British farmers benefit from EU subsidies, preferential trade deals and access to cheap seasonal labour, but they fear they will be losers on all three fronts in a post-Brexit world. Photo: Reuters
London - Britain may radically overhaul agricultural policy after it leaves the European Union and the bloc may have to make changes too when it loses Britain’s net contributions to the region's farming budget.

For the first time in decades, farmers in Britain will have to fight for a slice of government funds with departments such as health and education once Brussels hands over the purse strings for farming budgets to London.

Britain’s exit also spells trouble for EU farmers as the country puts more into the bloc’s Common Agricultural Policy (CAP) than it takes out, meaning subsides for farmers on the continent could also fall unless the funding gap is plugged.

British farmers have been shielded by a powerful farming lobby within Europe and benefit from EU subsidies, preferential trade deals and access to cheap seasonal labour, but they fear they will be losers on all three fronts in a post-Brexit world.

“The bloody-mindedness of the French or the Irish in standing up for agriculture was not just standing up for their farmers but actually brought a good deal for us as well. Without them we are more vulnerable,” said Nigel Miller, who has a sheep and cattle farm near Galashiels in Scotland’s Borders region.

“I don't see the UK government expending a lot of negotiating capital to protect agriculture. Their main issue when they look for trade deals will be financial services, banking, etc,” Miller said.

Britain voted to leave the 28-nation EU in a referendum in June last year. It has two years to sort out the terms of the divorce before it comes into effect in March 2019.

In 2015, British farmers received 3.25 billion euros ($3.5 billion) from the EU’s agriculture fund in direct payments based chiefly on the amount of land they farm and not on individual needs.

The government has guaranteed payments will be maintained until 2020 but farming and environment minister Andrea Leadsom has warned there will be a major policy overhaul when the EU subsidies stop.

On average, British farmers get about $18 700 (R260 000) a year from direct payments and an EU rural development fund. For some, direct payments account for 70 percent of their income.

Payments to rich

However, a significant chunk goes to wealthy individuals who are large landowners. A Greenpeace investigation showed that in 2015 the top 100 recipients of EU direct payments in Britain received more in total than the bottom 55119 recipients combined.

Berkeley Hill, professor of policy analysis at Imperial College London, said any overhaul should ensure funds go to farmers making decisions that benefit the environment, or help them cope with disasters such as flooding or foot-and-mouth disease.

Read also: #Brexit likely to affect SA firms

Britain has about 18.4 million hectares of agricultural land of which more than half is classified as permanent grassland, according to government data for 2015. Wheat is the leading arable crop with 1.8 million hectares while others include barley, rapeseed, oats, rye, sugar beet and potatoes.

The farm lobby has been a powerful force in Brussels but has less influence in Britain where, according to European Commission data for 2014, agriculture accounts for 1.2 percent of employment, compared with an EU average of 4.7 percent.

In budget terms, Britain will benefit from leaving the EU as it puts more into the bloc’s CAP than it gets out. But that does not necessarily mean farmers will be the ones to benefit.

The EU is Britain's most important trading partner for most agricultural sectors. In 2015-16, for example, about 80 percent of UK wheat exports went to the EU.