AT first glance I found Michael Gove’s ideas for the reform of agricultural policies attractive.
Though a Remainer in the EU referendum, I have always had my doubts about the Common Agricultural Policy.
Cynics might say that the farmers’ positive response was one of relief because Gove – still the Environment Secretary after this week’s Cabinet reshuffle – wants to put off the evil day of change for several years.
The environmentalists liked Gove’s warm noises but, as always, need to be reminded that aspirations do not amount to a deliverable policy.
Most people would agree with the suggestion these larger farmers should not receive the full benefits of the subsidies, but farmers are a wily group and will endeavour to get round the problem by remodelling their estates into smaller units.
The elimination of the existing Single Farm Payment would immediately put the vast majority of farmers into trading losses.
Presumably the introduction of environmentalist support payments is intended to bridge this gap.
But if I am farming marginal land, which can only produce modest yields, say one and a half tonnes per acre of wheat, my gross profit is probably negative, so in the new world I would stop growing crops altogether.
I could convert my farm to grass but growing livestock on marginal land is not a lucrative business.
Next if I have slightly more productive land but with a small acreage, my fixed costs will result in unacceptable losses. In that case I would either contract my land out to a larger, more effective neighbour, or stop growing crops or convert to livestock production or sell up.
If I am a sizeable arable family farmer, say 750-2,000 acres, and the soil is productive, I can probably make a small profit, without the Single Farm Payment and could persuade myself to take on more rented land (but for a modest charge) thereby spreading my costs. But this would be less attractive to very large farmers whose management cost structure is already too high.
Michael Gove has been understandably vague about the contents of an ambitious radical programme for a sustainable agricultural environment.
As a deregulating Brexiteer, he is scarely going to propose more regulation, but plans to pay farmers for carrying out environmental good works.
What does he have in mind? Planting trees like the proposed Northern Forest? Flood protection? More protection for organic farming? Less intensive livestock production? How would such payments, which require time and effort from the farmer, compensate for the loss of the Single Farm Payment?
We must assume that, because the UK is only 70 per cent self-sufficient in food, trade deals will be necessary to ensure the deficit is met from elsewhere.
New agricultural support programmes would therefore have to be compatible with existing and new trade deals so that, on the one hand, British farmers are not disadvantaged against imports from elsewhere and, on the other hand, the new policies are not used to protect farmers from foreign competition.
Mr Gove seems to support, as I do, genetically modified foods, but if the EU continues its ban on such substances, this would become an obstacle to a trade deal.
A US trade deal would probably require the UK to lower its environmental standards on US imports. Would Mr Gove be happy with this?
If Mr Gove’s proposals require UK farmers to comply with higher environmental standards, will not the domestic industry find itself at a serious international competitive disadvantage unless other countries follow suit?
Alternatively he could produce a protectionist all-organic UK farming policy topped up with tariffed imports. This might be nice for the farmers but would result in soaring food prices which might not go down well with the voters. And because organic farming is less intensive, domestic self sufficiency would drop significantly further increasing the food deficit.
Post Brexit, Britain will still want to enter trade deals with other regions.
If they are to be free trading arrangements, as is the existing situation with the EU, they must be fair to both sides and subject to some independent arbitary dispute resolution – which is the role of the European Court of Justice today.
Brexiteers argue that this process jeopardises national sovereignty.
But unless Mr Gove wants to pursue a fully protectionist agricultural policy, something equivalent to the ECJ will have to be put in place, to ensure the parties comply with the rules.
Agricultural policies are always complicated, contentious and liable to become a political football. Mr Gove’s good fortune is that he can peddle appealing aspirations, knowing full well that he will not be around to deliver them.
Chris Haskins is a peer, businessman, former rural tsar and chariman of the Humber LEP.