Brexit - Our Food is Expensive Benefits Who?

Owen Paterson, formerly Secretary of State for Environment, Food and Rural Affairs, has estimated that when the UK withdraws from the CAP, the price of food to UK consumers will drop by about 7%, thereby adding to their real incomes.

The UK has been and will continue to be a net loser under the rules of CAP, ‘Common Agricultural Policy’. The European Union applies tariffs to imported food and subsidizes farmers such that price in the shops are artificially high.  Some tariffs on Dairy products are as high as 50%, the average sits at 35%. Other tariffs, sugar as an example there is a 25% tariff, cereals 15%. This is a burden on our weekly shopping bill, hence, why Owen Patterson claimed our weekly shopping bill will reduce by 7%.

However, by leaving the EU, opening the door to imports we will impact our home farmers.  Some level of debate will be needed to assist farmers to expand new ways of land use, perhaps environmental and tourism, this would require some form of public subsidy in the short term.  Regardless, support will be needed much as there was support prior to our entry to the Common Market back in 1973.

It's important to bear in mind two points 1. Farming in the UK generates only 1% of our GDP, manufacturing provides for 10%.  2. If you look to the other countries for examples then you quickly see that New Zealand were faced with a similar dilemma in 1985, tariffs were removed brining competition to an already desperate wine industry. Prior to 1985 New Zealand had a wine industry that only had an internal market.  The reason for this can be explained by a quote from Sir Lockwood Smith, former NZ High Commissioner to the UK, he referred to their wine industry, he likened it to drinking battery acid.  Today 30 years after the abolition of the tariff New Zealand has a vast international market and is respected for producing excellent wines.

When we are able to free ourselves from excessive EU regulations particularly around concerns for health, safety and environment, all of which do little for any of those three points they only add to the protectionist nature of the EU.

Since 1992, the EU has approved 2404 experimental GM field trials for research. In comparison, over the same time there have been 18,381 GM trials for research in the USA. In crops for commercial use, there is only one GM crop, an insect resistant maize variety, that is grown commercially in the EU and no GM crops have yet been approved for human consumption as fresh fruit or vegetable. In comparison, there have been 117 commercial releases in the USA since 1992 and in other countries outside Europe.

Source: Royal Society

GM is a controversial subject, many will see the EU as standing up for values but there are many studies that show the risks as limited. To not embrace GM in some regulated fashion severely handicaps the EU, particularly as global population increase. Currently the status quo protects a few interested parties, producer's at the expense of the consumer. We must open our minds and remove the shackles if for no other reason the family budgets are stretched way beyond the point where life is enjoyable.

There will be considerable adjustment required within the farming community, some may find it painful. But in the medium to long term they too will benefit should they make the adjustment alongside government policies. Just as the New Zealand wine producers did.