EU membership: Good or bad for Scotland and Wales?

• Scotland
• Wales
• Further answers needed

Allan Bowie – NFU Scotland president

© Paul Watt Photography

A referendum on EU membership before the end of 2017 will be the fifth time in as many years that Scottish voters have gone to the ballot box.

At this time we know what membership of the EU entails, but we don’t know what would be the impact of being outside of the EU since we do not know the relationship the UK would have, nor the conditions under which our farmers would be expected to operate if we choose to leave the EU.

Before the vote we are looking for a clear business case to be presented that will clarify the headline issues for Scottish farmers.

In the case of a British exit from the EU (Brexit), how would the food production support system we have in the form of the CAP be replicated?

Would it be possible to maintain the access to markets that we enjoy via the EU single market?

What will be the impact on Scotland’s food and drink exports, which were worth £5.1bn in 2014, and the subsequent consequences for Scotland’s farming and crofting businesses?

Farmers would prefer to farm without the financial support they receive from the EU but the reality is that most farms don’t make enough from the market for this to be possible.

See also: Farmers go head to head on EU in-out vote

The CAP helps to address the failure of the market to provide a fair reward for what farmers produce. Guarantees on what would replace EU financial support will be critical in determining a “yes” or “no” stance.

Many NFU Scotland members would argue that even if we do remain “in”, Scotland’s position within the EU is not fit for purpose. 

An effective CAP should deliver stability for primary producers, allowing them to invest for the future when global prices are good, and providing insulation when prices take a sustained downturn.

However, the CAP we have now is technocratic, driving support away from the areas that need it most in Scotland and burdening farmers with regulation.

The outcome of the government renegotiations will be critical for some on whether they see the brighter future as being part of the EU.

While all sides are setting out their stalls, and information on the government’s renegotiation agenda remains scant, the challenge for NFU Scotland will be to weigh up the emerging arguments and to listen to our membership about the issues that are most important to them in this debate.

NFU Scotland members are politically active and more than 1,600 members attended our roadshow of independence debates in the lead-up to last year’s referendum. We anticipate the engagement in this debate will be equally robust.

During this sustained period of low market returns and volatility, it is fair to say that Scottish farmers want to see political energy focused on implementing the measures that will secure a sustainable future for food production rather than political point-scoring over a “yes” or “no” stance.  

Whatever happens, politicians must recognise the considerable interests and concerns of farming within this debate, and focus on securing the best future for agriculture.

Stephen James – NFU Cymru president

Wales’ location in the western periphery of Europe means that Brussels, the European institutions and indeed our export markets can sometimes seem distant and far removed.

Despite this, at some stage during the course of the next two years we will be asked to make an all-important decision on whether our future belongs within the EU or elsewhere.

As part of the UK, Wales enjoys tariff-free access for our exports to the rest of the EU. Our red meat exports are worth about £190m/year, with the majority destined for the EU market, with countries such as the Netherlands, Ireland, France, Italy and Germany among the key purchasers of what Welsh farmers produce.

Of course, that doesn’t mean that we might not be able to negotiate free-trade agreements with the rest of the EU if we were to leave, in the same way that some other non-EU countries have managed to do.

We can be rightly proud of the protected geographical indication (PGI) status awarded to our Welsh lamb and beef by the European Commission (EC). This recognises the origin and unique qualities of our product and helps protect the integrity of our brands.

This EU recognition has helped develop and grow the Welsh red meat brands. Last year Hybu Cig Cymru (Meat Promotion Wales) successfully applied to the EC for £3.2m of funding for a three-year programme for the promotion of Welsh lamb and beef in our key European markets.

The funding that rural Wales receives from Brussels is significant, and during the period 2007-13, Wales received €3bn (£2.2bn) from the EU’s CAP.

The slump in prices across the key agricultural sectors in Wales, means that direct payments (£240m/year), remain as important as they have ever been in helping to compensate farmers for market failure, to help manage price volatility and to reward high standards of farming.

This support has been crucial in protecting the viability of traditional family farms in Wales and thus providing the raw material for the £6bn Welsh food and drink industry.

What we do not know at this stage is what, if any, level of support might be on offer to farmers in Wales if we were outside the EU.

The burden of regulation flowing from the EU is of course significant. A much-longed-for reduction in red tape is often cited as one reason why it may be in the interests of Welsh agriculture to withdraw from the EU.

Rules surrounding issues such as the burial ban for fallen stock and sheep EID have been deeply unpopular, and have hit Wales disproportionately hard.

They are examples of the bureaucracy stemming from Brussels that many believe we would no longer have to contend with if we were to withdraw. The question we need to ask ourselves though is whether a Wales outside the EU we would really be able to move away from these regulations if we want to continue exporting our produce in to Europe?

NFU Cymru has not taken an “in” or “out” stance at this early stage, with renegotiation yet to run its course. When a clearer picture emerges of what any renegotiated terms of our EU membership might look like, then this could change.

There are many important questions that we simply don’t know the answer to, including crucially the nature of our relationship with the EU if we were to withdraw and what level of support might be available to Wales’ farmers.

Northern Ireland

The Ulster Farmers’ Union was invited to contribute to this article but chose not to take part.

The NFU is pushing  to open up the debate on Britain’s future role in the EU ahead of a government-led referendum.

The vote could take place as early as next spring and the union has set out a list of key facts and questions affecting both sides in a report.

EU referendum: UK farming’s relationship with the EU is available as a PDF on the NFU website. 

IN
Questions facing farming if the UK voted yes:

1. What will Westminster do to ensure the EU Commission has a strategy to make farming more productive and globally competitive?

2. How would it ensure the CAP remains a common policy and that UK farmers have a level playing field to compete on?

3. How is the UK going to achieve better regulation?

4. How is the UK going to ensure all decisions are based on science?

OUT

Questions facing farming if the UK voted no:

1. Would the UK have access to the European market, and under what conditions?

2. What would a future British agricultural policy look like, particularly for direct support?

3. If the UK continues to have access to the EU’s single market, but takes a different approach towards support for farmers, how will fair competition be ensured?

4. Would Britain be more or less open to imports?

5. What immigration policy would the government pursue and how would it affect the UK’s access to labour?