Policy Exchange's new report, Farming Tomorrow, has many excellent suggestions for the reform of the UK's agricultural sector. The report, written by Warwick Lightfoot, has a plethora of sensible policies, including:
- Unilaterally phasing out tariffs
- A phasing out of production subsidies and income support
- New powers for the Food Safety Agency to collate, commission, and review scientific evidence on food safety and animal welfare.
State intervention, stemming from the Common Agricultural Policy of the European Union in the agricultural sector has resulted in taxpayers having to pay huge sums of money to prop up and support an inefficient and unproductive agricultural sector. This burden has been exacerbated as people find a squeeze on their living standards as a result of high food prices.
Furthermore, the CAP places restrictive tariffs on food from outside of the EU which again translates into higher food prices for consumers. Brexit gives the UK an unprecedented opportunity to examine its agricultural and trade policies and adopt a more liberal approach which will ultimately result in a more productive agricultural sector and lower food prices for consumers.
Below are three steps which post-Brexit Britain should take to reform its agricultural sector and ease the cost of living for consumers.
First, subsidies for farmers should be phased out. Not only are the subsidies a burden on the taxpayer, but they also result in higher food prices by propping up an ineffectual and fruitless agricultural sector. Under the current system, the agricultural sector is shielded from the true impact of the market. This has allowed the sector to become ineffective and sluggish which has led to higher food prices for consumers. For example, the EU charges a tariff of 30 per cent for processed cocoa products like chocolate bars or cocoa powder, and 60 per cent for some other refined products containing cocoa. Similar tariffs are in place on coffee – what domestic UK coffee market are these tariffs protecting?
Phasing out subsidies will expose the sector to market forces and so cause the agricultural sector to become more competitive. This happened in New Zealand, an example which demonstrates how government subsidies damage productivity and how their removal leads to higher productivity and lower food prices for consumers.
The second step which the government should take is to embrace the use of GM crops. GM crops have agronomic traits such as insect resistance and herbicides which will allow farmers to achieve higher yields. Embracing the use of GM crops and promoting research into new developments in this area will help farmers to farm in a more efficient way. As with the phasing out of subsidies, this will also result in lower food prices for consumers.
For this to happen, the UK should ease restrictions and take a rational and scientific approach to food safety, rather than being driven by pseudo-scientific scare stories and misinformation peddled by the media. The UK should adopt a position of open minded enquiry when determining whether or not to accept the produce of other countries which have different food safety regulations from our own.
The recent debate about chlorine washed chicken serves as a useful illustration of this point. The media managed to whip up mass hysteria that a free trade deal between the UK and the US would result in supermarket refrigerators being stocked with harmful and dangerous chickens. Thankfully, a report from the Adam Smith Institute demonstrated that eating chlorine washed chicken is about as dangerous as drinking a glass of water. The UK needs to adopt a more liberal, scientific approach to food safety standards. This will result in more food on supermarket shelves, greater choice, and lower prices for consumers.
Finally, the UK should adopt a more liberal approach to trade. The UK should remove tariffs on imports from developing countries as this will encourage producers in those countries to export more of their products to the UK. This will result in cheaper food for consumers. People will, therefore, have more money to save and to spend on other products. As a result, businesses will achieve higher profits which will, in turn, lead to greater investment, higher wages, and more jobs. Moreover, the UK should also aim to forge free trade deals with the rest of the world. The UK should arrive at deals with its trading partners where tariffs on food are as low as possible.
Brexit gives Britain a great opportunity to reform its agricultural sectors and to adopt and promote free trade. Such an approach will result in lower food prices for consumers.