Supporting a rural economy transition

June 28, 2022

A few weeks ago saw the publication of a hard-hitting report, part-funded by the LEP, about the potential loss to the South West rural economy of £883m by 2027 due to changes in farm policy.

The move away from the EU’s Common Agricultural Policy (CAP) has been driven by Brexit, resulting in the biggest shake-up in farm subsidies for over 50 years.

Between 2021 and 2027, the Basic Payment Scheme, which makes up 85% of the former CAP support, is being phased out, reducing year by year.

In Cornwall and Isles of Scilly it has been worth around £51.7m a year. By 2027 that will have reduced to just £7.1m, which means an accumulative reduction of over £180m from Cornwall and Isles of Scilly’s rural economy.

At a time when all businesses are grappling with soaring input costs, we can ill afford such losses.

The Government is replacing CAP support with a series of environmental land management schemes that reward farmers for the provision of public goods. This might be reducing agricultural emissions, woodland creation or restoring rivers and lakes.

But the transition to these new schemes has had an uncertain start in the region, and the package of support is expected to be worth much less overall. There are fears that many of our farms, particularly some lowland beef and sheep farms, are particularly vulnerable to this loss of income.

And if they go, you lose custodians of the countryside and domestic food production capacity in one fell swoop. That’s a real worry. Brexit, and more recently the war in Ukraine, have highlighted how vulnerable some of our food supply chains are.

And the impact would be felt far beyond the farm gate. Our close-knit supply chains rely on each other to survive and thrive, from the village garage and veterinary practice, to the farm shop, local abattoir and other food processing businesses.

That’s why the LEP is backing calls to Government for a whole farm approach to holistic business advice to help farmers and land managers through this period of turbulent change and to safeguard the very fabric of rural life. This is best achieved by supporting farmers to take a long hard look at their whole farm business and develop a five to 10-year plan for the future.

We must help our farmers through the transition to net zero agriculture that delivers for nature and the environment whilst continuing in their food production role. With access to the right knowledge base and support we can have it all – environmental management and food production are not mutually exclusive, and it is time we recognised this and changed the narrative

We are starting to see some pilot projects make a real difference on the ground by helping businesses improve performance and take advantage of new opportunities.

Local business support services will be vital in guiding the sector through the changes. Advice will need to be focused and structured, and delivered by knowledgeable and trusted local advisers, and our Growth Hub could be a good way to signpost this.

Meanwhile local authorities across the region are currently putting together their investment plans on how to spend their allocation of the Government’s Shared Prosperity Fund. In Cornwall this is worth £132m over the next three years. It’s important the needs of the rural economy are fully incorporated those plans before they go live in October.

It’s not too late, but we all need to work together to make our rural businesses more resilient in the face of enormous challenge and change.

Clare Parnell is an agri-food specialist and Rural Lead on the LEP Board.