He said that a particular threat to farming came from the Agriculture Bill which plans to abandon the Single Farm Payment system as used under the CAP, with nothing to replace it. “There are no ifs and buts, the basic payments scheme will be phased out. Michael Gove’s idea was to replace it with extra environmental schemes but he clearly had not read WTO rules. It is very clear that under WTO rules environmental schemes need to compensate for direct costs only, they cannot provide any income.
“If we have no income support. which this draft bill says. while the Americans are getting it, the Europeans are getting it, pretty well all our competitors are getting it, there is absolutely no way we can make farming pay.
“Emergency funding is within WTO rules – but under the rules you can’t carry on giving emergency funding forever. The Americans are doing this at the moment. Our (Lib Dem) policy keeps a basic payment scheme whether we leave the EU or not. A basic payment scheme is one of the only ways of supporting farm incomes within WTO rules.”
“There is likely to be a lot of land abandonment. Most of the farmland round here, the field sizes are not suitable for agribusiness arable farming and unless the regulations on clearing hedges and cutting trees down are scrapped, I can’t see that changing.”
Former NFU chief economist Sean Rickards, also a panellist at the event, gave a bleak assessment of the effect of the post Brexit trading environment on UK farming: “The government has already made it clear that (after Brexit) they are going to let the rest of the world in without tariffs and large sections of British agriculture couldn’t compete. Beef and sheep sectors will shrink quite severely, horticulture will struggle with labour issues and therefore the only sectors that will continue will be arable farms on an increasing scale to compete.
“The character will change, the size will change and the structure will change. It will be a smaller industry operating on an industrial scale and the remoter parts of the country will see farming almost wiped out.”
The panellists predicted that No Deal due to happen on October 31st would lead to the collapse of the sheep and beef sectors in particular, with prairie style arable agribusiness likely to be the only sector to survive, providing fields were huge without hedgerows. Phil Bennion said: “We export nearly 40% of the lamb we produce, and up to 96% of that goes to the EU. The tariffs under no deal would render this trade non-viable.
“Our lamb, Welsh lamb and English lamb is a premium product eaten fresh over a season, so there has not been a need to cold store it. It is eaten not just here but in France and all over Europe. New Zealand lamb fills our close season. With our lambs coming to market in the autumn it is inevitable that prices will crash if the EU market is closed off. There is nowhere to cold store it to stop this from happening. I believe the trade will collapse, yes, to a fraction of its current size. There will be a lot of mutton around and domestic prices will slump. Farmers won’t be able to get rid of enough of it to stop a price crash.”
After the meeting Phil said it was important to debunk the claims made by the Brexit Party and many Tory MPs that under GATT Article 24 we could just carry on trading with the EU as before.
“This myth keeps being repeated without being challenged. The fact is that the EU cannot choose under WTO rules whether or not to impose tariffs on our exports to ‘punish’ the UK, it has to impose them. It would also be illegal under WTO rules for the UK government to pay the tariffs to bail the farmers out.
“It is a disaster. If Boris does what he is threatening and refuses to go if he loses a vote of no confidence then I think we should walk into Parliament and tell him to go.”
A streamed recording of the whole meeting can be found (temporarily 90 degrees on its side!) here: https://www.facebook.com/stratford4europe/videos/1054525424743135?s=644926487&v=e&sfns=xmo
Gideon Rachman in the Financial Times writes: “Although the delegates at Davos this week, fuelled by champagne and canapés, will do their utmost to pretend that it is business as usual, the fact is that the world view epitomised by the WEF is under attack as never before”.
He adds that Davos epitomises the “globalism” that the incoming US president and his political advisers are pledged to destroy.
A few days later, Martin Wolf, also in the Financial Times, opens with a reference to Davos Man – a term invented for a class of people he despised.by Samuel Huntington, the late political scientist, who attended the annual meetings of the World Economic Forum in Davos. He argued that they “have little need for national loyalty, view national boundaries as obstacles that thankfully are vanishing and see national governments as residues from the past whose only useful function is to facilitate the elite’s global operations”.
Wolof continues, “Core beliefs of the Davos creed have been global co-operation and economic globalisation. But faith in the latter was shaken after the global financial crisis of 2007-09. The ratio of trade to global economic output has stagnated since then, after doubling between the early 1970s and 2007 . . . it reflects shifts in policy: the post-crisis re-regulation of finance has had a pronounced home bias, with reduced support for cross-border activities. Trade liberalisation has stalled, while some studies already show a rise in protectionist measures . . .
The enthusiasm with which many of the elite seized opportunities to avoid paying taxes was disgraceful
“As has happened so often before, hubris led to over-reach. Davos people underplayed the role of legitimate and potent states in underpinning the global system. They forgot the need for the successful to recognise their responsibilities to the societies that had made their success possible. They ignored, above all, the obligation to share the gains of globalisation with its losers. The enthusiasm with which many of them seized opportunities to avoid paying taxes was disgraceful . . .”
Wolf warns: “Make no mistake: Mr Trump could bring down the temple of world trade. If he were to impose punitive (and unjustifiable) tariffs on Chinese imports, the EU is likely to follow suit in order to protect its producers from a surge of Chinese imports. China would then feel obliged to retaliate. The system of trade rules could collapse. So, too, could the very idea of a co-operative global system”.
He concludes: “Yes, policymakers should have paid more attention to what was happening to ordinary citizens, but the simple-minded populism now on the rise will soon prove far worse than the hubris of the Davos elite”.