From the BBC:
Environment Secretary Michael Gove has promised that the government will apply tariffs to food imports in the event of a no-deal Brexit, to provide "specific and robust protections" for farmers.
His remarks come as the government is poised to release details of tariffs (taxes on imports) that would apply to thousands of products coming in from around the world, if the UK leaves the EU without a deal.
Many supporters of Brexit argue that tariffs on food and other items should be scrapped in order to lower prices for consumers.
The logic is perverse:
But farmers fear that cheap imports and lower standards would destroy many parts of British agriculture.
"Your concerns have absolutely been heard," Mr Gove told a conference of the National Farmers' Union (NFU). "It will not be the case that we will have zero-rate tariffs on food products. There will be protections for sensitive sections of agriculture and food production." He added that an announcement on a no-deal tariff schedule "should be made later this week".
"If you obliterate the tariff wall… we would be massively undermined by food produced to standards that would be illegal to produce to in this country," NFU president Minette Batters told the BBC. "It would decimate British agriculture - it is quite honestly as simple as that."
Let's follow the logic as far as we can.
1. The UK has a fairly similar climate to other European countries and the same standards, so there is a level playing field [sic] for things like potatoes, wheat, beef, milk etc. So that's no argument for UK tariffs on food from other EU Member States, i.e. no change to current situation.
2. The UK does not have a similar climate to much warmer countries outside the EU, where you can grow bananas, olives, oranges. Quite possibly these countries have lower standards, but there aren't UK banana, olive or orange farmers to be protected, so there is no reason to "protect" them by imposing tariffs on bananas.
3. "But chlorinated chickens!!" shouts the crowd. That's a different topic, if these are proveably unhealthy, the UK government should just ban the import thereof.
Friday, 22 February 2019
No, Gove! Just no!
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14 comments:
Proving again (if it were needed) that Gove is not a genius and further PM material.
Who bears the cost of the import tariffs on food? We all do - if we want cheaper food why can't we have it? If we don't, we'll not buy it and the problem will solve itself.
M, you're applying proper logic. I was trying to follow NFU logic, but i got nowhere :-)
Obviously Gove has not been told about non-tariff barriers. If it is true that "we would be massively undermined by food produced to standards that would be illegal to produce to in this country", then all the government needs to do is insist that imported food meets the same standards as home-produced stuff and this will not be a problem.
What is being proposed is Corn Laws MKII.
B, that's one conclusion, but I sort of ruled that out.
The National FU is at it again. In reality it is the National Farmland Owners' Union, but National FU sums them up. There is a separate association for tenant farmers.
One of the benefits of Brexit is that the farm subsidies are no longer off-limits as a topic for public debate.
Factory farmed chicken needs to be chlorinated or it is liable to be contaminated with campylobacter.
" The UK has a fairly similar climate to other European countries and the same standards, so there is a level playing field [sic] for things like potatoes, wheat, beef, milk etc"
Thats not correct - the real competition for cereals (and other arable crops) would come from outside the EU, such as Australia, Canada and Russia/former Soviet countries, and for meat from places such as South America and the USA (for beef) and NZ (for lamb and dairy produce). All of whom would be lower cost producers than anywhere in the EU. Given you can't (under WTO rules) discriminate between countries, if foods such as wheat and beef were tariff free, the cheaper non-EU producers would be able to access the UK market as well as the EU ones.
I'm not arguing for tariffs, far from it, but there is a flaw in your argument there. Tariff free food from non-EU countries would have a big impact on UK farming, there would be a large % of UK farms go to the wall as a result, very few would be directly competitive on price with non-EU imports.
Farmers are used to both fluctuations in prices received and variations in crop yields. Agricultural rents reflect these uncertainties.
If imported food at lower cost becomes available, the effect is that marginal land falls out of agricultural use and might be abandoned (though, since nobody gives away land, it must be of some use to someone). Alternative uses of land which is marginal for farmland include forestry and recreation, both of which provide at least as many livelihoods as uplands sheep farming, which is the activity most threatened by cheap imports.
Rents on all other land fall to reflect the lower income from sales of crops. Faced with competition, some land will go over to other uses requiring lower inputs eg arable would go to mixed farming, with some woodlands/recreational land on parts that were difficult to work. Farmers would diversify so as to side-step the competition - specialist malting barley, for example, is always in demand. Other potential alternative uses include farming of freshwater fish and water fowl eg ducks and geese, horticultural crops, raising of shrubs and trees for nursery sale, currently a Dutch speciality; the scope is unlimited.
In some parts of the country, excessively intensive cultivation, encouraged by subsidies and tariffs, has been going on for decades. This has damaged the structure and fertility of the soil, which has been blown away, washed away or, literally, evaporated; parts of the Fens with peaty soils have lost three metres over the past century. For long-term food security, the land would benefit from a rest to allow it to recover from the hammering it has received.
Some farmers might 'go to the wall' but without a careful calculation based on Ricardian principles it is impossible to put a figure to it. As a generalisation, some farmland becomes sub-marginal and rents on all other farmland are reduced.
We need to remember that tariffs and subsidies impose their own costs on the economy. The higher prices for food impose wage pressure, are a cost to government since pensions and benefits are tied to RPI, and purchasing power is diverted from the remainder of the economy. Since less than 2% of employment is in agriculture, the damage caused by the dear food policy spreads far and wide. It is less noticed because it is diffused across the whole of the economy.
Tariffs and subsidies have distorted the rural economy by driving production in a way that gave farmers the most from the system. Phasing them out would rejuvenate the countryside by promoting diversity.
Phys, exactly and thanks. Polytunnels is the way forward, looks like crap but really efficient.
S, fair enough, but can you honestly say that "Australia, Canada, Russia/former Soviet countries, South America, USA and NZ" have lower standards?
US farmers get massive subsidies and tariff protection, but in fairness, they fed us through WW2.
NZ farmers get neither. Is the NZ climate really that much more favourable? Mehtinks not.
The favourite crop in fields by the railway between Worthing and Havant seems to be solar electricity. Fit and forget, and no need to employ seasonal labour to pick the fruit.
Wind generators are a nice little earner for uplands farms.
Phys, another tick from me, as long as it's not subsidised.
"Factory farmed chicken needs to be chlorinated or it is liable to be contaminated with campylobacter."
If you wash a chicken under the tap, you've just chlorinated it.
"Given you can't (under WTO rules) discriminate between countries, if foods such as wheat and beef were tariff free, the cheaper non-EU producers would be able to access the UK market as well as the EU ones."
Not if we insist that imported food is produced to the same standards as home-grown food.
B, exactly.
P, do they have sheep as well?
Gove is a Tory. The Tories, IMHO, have never got over the repeal of the Corn Laws. Gove is pandering to his farming constituency. I have heard him speak at a dinner at one of those - mine, I live amongst farmers - he did the same speech there too.
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