The upheaval which followed Brexit and increasingly extreme weather have given the farming sector a difficult few years. Detail on how Labour will go about addressing the multiple challenges was light when its manifesto was published last month. But how will it go about governing now that it is in power?
This article provides insight on Labour’s manifesto, highlighting the party’s key proposals that will affect the agriculture sector. We explore what isn’t featured in the proposals, including the risks and opportunities that these promises could bring.
Like much of its manifesto, the pledges surrounding agriculture were high level - comprised more of ambitions than policy detail.
The new government called food security a matter of national security and said that as a result it would ‘champion British farming whilst protecting the environment’. But we will have to wait for the detail of its strategy for doing this.
In policy terms, half of all food purchased across the public sector will either be ‘locally produced’ or ‘certified to higher environmental standards’, it said.
There was also a promise of a ‘land-use framework’ and making environment land management schemes ‘work for farmers and nature’. Its trade strategy promises to promote the highest standards in food production.
It also promised to eradicate Bovine TB in order to end the ‘ineffective’ badger cull.
The pledge did not make the manifesto, but Labour said in December that a ‘new deal’ for farmers would include a new veterinary agreement with the EU which would cut red tape for British farmers by getting rid of many checks on food and agricultural goods at ports.
The new government is also seeking to ban bee-killing pesticides and ensure the sector meets Environment Act targets.
With such limited detail, it is hard to make a judgement on deliverability. Food security is a major challenge facing the country, which will increase in the coming years with climate change, and will require strategic planning and long-term budgets to address. We do not yet know what the new government will offer in this regard.
Making farming more environmentally-friendly relies on a business environment where farmers thrive. As one farmer recently told Farmers’ Weekly ‘you can’t go green if you’re in the red’.
The new veterinary agreement with the EU would be welcome for farmers with produce to export, but it also entails an extremely complex and delicate negotiation with Europe. It’s the nature of such negotiations that you do not always get what you want.
Plans to ban bee-killing pesticides have been welcomed by environmental campaigners, but the new government must be mindful to the risk posed to sugar beet crops in particular if virus yellows start to thrive. Growers must have access to viable alternatives rather than simply be faced with losing crops.
The previous government’s roll out of environment land management has been criticised for being too complex and causing uncertainty among farmers.
Labour has previously committed to reviewing it to make it more simple, and properly measuring the outcomes, including with regard to the impact on food security. The new government must heed calls for a new strategy which considers food security alongside environmental objectives, rather than viewing the two as in competition with one another.
Land Use Strategy
We’re yet to see real clarity on the balance between food security and energy. How much land does the new government want to see used for energy generation, and what are the consequences for food production?
The new government’s central ambition to transform the country into a ‘renewable energy superpower’, and the inevitable roll-out of solar farms and onshore wind and perhaps the production of energy crops, is at odds with ambitions for food security.
Labour, along with the other major parties, was criticised by the National Farmers’ Union in the build up to the election for not setting a clear strategy on food security, which claimed that the 'lack of focus on food in the political narrative during the campaigns demonstrates a worrying blind spot for those that would govern us’.
Funding
While the Conservatives and the Liberal Democrats promised a £1bn increase to the farming budget to help address this challenge, Labour did not place a figure on its expenditure at all.
Those in the industry will know the current challenges. Extreme weather and rising production costs have limited yields, with historically unprecedented wet weather potentially leading to a fall of one fifth in key crops like wheat, barley and oats next year.
The majority of farmers have said they are likely to decrease production.
Tom Bradshaw, president of the NFU, said there were ‘gaping holes’ in Labour’s manifesto as a result, while other union leaders called the absence of a funding commitment a ‘major concern’.
In response to the criticism Labour said it would only know what it could allocate once it carried out its first spending review.
We should not underestimate the potential opportunity in public sector food supply. The UK public sector spends £2.4bn a year on food, which represents 5.5% of UK food service sector sales. Unsurprisingly, the largest share of this is purchased by schools, which is 29%.
A requirement to buy much more produce locally should be a boon to farmers who will find it easier to win these contracts, which will provide long-term, stable and secure income.
The conflict with food security notwithstanding, the growth of renewable energy could also provide a new income stream for farmers keen to turn some of their land over to energy generation and biomass production.
Should the new government succeed in its efforts to negotiate a new deal with the EU over veterinary standards, the ease of accessing EU markets will improve. This will remove what is currently a major headache for many exporters.
The pledge that public sector purchasing will be directed to those certified to higher environmental standards may prove burdensome for an industry that already has many environmental hoops it has to jump through. You would not want to see good farmers losing out on contracts just because they did not have the ‘right sticker’.
The remaining question mark over Labour’s budget also has many worried. Funds are tight and there is little headroom for Rachel Reeves and her team to manoeuvre.
While the party has not made specific funding commitments, beyond its renewable energy commitment of around £5bn a year, it has made promises in other areas such as health which will cost money. It is possible that the budget allocation for farming will get squeezed at a time when it most needs investment and certainty.
Promises to simplify environmental land management are welcome, but there is also a risk that the new government will push harder to achieve green goals, potentially at a cost to farmers who are struggling to keep their businesses afloat.
The election campaign also saw accusations from the Conservatives that Labour would seek to increase inheritance tax on farmers by scrapping existing relief.
Whilst the new government has specifically ruled out rises to VAT, income tax and national insurance, no such comfort has been offered in respect of inheritance taxes or reductions in reliefs.
For more information, please contact the food, drink and the rural economy team.
