New plans for UK farm subsidies must not push nations to “try to outdo each other”, the Ulster Farmers’ Union (UFU) has warned, highlighting limits in place on farm support in Northern Ireland as a result of the Northern Ireland Protocol.

The comments were made in response to the government’s consultation on how future farm support schemes across the UK will be controlled.

The process will set the principles underpinning the UK’s new farm support regime, as well as any subsidies which should be excluded from the commitments to these principles. The consultation will also consider how to best manage the most distortive kinds of subsidies, in addition to opinions on the role and powers of the independent body that will oversee the regime.

The UK government has said it aims to deliver a regime that:

  • Facilitates strategic interventions to support government priorities, including supporting the economy’s recovery from Covid-19;
  • Takes account of the economic needs of the UK’s individual nations and strengthens the economic bonds of the union;
  • Protects the UK’s competitive and dynamic market economy;
  • Ensures that subsidies in the UK are given in line with the UK’s international commitments, including those in the UK-EU Trade and Cooperation Agreement (TCA).

UFU president Victor Chestnutt said: “Subsidies are of fundamental importance to the agri-food industry and the UFU have responded to the UK government’s consultation on a new approach to subsidy control, to help shape a much-needed system.

“We recognise that the UK government wants a subsidy control system that strikes the right balance between allowing the benefits that can be obtained from subsidies, while limiting the most harmful impacts.

“The UFU supports the objectives for the future subsidy control regime – facilitating interventions to deliver on the UK’s strategic interests, maintaining a competitive and dynamic market economy, protecting the UK internal market and acting as a responsible trade partner.

“Agricultural support has, over decades, delivered an array of public goods and other benefits in the public’s interest. NI and UK agriculture face unique challenges compared to other sectors, such as volatile weather and natural constraints that directly impact farming families’ productivity and profitability.

“However, unlike other sectors within the UK economy, with long production cycles it’s often very difficult to mitigate against such variables in ways available to businesses in other sectors through investment in infrastructure, capital and alternative technology or input substitution,” said Chestnutt.

Limits on farm support in Northern Ireland

The union said it hoped agricultural support payments could continue at current levels.

This would guarantee that UK nations have maximum flexibility to develop a future support policy tailored to their own specific circumstances and that distortions to the UK internal market are minimised.

Chestnutt added: “It’s in no one’s interest to create a situation whereby each administration tries to outdo the other as to who would provide the most support, or the most trade-distorting support.

“It’s important that the contents of the NI Protocol are taken into account, particularly Article 10(2), which places limits on the amount and type of agricultural support in NI to minimise distortions to the UK internal market.

“Northern Ireland must remain in charge of their own spending decisions. The UK government must create a subsidy control regime with the devolved administrations which works for the whole of the UK,” said the UFU president.

What happens next?

Now the consultation has closed, the government will bring forward primary legislation to establish in domestic law a subsidy control system that works for the entirety of the UK.

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