Farmers have a right to know where the government’s priorities really lie

On what terms should the UK strike a trade deal with Australia, asks Hamish McRae

‘British farmers can cope with change but the present uncertainties have made life very difficult’ (AFP via Getty Images)

Does the UK need a trade deal with Australia? The answer is surely yes, but on what terms?

All trade talks raise emotions and this one is massively important for two reasons. It will set the framework for the general direction of British trade, away from Europe and towards the rest of the world. And it will show to what extent this government wants to push agricultural reforms and changes in land use – shaping what our countryside is likely to look like a generation hence.

Strip out the politics and start with a basic question: who matters more, consumers or producers? In any decent society, both do, and balancing the interests between them is a core role of government. But government also has to frame long-term strategic policies, and as my colleague Andrew Grice has argued, this is the first “real deal” since Brexit and it will be the model for the UK’s other agreements around the world, notably the big prize of the United States.

The problem with the consumer/producer argument is that the benefits of trade liberalisation to consumers are small individually and widely spread – slightly cheaper prices and a slightly wider choice in the supermarkets – whereas the costs can be large for some producers who find themselves competing with lower-cost suppliers from abroad.

Paradoxically, one of the main arguments in 1975 against joining what became the European Union, was that import of cheap food from Australia and New Zealand would be shut out in favour of higher-priced imports from Europe. Tony Benn and colleagues famously warned that the price of butter would double if we joined Europe. Actually, it quadrupled, but I don’t think that was entirely the fault of the common agricultural policy.

All those arguments about how best to protect UK agriculture are now being rehashed, but with two new twists to the debate.

The first concerns animal welfare. We now have the freedom to set our own ethical and environmental standards for farming and food supplies, so the question is how to use that freedom. In the case of Australia, there has been pushback from UK beef producers, who fear a surge in imports. There have been concerns about “hormone-fed cattle” and Australian animal welfare more generally.

But under EU rules, we were unable to do anything about European welfare standards. Now we can choose to stop imports. For example, there is a proposal to ban the import of foie gras on the grounds that force-feeding geese to enlarge their livers is cruel, a plan much resisted by some posh restaurateurs.

Whether we use our new freedom wisely is a separate issue. But the very fact that we should be having a debate about how Australians farm their cattle is a measure of that freedom.

The second new element is the landscape. When the UK was part of the EU, European subsidies had a profound impact on the physical shape of the countryside. It was (and is) very profitable to run huge farms in East Anglia, for as the National Farmers Union points out, it is Britain’s breadbasket. The region is extremely successful and competitive in world terms. But hedges have come down, and the varied landscape of 50 years ago has become more monotonous.

Other elements of agriculture, notably hill farming, have been under increasing pressure just to keep going at all. Hill farmers are quite right to fear that trade deals will squeeze them further. It may make more sense in narrow economic terms to switch from raising sheep on marginal uplands to turning them over to forestry and wind farms, but there are big human costs to such a policy.

More generally, farmers have a right to know as soon as possible where government priorities really lie. They can cope with change but the present uncertainties have made life very difficult. The danger is that trade deals add to uncertainty, rather than clearing things up.

Step back a moment. UK trade will shift away from Europe anyway. Exports to the EU have been falling as a percentage of the total for about 15 years. They are still very important, but the rest of the world has been growing faster than Europe, and will continue to do so. We should not make a fetish about foreign trade deals, but if they can open up growth markets a little more swiftly, then they are surely welcome. And if the end result is us paying a little more for UK-produced food, then I suspect many of us would be happy to do so.