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Fertile Ground


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Tax and Fiscal Policy

Opportunities and challenges for UK agriculture

https://iea.org.uk/wp-content/uploads/2019/06/Fertile_Ground.pdf
This paper examines the current state of UK agriculture and makes recommendations as to what the long term goals of a UK agricultural policy could be, after the UK leaves the EU, in a way that maximises the potential benefits of a genuinely independent agricultural policy, while minimising the disruptions caused by leaving the EU.

We argue that the goals of an Independent UK Agricultural Policy could be as follows:

  • To provide good quality, affordable food for consumers.

  • To support British farmers such that they can be competitive in domestic
    and global markets.

  • To protect our environment and preserve the UK’s agricultural traditions.


In order to achieve these goals while leaving the EU, the paper recommends:

  • Making the most of leaving the EU’s Common Agricultural Policy (CAP), by moving away from the Common External Tariff (CET), and amber box production subsidies (recognising that the UK’s amber box subsidies are already low).

  • A more positive approach to new technologies, allowing farmers to innovate and move away from environmentally degrading old technologies.

  • Pursuit of agricultural liberalisation as part of an independent trade and  regulatory policy, while maintaining defensive measures where appropriate to protect producers from distortions.


The paper further discusses ways in which transition to a new UK agricultural policy can be made in a manner that is least disruptive for existing producers, including through the use of transitional grants and a gradual phasing out of certain subsidies.

The paper recommends that the UK exit with a deal that includes a transition/implementation period so as to allow continued support while new policies are put in place. However, in the event of a ‘no deal’ exit, certain necessary steps that the UK could take to protect consumers are discussed. These include the removal of all tariff and quota restrictions on a number of foodstuffs which the UK does not produce, as well as opening tariff rate quotas up erga omnes to allow competition from efficient global producers, especially for the beef and dairy sectors.

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Shanker is an IEA Trade Fellow, having previously been the Director of the International Trade and Competition Unit (ITCU) of the Institute of Economic Affairs. As one of the world’s leading trade and competition lawyers, he has worked on the privatisation of the UK electricity market, the transition of the Soviet, Central and Eastern European economies and the apertura in Latin America. He has worked on the accession of Poland and Hungary to the EU, the WTO accessions of a number of countries, including China and Russia. Shanker was educated at St. Paul’s School, London and has an M.A in Chemistry from Balliol College, Oxford University and postgraduate legal degrees in both the UK and US.



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