Following a visit to Acorn Organic Dairy Farm, Phil Wilson MP speaks to owner and director Gordon Tweddle about the implications of Brexit to local dairy farming in the region.
Gordon shares his thoughts here
"Dairy farmers in County Durham are looking to the future with some trepidation. Although ex-farm milk prices are already largely set by international commodity movements they will now lose the protection of the EU central agricultural policy (CAP). The CAP not only controls import/export into the EU but also provides a cash subsidy to farmers often seen as a buffer against large swings in commodity prices. Unfortunately this is now providing the bulk of the profit or minimising the losses on many farms.
If the UK is going to follow a hard- nosed free trade policy, competing in the world market, logic dictates there will be no room for subsidies to a small section of the UK economy, ie Agriculture.
Source of labour is currently a major issue. Eastern European labour has a significant presence on UK farms. They are prepared to do the jobs Brits no longer want to do, get up early, milk cows/pick fruit and vegetables.
In the short term the fall in the sterling exchange rate has firmed the ex-farm price for cereals and the equivalent for some dairy products. Though, if Brexit is to be successful, which it needs to be, then sterling will regain its strength, removing that short term benefit.
The consumer/general public may like to see cheaper food on the supermarket shelves courtesy of world trade. Is this a re-run of the C19 Corn Laws?
It will be up to the British farmer to make his pitch to the consumer emphasising quality, local, environment and hopefully jobs, to justify paying a premium for our produce. In short the farmer will probably have to get much closer to the consumer than they have done in the recent past.
The alternative would be commodity farming on a larger scale than is currently the case, with the demise of many smaller “ family” farms.
New Zealand went through a period of painful agricultural readjustment following the removal of farming subsidies, but is now seen as a thriving, efficient agricultural sector. This may or may not be our fate, though the consumer is on our doorstep.
The major policy decisions regarding Brexit, trade (from aircraft to cheese), the movement of labour and where compromises are negotiated have yet to be made. Then there is the crucial detail surrounding those decisions.
We are about to find out how much of that £350m per week (saving) on the side of the Brexit bus exists in post Brexit UK and how much of that finds its way into agriculture and what proportion ends up on dairy farms.
The Chinese have a saying for this…..”may you live in interesting times…….!”