EU Referendum Agricultural Community FAQ’s

Posted 08/06/2016

All information herewith has been provided by the CLA.

If we “leave”, would we not still have the supermarkets, bakers etc asking our farmers to still comply with the same EU rules, as it is unlikely that farmers’ customers will have 2 sets of purchasing standards/ audits/ regulations?

The CLA has undertaken an audit of EU regulations which are relevant to the rural economy, which suggests initially at least the vast majority would remain in place. This is because a number of regulations, in particular environmental laws, are based on global agreements that would still apply to the UK and any trade agreement the UK strikes with the EU would require compliance with EU standards in many areas.

The most likely outcome of a vote to leave the EU would be the transposition of most EU regulations into UK law and any change would be incremental and over the long term.

Am I right, in saying that under WTO we can have our own domestic support policy, but it would have to be dressed up each year as a discretionary bill in Parliament, like the US Farms Bills, as indirect support, rather than the current direct support of the CAP? And, if so, is that because there is an exemption from WTO rules for CAP?

The Common Agricultural Policy is subject to the WTO Agreement on Agriculture from 1994 and it is impossible to say what sort of relationship a UK Agricultural Policy (UKAP) would have with organisations like the WTO until further details are know. However, there is no reason why the UK Government could not in the event of Brexit choose to introduce a UKAP and they must do so.

What is also vital is that in the event of Brexit the UK Government commits in the days after the referendum to underwriting CAP payments through to the end of 2020 if the UK leaves the EU before the end of the current CAP round. Any changes in these payments, which farmers have budgeted for, before the end of the current CAP period would have significant negative consequences for agriculture in the UK.

Do you know how the banks would view our farming clients if their revenues go up and down: are farmers going to be facing more costly annual overdrafts/more difficulty in running cash flows, and uncertainty, rather than the current stability? Or do we no longer have support on grain, and therefore in reality there is no stability any longer due to enlargement?

The impact of Brexit on the economy has been a significant point of debate throughout the campaign with the Remain campaign seeking to highlight what they believe are the economic risks of leaving the EU including the higher cost of borrowing. The Leave campaign have accused the Remain side of exaggerating the impact an EU exit would have on the economy in the short term, while not dismissing it entirely, and have focussed their message on the economic opportunities that would be available for businesses, including farmers, outside of the EU through new trade agreements.

For additional information, link here to the CLA’s Leave or Remain document https://www.cla.org.uk/sites/default/files/CLA%20Leave%20or%20Remain%20Report%20%28A4%20print%29.pdf