with a drought, it is estimated that a third of farmers are operating at a loss.  Monthly energy bills have typically tripled and fertiliser costs are up fourfold.  Many farmers on fixed contracts are choosing to sell the energy on.

Farmers may increase output of less energy intensive crops such as peppers.

Profiling new Defra minister

The latest Defra secretary has no direct experience of agriculture: https://www.fwi.co.uk/news/farm-policy/ranil-jayawardena-announced-as-new-defra-secretary

The Minister of State does have a farming background: https://www.farminguk.com/news/former-chief-whip-mark-spencer-appointed-defra-farming-minister_61090.html

Eustice hardly impressed despite the farming connections he often referred to, but will this be another case of up or out?