Brexit and Agriculture in Scotland

Published date01 January 2018
Date01 January 2018

The European Union (“EU”) agricultural regime is widely perceived within the agricultural sector as complex, onerous and punitive.1 The anecdotal evidence suggests that cutting “red tape” was the reason for some farmers voting “Leave” in the 2016 EU referendum. Famers are said to have voted in this way on the basis of verbal assurances by the then Minister for Environment, Food and Rural Affairs that, in the event of the UK leaving the EU, funding for farming would continue at the same level and “spirit crushing” regulation abolished.2 At the same time, assurances were also made that leaving the EU would result in ever more powers being returned under the devolution settlements. These assurances have since been reversed; for the foreseeable future, the source, form and substance of agricultural regulation remain radically uncertain.

Since accession to the European Economic Community in 1973, virtually all agricultural regulation in Scotland has derived from Europe. As EU policy has evolved, the goal of the Common Agricultural Policy (“CAP”) of maximising food production – complete with butter mountains, milk lakes, set aside – has ceased to be its primary driver; over time, it has moved towards a “carrot and stick” regulatory system that incentivises compliance with, and contributes to, the costs of a range of standards. It also aims to mitigate the effects on production of weather and price fluctuations. It still, however, includes a historic basis of entitlement for payments to landholders who may not actively farm – the so-called “slipper farmers”.

The CAP agreement concluded in 2016 (“CAP Agreement 2016”) thus embeds, within its financial support regime, a range of public and private goods inherent in agriculture, including animal health and welfare, food safety, environment and climate change measures, sustainable land use and support for vulnerable rural communities.3 This shift towards the decoupling of financial support from production has been necessary for a number of reasons, not least of which is compliance with agreements between the EU and the World Trade Organisation (“WTO”) which limit the ability of member states to provide direct financial support to producers.4 Under these agreements, certain exemptions apply in order to provide continuity of production.5 These exemptions are unlikely to apply if the UK loses its share of tariff allocations under the current EU/WTO agreements and must negotiate them afresh.6

Whether agricultural policy in Scotland post-Brexit will include financial support or involve the deregulation of standards is, at present, unknown. Longer term, it will depend on the outcome of negotiations with the EU, third countries, and possibly, the WTO. More immediately, much will depend on the outcome of negotiations between the devolved...

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