How long will £2.2bn landowner subsidy last in post-Brexit UK?
The threat to millions of pounds in annual farmland payments from the EU makes Brexit a bitter pill for some of the richest people in the UK.
Exiting the EU will leave them at the mercy of the British taxpayer, who is unlikely to stand for huge annual farm subsidies to the country’s wealthiest families.
The UK’s top recent beneficiaries include Lord Iveagh (£915,709.97 per year), who lives on the 22,486-acre Elveden Estate in Suffolk.
Sandringham Farms, the estate owned by Queen Elizabeth, has received more than half a million pounds per year (£557,706.52).
Other big earners from the EU’s rural development, direct aids and market schemes include the Duke of Northumberland (£475,030.70); and the Duke of Westminster (£427,433.96).
Conservation organisations also stand to lose millions.
The National Trust (£2,666,880.26); the Royal Society for the Protection of Birds (£2,002,859.51); and Natural England (£970,580.50), are among the top recent annual British recipients of EU farm subsidies.
CAP direct payments in the UK on 2015 totalled £2.8 billion, of which (£2.2 bn) was the Basic Payment (BPS) to landowners (known as the Single Payment, or SFP, from 2005 to 2015).
Other payments largely comprise agri-environment support, such as protection of wildlife habitat, and special payments for farming in disadvantaged (hill) areas of Scotland and Northern Ireland.
On average, 50-60% of UK farm income comes in the form of EU subsidies, paid to 86,000 farmers. These subsidies make up more than half the total public spend on UK agriculture.
Taxpayers might be happy to continue annual payments to the “average” farm, but will probably baulk at payments like the more than £400,000 a year going to the Newmarket, Suffolk farm of Khalid Abdullah al Saud (owner of the legendary racehorse, Frankel, said to be worth over £100m for breeding).
The Saudi Prince is among the top 100 recipients of EU farm grants in the UK.
So far, no-one in the UK government has said farm subsidies will be taken away; in fact, Prime Minister Theresa May has promised to match them up until at least 2020, following the expected 2019 Brexit.
Other Brexit supporters who are now in top positions in the Government said during the Brexit campaign that farmers’ subsidies would be protected after Brexit.
However, the TaxPayers’ Alliance campaigning group says taxpayers shouldn’t be handing out land subsidies, often to extremely wealthy individuals.
And there are many Brexiteers who want redirection of the UK’s multi-billion pound annual SFP/BPS subsidies, more towards protecting the environment, for example.
The loss of these payments would trigger significant consolidation at farm level, as many farms become unviable and unsustainable.
The more efficient farmers are likely to welcome this opportunity to expand, when more land becomes available, if BPS payments are cut or axed.
As income support for which there is no public benefit in return, SFP/BPS subsidies may not be a priority for the UK government after Brexit.
Most of these subsidies go to farmers in England (£1.4bn), with £190m in Wales, £348m in Scotland, and £238m in Northern Ireland.
They represent 8.2% of all money accruing to the UK agricultural industry, other than non-farm income, investment earnings, and pensions.
No welfare case can be made for these payments, in a country where farm households are an exceptionally relatively wealthy group (and low-income farmers could be catered for instead by the national social welfare policy, not by agricultural policy).
The case for payments related to farm area can only be made for parts of the country facing environmental or social problems (such as remote hill areas).
That’s why Brexit is likely to hit the pockets of landowners as diverse as Conservative MP Richard Drax, or The Church of Jesus Christ of Latter-Day Saints, better known as the Mormons.
Mr Drax is one of the UK’s top 100 EU farm subsidy beneficiaries, with his jointly-owned farm having qualified for up to £351,752.29 per year.
He is not the only well-known politician to benefit from the EU’s Common Agricultural Policy.
Lord Gardiner of Kimble, Parliamentary Under Secretary of State for Rural Affairs and Biosecurity declares an interest as a partner in CM Robarts & Son, which nets £45,479.19 in farm payments.
And another minister in the government’s environment department, Minister of State for Agriculture, Fisheries and Food George Eustice, is a director of a Cornish farm receiving £2,313.
As for the Mormons, they have become one of the biggest foreign landowners in Britain, thus qualifying for annual payments from the EU of up to £785,058.94.
The top 100 beneficiaries are estimated to have pocketed payments from the EU in 2015 totalling £87,927,951.
This included £61,194,962 given in the single payment scheme, from which the top 100 recipients were paid more than the bottom 55,000 combined.
About 80% of the payments go to around a quarter of landowners, those with the biggest land holdings.
Millions of pounds per year are at stake for them, unless environment secretary Andrea Leadsom will go beyond her promise to match the payments up until at least 2020, by leaving them in place on a more permanent basis.
In the campaign for Brexit, which she supported, she appeared to guarantee the single farm payment would continue at current levels, if she were elected leader, when she addressed the Countryside Alliance last summer.
However, she was subsequently defeated by Theresa May in the Conservative leadership race.
Leading Brexit supporter Boris Johnson told a Treasury select committee that “all farmers will continue to receive the current levels of subsidy, and Farmers for Britain, led by George Eustice, said that the subsidy would be maintained or even increased after Brexit.
Their promises at the time were interpreted as an attempt to boost Brexit support in rural areas, and would have been welcomed by supporters and donors of Vote Leave, such as the JCB machinery company owner, Lord Bamford, one of a group of prominent Brexit campaigners estimated to have received over £4m in total in EU farm subsidies in 2015.
