Philip Hammond confirmed some months ago that the Single Farm Payment would be with us ‘until 2020’. I am still not entirely clear what this precisely means. Presumably the 2019 reporting and payment season will hold true, but in all liklihood there will be an election in Spring 2020, so what happens therafter is anyones guess.
However, it must be questionable if the current system and level of support will remain. Faced with a number of competing claims I would have thought it unlikely that farms subsidies would prevail, despite the obvious implication that unsubsidised UK farmers will be competing head on with subsidised European farmers.
Practical implications apply here too. It must be unwise to enter into new longer term FBT’s unless the uncertainty of 2020 is catered for in the small print. More pressingly, what will be the financial implication on the individual farm business if the support mechanism is withdrawn? Given the stark fact that UK farmers are certainly unable to influence world prices, it would be prudent to establish now just how long the existing business could survive without support. If the answer is ‘not long’ then at least there are 2-3 years to be able to do something about the expected outcome.
Consequently and unfortunately it is difficult for this writer to be economically optimistic. When all forms of business strive for economies of scale, the UK are now seemingly going in the opposite direction. Constitutionally we may well have regained control of our laws, all well and good. It is just to be hoped that the country is able to be economically prosperous enough to enjoy the new freedoms that may bring.