POST-BREXIT DELUSIONS ABOUT DEREGULATION

A part of the sales pitch made to British farmers pre-Referendum was that Brexit would mean a much lighter regulatory control of the farming industry; thus, the industry would emerge from Brexit as a globally-competitive, farming Utopia. We live in an age of ‘free-from’ food and the UK farming sector is to become free from Brussels red-tape. Consequently, unfettered it would be able to ‘grow more, sell more and export more’ to a new Golden Age of prosperity.

At least one well known economist believes that the ‘precautionary principle’ deployed by Brussels towards regulation is costing the British farmer and food consumer a fortune as it is holding back cost-reducing and yield-enhancing technologies from use. In contrast, I for one am quite happy that precaution is the right approach; it is after all why Germany, post the Japanese nuclear accident, chose to go nuclear power free. Is it any different with food; should we not be cautious about what we put in our mouths every day of our lives? And should we not be as equally cautious about how we produce that food?

The GMO-issue is a well-known one and some EU countries are wary of allowing their use. The pro-lobby cites the actions of the anti-GM lobby groups for such an attitude. But is it the anti-lobby or consumers who are driving that choice? I wonder what our society’s leaders eat? Are they disproportionately buyers of, say, organic foods? Is it why Waitrose, a supplier of food to the wealthy in the UK, is going GMO-free? Hence, is this a consumer segment that is heavily influenced by the anti-lobby exploiting social media or not?

British supermarkets have for years had to show due-diligence when sourcing their food supplies; the UK’s 1990 Food Safety Act embedded it. It was an Act passed by the UK Parliament, not legislation imposed by Brussels. One can only wonder at how many quality assurance schemes that it has spawned, Bord Bia’s and the Red Tractor scheme included. If it is not precautionary, it certainly encourages a significant degree of caution into the food system.

Note: [from the food.gov.uk website] “Due diligence’ is a defence which is designed to balance the protection of the consumer against defective food with the right of traders not to be convicted of an offence they have taken all reasonable care to avoid committing.  The result should be to encourage all concerned to take proper responsibility for their products…  This defence is available where the person charged proves that they „took all reasonable precautions and exercised all due diligence to avoid the commission of the offence by himself or by a person under his control… the burden of proof lies with the person or company accused, they need not establish their case beyond all reasonable doubt.  They need only persuade the court that they exercised ‘due diligence”.

We have nut-free labels; but those are about a clear health risk to a few. We have gluten-free as a few are gluten intolerant; but many more believe that they are. Although the latter may not have a medically-proven case, they believe they have an issue with gluten and that is what counts when it comes to providing them with food. And the food supply-chain has reacted to the consumers’ demand. One suspects that many are taking a precautionary approach; that by eating gluten-free they may avoid developing a greater problem.

In an information-filled, social-media-using world we should expect more, not less, consumer awareness of issues. Gluten is just one of many. It is an environment where access to information is vast and consequently it is increasingly difficult to get the ‘trust in the science’ message across [just whose science do you trust]. And, looking at what is presently happening in the general nutrition world and the, most probably, related explosions in obesity and Type 2 diabetes, ‘trust in the science’ is going to become a harder, not easier, sell to an aware public.

I recently read a statement on a presentational slide that said that nobody has died from eating for from GMOs. I am not going to argue against such, there has probably not been a proven case. One can say the same for the use of glyphosate, the use of which has exploded due to the advent of glyphosate-resistant soya and maize. There are now concerns [for some] that the vast tonnages of glyphosate used are impacting upon human health. As with much of the gluten issue, is it social-media driven awareness of the possibilities or is it a failure of the consumer to ‘trust in the science’? Either way, what is the position of the food retailer who is required by law to show ‘due diligence’ within their own food supply chains.

To go further and as a small, aside, just what are the implications going to be for our food supply systems from less access to glyphosate. It has become a key ingredient in minimum tillage farming and that is a way to reduce GHG emissions from crop growing. Some farmers are clearly saying that the loss of glyphosate will inhibit their ability to deal with climate-change-requiring emission reductions. I suspect that caution over glyphosate will, at least, mean that it will not be available for pre-harvest use. Will a post-Brexit UK go a different route to the EU on this one? Will it risk its food exports to the rest of the EU by allowing such glyphosate use?

Further, one is aware of concerns in Argentina that soybean monocultures [they occupy near 60% of the countries cropland] are leading to soil degradation and, thus a threat to our long-term food security. It is all GM soybean. Would that expansion have occurred without the availability of GM soya varieties? Would the Argentinian farmers be able to maintain such levels of planting if they had to operate broader rotations to facilitate weed control? Would the Argentinians have ploughed so much of the Pampas to grow soybean [thus releasing carbon into the atmosphere from a notable carbon sink] without GM soya? It is not that GM technology is wrong per se, it is just that there can be unforeseen consequences and ones that the scientists and those approving the use of a technology may not be testing for, or even thought about. Science by its ceteris paribus nature can often mean it is wise not to trust in the science, and caution or precaution may be the wisest approach, due-diligence driven or otherwise.

So, will a post-Brexit allow the cultivation of GM crops? It is probably as difficult to predict as the Referendum itself. Many will argue that GM is already so well embedded within the animal feed supply chain that it does not matter. It will also be so within the soya-product-using, food-processing industry’s supply chains. That said, it is clearly an issue that some supermarkets are taking seriously enough to want to establish GM-free supply chains. Are they following due-diligence and taking precautionary measures or are they acting upon consumer demand? If it is the latter, is the demand driven by consumer-awareness enhanced by social media?

GMOs are just a part of a much broader issue. It includes the use of growth hormones in beef farming. Growth hormones are a major trade issue between the USA and Europe. It always appears to swiftly rise to the surface when any trade deal is discussed. It will certainly do so when it comes to UK-USA trade discussions. It may, however, now be less of an issue when it comes to EU-USA trade given the alacrity with which the new US President is stalling trade negotiations in his belief that the USA should stop exporting jobs on the back of free-trade. Will he accept an EU argument that the EU has the right to protect EU cattle-farming jobs on the same principle?

It is very difficult to say how far post-Brexit UK will go with free-trade in food. Just what will the Government’s position be when it comes to farming and food policy? Will it result in food retailers and processors sourcing from the cheapest suppliers around the World? After all, one can hear the argument that it will mean cheaper food for the UK’s massed urban consumers. One suspects that it is the way that the pro-Brexiteers would like to see it go. It should, in theory, be a double win for the UK consumer / taxpayer if the country accepts sourcing more food from overseas whilst simultaneously reducing direct farm support. They could also, tacitly, say that this is what pro-Brexit voting farmers voted for. And were they not in the majority?

Hence, if I was a British farmer, I would be planning for the worst; lower support payments and more exposure to global free-markets and its low-cost suppliers; be they from South and North America, Australasia and, eventually, eastern Europe. Life is going to get tough. The question is what to do about it and how best to react to a chill wind that blows in from all quarters?

The first, obvious, complaint that will come from the UK farming community will be about the equivalence of production standards. Is it really fair-trade if imports come from farms that operate lower production standards, be they, say, environmental or animal-welfare related. When it comes to free-trade, has that stopped the importation of products from countries like China or Bangladesh which, allegedly, operate lower standards than would be demanded of UK producers? For UK farmers, it will be a difficult point to argue; especially as one can expect UK retailers and food processors to establish farm/quality assurance schemes elsewhere in the World to ensure that their due diligence remains complete.

I have read about how great will be the cost savings from deregulation in the UK. I have also read that there will be greater freedom to adopt yield enhancing technologies. Together both could improve the farmers profit. Will they? After 50 years on the technology treadmill is today’s farmer better off than one farming back in 1967? Many folks seem to make money out of the sale of farming and food-producing technology and the production of more, but does the farmer? And then there is the question of whether higher yields and lower costs will enable UK farmers, still small in global-exporting-nation terms, to compete with potential overseas suppliers to the UK market? That they can is probably a pipe dream.

So how will UK farmers compete in a free-trading, less-government-regulated, new world? They will compete by creating product differentiation and highlighting the unique selling points of their product. To the fore will be ‘British’, that it is locally produced and with all that consumers associate with ‘local’. The USPs will be fewer food miles, more traceable and trustworthy and it helps rural communities. Other potential USP’s will relate to enhanced animal welfare, lower carbon emissions and better carbon sequestration. Hormone-free and GM-free will quickly find their way onto the USP list. USPs will also be about enhancing the biodiversity to be found on and under British farmland and they will be about the management of traditional British landscapes. It will be surprising how many USP’s British farmers will find when the pressure is on.

And with all these product USPs will come the need to prove their provenance and to implement robust auditing of the USP claims. It will require designated-origin systems and ones that go above and beyond the farm assurance schemes that we have seen to date.  As with the likes of Red Tractor, they will be voluntary [after all in a free-trading world the government cannot get involved and impose]. It is, however, worth asking when voluntary become obligatory?

Most Irish beef farmers will tell you that the Irish quality [farm] assurance scheme is voluntary. But try to sell a non-quality assured animal. If one reads the small print on the UK websites of Asda, Sainsbury, Tesco, McDonalds… you will probably find phrases words like ‘all our beef comes from farm-assured farms in the UK or the Republic of Ireland’ [Aldi and Lidl with have one or the other depending on location]. To ensure that they can meet these requirements, the processors require their cattle to be sourced from quality-assured farms [apparently regardless of the actual final market destination]. Hence a scheme that started off as voluntary has become a necessity, irrespective of whether involvement generates a premium price for the farmer. One can see a ‘baseline’ farm-assurance scheme becoming a similar necessity in the UK post-Brexit.

The UK farmer will realize soon enough that protecting their home market will be about creating products that differentiate British produce from the competition. Oddly enough, this solution will also help UK farmers to export premium products. It will not be about ‘grow more, sell more, export more’, it will be about growing more, selling more and exporting more produce of known and provable quality and with British origins. It will not be about more per se. It is a significantly different approach and one that UK farmers will embrace out of necessity.

Hence, one can expect Brexit to bring about attempts to deregulate the British farming industry. One cannot, however, see a diminution of due diligence requirements coming about; after all they are rooted in British not EU law. So, do not expect any reduction to occur with the bureaucracy associated with the farm assurance required by the food retailer and food processors. It will just not happen. They may well also demand the equivalent from their new overseas suppliers; thus, diminishing the value of those schemes value when it comes to protecting the trading position of the UK farmer. In all probability, the QA baseline will rise elsewhere.

Far from seeing less regulation, Brexit may bring in for the British farmer an era of greater self-imposed regulation. It may even mean a greater rather than lesser total regulatory burden! And it may mean excluding some of the technologies that some believe will be freely available post-Brexit. It will be about producing what the consumer wants; even if consumer demand is driven to a degree by a population that is made ‘issues-aware’ by social media. It will take very much more that repeating the phrase, ‘you should trust in the science and accept what we say’.

A salutary point to make is that the UK farming community is not going to get Twitter or Facebook back in the box from whence they sprung. They drive ‘issues awareness’ so learn to live with it. And one should add that farm profitability is not likely to get far up the social-media agenda anytime soon; it will come well below what Kim Kardashian had for breakfast.

So, will it be one of those quirks of history that British farmers will indeed download some of the Brussels-emanating regulatory framework only to replace it with, not a UK-government created regulatory framework, but one of their own making? It will be as extraordinary as it is probable. Self-imposed regulation will follow deregulation in a way that will be unofficial and, thus, acceptable within free-trade agreements. And it will be farmers, once they realize that it is the only way that they can protect their own market position within a free-trading, post-Brexit world, that will be the driving force behind the creation of this new regulatory environment. How strange.

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