Though the Common Agricultural Policy post-2020 will not apply in the UK, the work begun in Brussels to plan changes to the present policy should help to inform the debate about the way forward for the UK, or perhaps the ways forward for England and the devolved administrations as they may, and in the case of Scotland certainly do, wish to go their own way.
The EU Agriculture Commission has produced a report `Climate Change and Resource Availability Challenges for EU Agriculture' which will be considered at its Agricultural Outlook Conference in December. Following the conference, there will be consultations with the member states, and towards the end of 2017 a formal Communication setting out policy for the period 2020-2026 will be issued.
The Commission's Report anticipates that, for cereals, the predominance of the main commodity crops, wheat, maize and barley, will continue to grow at the expense of other cereals, and prices will remain lower than their recent peaks. It predicts that the shift from oilseeds to soybeans will continue `as feed use will become the predominant driver, given the stagnation in biofuel demand due to policy uncertainty'. It assumes that the EU's `new energy efficient legislation' will lead to a strong reduction in overall petrol and diesel use. That certainly seems so for diesel in the UK, given the plans to charge for the use of diesel powered vehicles in city centres and Government's encouragement for the production of electric ones. Despite that, it expects demand for biofuel to increase towards 2020 thanks to the target of 6.5% in total transport energy set by the Renewable Energy Directive, with the demand being met largely from non-agricultural feedstock.
As to milk and dairy products, the Report notes that `world dairy markets have been in turmoil during the past two years, as the introduction of the Russian import ban and the sharp decrease in Chinese purchases coincided with unprecedented increases in world production'. It warns that `further short term disequilibria' between global supply and demand cannot be discounted and says that an adjustment is required from farmers and other market operators. It notes that, after the end `of more than 30 years in a production quota environment', market fundamentals will be the main drivers of development in EU supply. In other words the going is expected to remain tough for dairy farmers and there is not a lot the EU can do to help them.
Demand for fruit and vegetables, especially apples and tomatoes, is expected to remain stagnant or fall. The Report says that trade within and from the EU will be crucial and notes that `the EU often has an offensive position in trade negotiations' for these crops a message there for the UK's Brexit negotiators.
Perhaps the crunch comment is that `total agricultural income is expected to decline considerably in real terms over the outlook period (-14%) mainly due to fairly low agricultural prices and increasing costs.' A sombre thought.