14/01/2018
Booker is
back today, writing about the origins of the CAP. This is something we set out in
The Great Deception, a tale that helps explain the real reason why Charles de Gaulle twice vetoed British entry to the EEC in the Sixties to why Margaret Thatcher had to battle for our budget rebate in the Eighties.
The official, entirely bogus version has it that the CAP was devised by a benevolent Brussels to guarantee Europe's "food security" and to save its farmers from the kind of depression they had suffered in the Thirties.
The truth is that, immediately after the war, all Western European countries, including Britain, introduced their own farm subsidies. But by the early Sixties this was leading in France to disaster, building up unsaleable food surpluses at such an unaffordable cost that a drastic solution had to be found.
The clever French noted that the Treaty of Rome promised a Common Agricultural Policy but without giving any details. So their answer was to devise a CAP so absurdly loaded in France's favour that two other countries would not only provide a market for its surpluses but pay for subsidising them into the bargain.
One of those countries was Germany, still atoning for its role in the Second World War, and Britain, which by then had announced its intention to join the Common Market.
Clearly, the UK had to be excluded from the Community until all these arcane financial arrangements had been agreed. Otherwise, it might well have blocked such a one-sided deal.
And that was the real reason for de Gaulle's two vetoes in 1963 and 1967. Only in 1969, at a summit in The Hague, did the French finally get the agreement they wanted, at which point the UK was needed to help pay the bills. Unsurprisingly, the very next item on the agenda was to reconsider Britain's application to join.
The following year, Edward Heath was so keen to get us into "Europe" that he accepted the CAP without demur. In 1973, the year we went in, British farm incomes were higher in real terms than ever before or since.
But so loaded against us were the financial arrangements for the CAP that, by 1979, it was clear that within six years the UK would be the largest single net contributor to the Brussels budget, of which the CAP was then taking 90 percent: hence Mrs Thatcher's five-year battle to win her rebate.
Since then, much of British agriculture has been in decline. We now import 30 percent of our food from the EU. Much of it comes from France, which continues to be the largest beneficiary of the CAP.
It may seem odd that this strange story is not better known. But the British have never really understood the bizarre form of government we have lived under for 44 years. And this, says Booker, is why we are now making such a horrifying mess of our efforts to leave it.
As much to the point, this provides another important reminder of why we need to leave the EU and why the majority of us voted to leave. Over term, the depredations of the CAP have been an important factor in turning public sentiment against the EU.
Currently Mr Gove is telling farmers that direct payments will be retained until 2024, after which the support would be replaced with a system of "public money for public goods".
That, in itself is no bad thing. We suggest as much in
Flexcit on the basis that the scenery created by farmers as a by-product of their activities is of benefit to the nation yet there is no market mechanism for rewarding those who deliver the greatest value.
However, former Northern Foods Chairman Chris Haskins
is not convinced that farmers are on to a good thing.
Cynics, he observes, might say that the farmers' positive response to Gove's initiative was simply one of relief. The Environment Secretary seemingly wants to put off the evil day of change for several years, giving the agricultural community more time to prepare.
There are, however, some good things in Gove's proposals. Most people would agree with the suggestion these larger farmers should not receive the full benefits of the subsidies. But, nevertheless, elimination of the existing Single Farm Payment would immediately put the vast majority of farmers into trading losses.
Environmentalist support payments are intended to bridge the gap but those cropping marginal land, which can only produce modest yields, would probably be making a loss under the new scheme. They might convert to livestock but, on marginal land, that is not a lucrative business.
Farming slightly more productive land, but with a small acreage, would result in unacceptable losses. Without the single farm payment, it would take a sizeable arable farm, with productive soil, to deliver even a small profit.
Nevertheless, Gove has not supplied an overwhelming amount of detail on his "ambitious radical programme for a sustainable agricultural environment". What farmers don't know, therefore, is how the new payment scheme, which will require time and effort from the farmer, can compensate for the loss of the single farm payment.
Furthermore, since the UK is less than 70 percent self-sufficient in food, trade deals will be necessary to ensure that food imports are maintained. But that means any new agricultural support programmes will have to be compatible with existing and new trade deals.
Such deals will also be needed to ensure that British farmers are not disadvantaged by imports but Gove will also have to ensure that UK policies do not distort competition of conflict with EU standards. And if the UK supports genetically modified foods, as Mr Gove appears to do â while the EU maintains its ban â this could become an obstacle to a trade deal.
To add to complications, a US trade deal would probably require the UK to lower its environmental standards on US imports. Yet if Mr Gove's proposals require UK farmers to comply with higher environmental standards, that could seriously disadvantage the domestic industry.
All of this is to come, presenting farmers and policy-makers with a new set of challenges that are all part of the Brexit process. Before the CAP came into force, the UK had developed a sophisticated capability. For the decades since, we have had the EU and its predecessor organisations make our policy for us â at huge cost. And now, we have to learn the lessons all over again.
And that is the lesson of Brexit. What we left we should never have joined but, since we did, we now have a mess to clean up and new systems to create. This marks down Brexit not as the end but as the start of a long process.
But there is another lesson which farming policy in particular is going to teach us. Whether we benefit from Brexit is not going to be evident just by going through the process of withdrawal. We will make gains only if we are able to formulate and implement policies which are better than those they replace.
But with no expertise and little transparency to the process (so far), all we have to rely upon at the moment is a series of vague proposals from the untested Mr Gove â a man who most surely will not be in office by the time the new policy is implemented.
Any defects in that policy will add to the already huge costs that the CAP brought us. Thus, with Brexit a chapter may be over â but damage wrought may continue for some time to come.
