Adam Henson’s farm talk: British farmers and the EU

As economic crises grip Europe, just how much do Britain’s farmers rely on the EU?

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Every January, the big names in farming gather in Oxford to discuss and deliberate the state of the industry and set the agenda for the year ahead. It’s a tradition that goes back to the 1940s and, while the delegates are more likely to be seen wearing pinstripes than pullovers, it remains an important event. This year’s Oxford Farming Conference debate couldn’t be more timely.
To the backdrop of the eurozone crisis and the recent Commons rebellion by Tory MPs over a European Union referendum, the good and the great are considering whether British agriculture could thrive outside the EU. It sounds deliberately provocative, but of course that’s the point.

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Despite what some newspapers would have you believe, most British farmers aren’t obsessed by Europe or demanding instant withdrawal from the EU. In my experience, the goings-on in Brussels and Strasbourg rarely crop up in conversation at the farm gate or in the village pub. Farmers are far too busy getting on with the day-to-day responsibilities of running a business, caring for livestock and being an employer.

But it is true that decisions made in the European Parliament, the strength of the euro and the financial situation in other member states directly affects us and our bank balances. Anyone involved in the lamb export business or the international grain trade knows this only too well. When the Greek economy began to make the headlines, the price of wheat suddenly dropped and it caused serious concern.

An eye on the exchange rate
Of course, for most people the euro is still a novelty that you only come across when exchanging holiday money. However, it’s much closer to home for farmers because our subsidies are paid to us in euros and only converted to pounds once the cheque enters our accounts. How much we get depends on the exchange rate and the fortunes of the European Central Bank in Frankfurt. So you can imagine how popular the financial pages become at payment time.
Some banks allow farmers to hedge their Single Farm Payment (SFP), locking the price they’re paid at an agreed exchange rate in advance. It’s a bit of a gamble and you have to wait until the end of September every year for the final rate announcement to see if your wager has paid off. For 2011, farmers received just over 86p for every euro, slightly better than the year before. Great news if you fixed your exchange at 87p per euro, but no cigar for the farmer who opted for 85p.
Any conversation about Europe is sure to turn to the topic of bureaucracy. Critics say that many EU regulations are intrusive, expensive and unnecessary red tape. But how much of this controversial form filling and paper chasing is actually required by Brussels and how much is down to civil servants in Whitehall? This is the so-called gold-plating of EU directives.

Government inspectors
Well, like farmers all over the country who claim SFP, I’m used to Government inspectors checking that what we’ve said in writing is true. Officials will come to measure every field, checking our crops are growing in the right places and inspecting the management of our hedgerows. That’s followed by a thorough examination of our paperwork, from the fertilisers we use to the way we look after our livestock and scores of other things besides. Call them what you like, but those inspectors are nothing if not conscientious. In fact, they’re so meticulous that they’ll be on our farm for a whole week. I don’t want to start a row, but I’m not entirely sure that happens in Italy.

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So what’s the likely outcome of the big EU debate at the Oxford Farming Conference? Well I’m no good at crystal-ball gazing, but within the industry the majority view seems to be that unless shoppers are prepared to pay substantially more for their food to support UK farmers, we need to continue to be subsidised. At the same time, the payment system helps enhance British wildlife and landscapes through environmental stewardship schemes. It’s also a good way of policing what farmers are doing on their land to encourage the right plants, birds, mammals and insects.
Most agricultural commentators agree that those things can only be achieved through support systems such as subsidies, and for the foreseeable future that can only be done through the EU.