Rural Law

There is no doubt, that whether landed estate or farm, the rural sector has benefited hugely from farm support under the EU common agricultural policy and freedom of movement of goods. There may be argument as to whether the money was well targeted or whether other export opportunities were lost. But, significant sums of public money have underpinned the rural sector.

So with the release of the draft UK EU withdrawal agreement, while the politicians debate the bigger picture, I can’t help reach for my key board, punch in CTRL + F “agriculture” to see what it means for the rural sector.

In the press this morning, the 21 month transition period is well rehearsed, and the potential backstop of a UK wide customs union with special treatment for Northern Ireland. But what does it say about agriculture? What does it say about the promises of leaving the common agriculture policy and about freedom for the UK to do its own trade deals?

Not surprisingly given that agricultural and rural support is the largest part of the EU budget, it gets special mention. What is says is that in the transitional phase and any backstop to follow, the UK is released from the confines of the common agricultural policy. But not without limits. Its freedom is sandwiched between the level of common agricultural policy support in 2019 and WTO constraints. This does at least seem to reflect the framework proposed by Defra that the UK will continue to support agriculture to the same level until 2022.

In terms of trade the transition period does allow the UK to reach agreements with third countries, in other words other states or blocks. However, such agreements cannot come into effect until at least the end of the transition period. There are also constraints designed to prevent the UK from negotiating in a prejudicial way to the EU during that time. So for those looking for a bright new dawn of free trade opening up with a new agricultural support system from March 2019, or indeed the end of a transition period, that seems highly unlikely.

Although the UK wide backstop is designed to avoid a special arrangement for Northern Ireland, there are inevitably special provisions applying to Northern Ireland. In particular on food, the EU regulations require to be met. That calls into doubt the ability for UK agriculture, as a whole, to carve out its only policy on livestock, agrichemicals, and food hygiene and phytosanitary matters – although in practical terms it is not clear that the UK would in any event wish to diverge from EU standards. For Scottish producers trading with Northern Ireland, it remains unclear what if any distorting effect on the market might result.

At the time of writing this is all, of course, highly provisional. The text is a draft and it remains to be seen if it will survive reaching the UK Parliament for a vote, and whether it will pass; and that is before we factor in the voices from the 27 other member states. What it does start to do however, is crystallise issues, and encourage us to think more specifically about what might it really look like on the ground, on the farms and estates of rural Scotland, and for the food and drink sector reliant upon it.

Clive Phillips

Clive Phillips

Partner at Brodies LLP
Clive, Head of the Land & Rural Business team, has an in depth knowledge of the rural sector as a specialist in agricultural law and also having a family farm business as a landowner and tenant himself. He has particular experience with wind farm options, leases and joint venture arrangements.
Clive Phillips