Survey
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
Shaping a new and dynamic future for Agriculture and Horticulture Over the last year… TRADE LABOUR DOMESTIC AGRICULTURAL POLICY ENVIRONMENT COMPETITIVENESS REGULATION Key NFU areas of consultation • International trade • Access to labour • Domestic Agricultural Policy International trade United Kingdom - value of trade with the European Union (2015) primary agricultural and horticultural products Sugar £k IMPORTS FROM THE EU EXPORTS TO THE EU Poultry £k Sheepmeat £k Beef £k Barley £m Wheat £m Butter £m Milk and milk products £m Eggs £m Cheese £k Pork £m Vegetables and fruit £m £7,000 £6,000 Source: HMRC £5,000 £4,000 £3,000 £2,000 Value (£m) £1,000 £0 £1,000 £2,000 United Kingdom - value of trade with the Non EU countries (2015) primary agricultural and horticultural products Sugar £k EXPORTS TO NON EU COUNTRIES Poultry £k IMPORTS FROM NON EU COUNTRIES Sheepmeat £k Beef £k Barley £m Wheat £m Butter £m Milk and milk products £m Eggs £m Cheese £k Pork £m Vegetables and fruit £m £4,000 £3,500 Source: HMRC £3,000 £2,500 £2,000 £1,500 Value (£m) £1,000 £500 £0 £500 Trade with Europe • The European Economic Area (Norway model) • European Free Trade Area (Swiss model) • Customs Union (Turkish model) • WTO Default position WTO Default ADVANTAGES Not bound by single market rules DISADVANTAGES High tariffs for UK exporters No financial contribution required No free movement of labour Domestic food prices would possibly rise Risk of Gov to unilaterally cut tariffs Trade with the rest of the world • The multilateral dimension (WTO) – UK to update the terms of membership – Agreement with the other 163 countries • The bilateral dimension – What happens to agreed FTAs? – Start of negotiations might be delayed Import access How can we limit our exposure to imports produced to lower standards? – WTO rules prevent restrictions on “Production or Processing Methods” – Protect sensitive products through tariffs and Tarriff Rate Quota – Promote the values of domestic production to consumers Labour availability • Official sources of labour underestimation: – 30,428 non UK born workers – Doesn’t cover seasonal / communal housing • Any restrictions would impact sector Access to labour • Working visa entry • Points based system • Seasonal agricultural workers scheme • Other schemes: – Commonwealth workers – Student agricultural workers scheme Working visa entry ADVANTAGES Control over migration flow DISADVANTAGES Additional admin costs + lead time Traceable workers Risk to oversee some agricultural labour shortages No certainty about future supply of labour Points based system ADVANTAGES To employ skilled agricultural workers DISADVANTAGES Usually penalises lower skilled applicants Could be tailored to address shortages in lower skilled labour No guarantee that an exemption for unskilled labour would be granted Temporary working visa to allow access to temporary labour Extensive consultation with Gov required to get the system right Seasonal agricultural workers scheme ADVANTAGES Traceable, temporary work force Possible exemptions for Employer National Insurance and pension auto-enrollment Highly productive labour profile DISADVANTAGES UK might be seen as an undesirable destination following the EU Referendum result Admin costs unknown at present Domestic Agricultural Policy What other countries do Share of annual CAP spending in England 20% Agrienvironment schemes 3% Productivity 76% Direct payments Domestic Agricultural Policy 1. Income support/insurance-based systems 2. Agri-environment 3. Competitiveness No support ADVANTAGES DISADVANTAGES Opportunities to more No equal treatment with rest of entrepreneurial operators and new Europe entrants Short-term adjustments would Sector forced to become more harm NFU members productive and competitive Land prices might reduce, hitting Assuming budget is preserved, those whose debt relies on that more resource available for other collateral purposes (e.g. competitiveness) Not necessarily more resilient to volatility and price shocks Decoupled direct payments ADVANTAGES System known and considerable investment in the infrastructure DISADVANTAGES Contributed to higher land prices and rents WTO green box, not subject to international discipline Difficult to ensure that support goes to active farmers Allow farmers to switch production Removing greening would simplify according to market demands, or the system but money could be reduce or stop moved to environmental programmes Coupled direct payments ADVANTAGES DISADVANTAGES Support might go to active farmers WTO blue box, therefore production is limited Ensure that a certain level of production is encouraged Admin complexity (e.g. inspections) Redistribution of support between sectors if there is agreement on Other operators in the chain might how this should be done extract the value of those payments Production structure more rigid Deficiency payments ADVANTAGES Provided that target price is fair, it gives strong protection against price (not volume) volatility DISADVANTAGES WTO amber box, subject to international discipline Not popular with treasury because annual cost is unpredictable and potentially large Bond payments ADVANTAGES DISADVANTAGES The bond would give the farmer To give enough liquidity to the certainty of payment for as long as it market, there could be no was valid, allowing long-term restrictions on who holds the bonds. planning A lot of farm support to go out of the sector. As the value would be highest in the early years, there would be an incentive for farmers planning to retire, or with large debts, to cash in early. This would encourage more rapid structural adjustment No cross-compliance. Unless support payments are reduced or ended at the same rhythm in the rest of the EU, the bond system would not guarantee It does not increase the gov’s equality of treatment with our financial commitment, while farmers competitors. can capitalise their asset through the private bond market. Insurance type systems ADVANTAGES DISADVANTAGES Purpose is clear and justifiable US and Canadian schemes are complex and require heavy administration and availability of data. Provides assistance only when required Can be a safeguard against price volatility and weather related volume fluctuations Can be regarded as non-trade distorting (although WTO rules limit the compensation to 70% of the income loss) No viable instruments have yet been devised for the livestock sector Lengthy lags between the income loss and compensation Other elements of agricultural support Agri-environment ADVANTAGES Popular with Gov and NGOs Environmental enhancement measures improve image of farming and can help avoid overprescriptive regulation DISADVANTAGES WTO rules limit payments to costs incurred or income foregone NGOs will insist on ambitious outcomes Could restrict production and Could be designed to allow parallel threaten food chain investment best use of productive land • Can create permanent • Can be regarded as non-trade distorting dependency on payments Competitiveness measures ADVANTAGES DISADVANTAGES More relevant if we are entering a Can involve picking winners- which more liberal trading environment can be bureaucratic and arbitrary Benefit all sectors Can benefit agents and middlemen Most measures are not trade May benefit those best at applications, not the most distorting- eg contributions to R&D deserving Encouragement of investment can also be linked to environmental gains (eg more energy efficient buildings) • Would be welcomed by wider food chain • Improved competitiveness may not be sufficient to combat price volatility Next steps • To consolidate results of consultation • NFU Extraordinary Policy Board 29/09/2016 • NFU Council 10/10/2016 - Framework for policy • More work on policy details will be required as negotiations and policy developments start to unveil