Can Starmer hold Labour’s emerging rural coalition together?
5 options to respond to the farmers’ protests.
Starmer’s Environment Secretary, Steve Reed, has said Labour intends to “park our tanks on Tory fields” after multiple polls over the last couple of months showed his party winning unusually high levels of support in Britain’s most rural constituencies.
This effort will be challenging given Labour’s intention to push through controversial reforms to planning law to get more houses built, and unlock more onshore wind and solar generation to achieve carbon-free power by 2030 (including by upgrading power grid infrastructure like pylons and substations.) But these changes may in the end be delivered with less resistance in the countryside if they can simultaneously win support in these places through their other policies that impact rural communities and, in particular, farms and farmers.
Yet with certain farming practices now responsible for more of Britain’s climate footprint than power stations, as well as being the biggest cause of the toxicity in our rivers, it will require a very careful strategy to fix these high-profile problems without aggravating the challenges already mounting for our farmers.
Farage has already spied a political opportunity.
As Onward’s Adam Hawksbee rightly told The Times, “Normally you would use the polluter pays principle but that won’t work with farming because you’d just end up putting them out of business and importing more food from overseas.”
In recent weeks the biggest protests in Welsh history took place in Cardiff, and tractors temporarily blocked the M4, suggesting Sunak’s current approach is not working.
High labour and fertiliser costs, an ongoing squeeze from profiteering food manufacturers and retailers, extreme weather impacts driving up costs (especially after the recent record-breaking rains), and increased competition arising from post-Brexit trade deals with Australia and New Zealand, are all putting unprecedented pressure on farm businesses. Meanwhile, the public expects farmers to reduce their environmental footprint but leaks have revealed DEFRA has already been put in ‘special measures’ for the absence of policies to do this.
All these factors suggest Keir Starmer and Rachel Reeves will want to offer an alternative way forward.
So, what are their options?
Dump more of the green agenda.
Contrary to certain media reports, farming leaders have been consistently clear they don’t believe the solution to their problems lies in watering down climate ambition. In fact, the NFU championed the adoption of Britain’s Net Zero target in January 2019, even before Theresa May legislated it that summer.
Farmers who spoke at the recent protests in Cardiff reaffirmed their support for cleaning up agriculture and emphasised that, like their European counterparts, they support the transition but want a fairer approach to delivering it. Some British farmers published a manifesto for what this could look like.
Another green U-turn is obviously unlikely to be attractive to Starmer, especially given the centrality of the environmental agenda to the leader’s missions, and the importance of this agenda to Labour’s supporters (including their green-minded likely new MP intake). It would also wind up the biggest mass membership organisations in the country such as the National Trust and the RSPB for whom greening agriculture is a top tier priority just at the moment when those groups could plausibly strike a deal with Labour on planning reforms were they to see real progress to reduce the environmental impact of farming.
Even after Sunak’s Net Zero pivot, the Tories do not look to be going down this route either. This is probably in part because they only just built these new schemes, but also because the Treasury sees some of the most cost-effective carbon savings coming from delivering modernisation in farming.
Redirect farming subsidies towards EU-style food production quotas.
Michael Gove’s proposals to use Britain’s escape from the EU Common Agricultural Policy to link public money to public goods were popular across the political spectrum, including with Labour.
The NFU would like to see targets for UK food production that could imply a return to farm subsidy schemes like those their members got used to under the unreformed EU Common Agricultural Policy. But winding the clock back to the sort of subsidy framework that existed not just before Brexit, but before recent rounds of EU reforms, would likely have the effect of making green goals un-achievable, and would be seen as wasteful use of public money by the Treasury. It would also pass up a real opportunity created by Brexit.
It was striking that despite their warm words on securing food production, neither Sunak’s speech to NFU conference, nor Starmer’s, backed food production targets. In fact Starmer re-committed to keeping Gove’s reforms saying, “On environmental land management – I have said: it’s the right direction. There’s no point overturning the applecart.”
Make new green farming payments work better.
Dumping green goals and/or setting targets for food production might not be smart or attractive solutions, but that doesn’t mean Labour couldn’t seek to refine environmental payment schemes like ‘ELMS’ so that they work better for farmers at the sharp end of today’s challenges. For example, a scheme designed to ensure that upland livestock farmers are much better rewarded for the contribution they make to meeting climate and nature targets could be popular and would tick lots of policy boxes; as would a greater focus on improving river water quality, for example by creating natural buffer zones between farmland and rivers.
Payments for storing more water on farmland at times of heavy rainfall would help farmers make ends meet when they can’t get on their land to grow crops whilst investing in farm reservoirs would also reduce the rising risks from summer droughts. Above all, the key to creating schemes that work and are popular, is for farmers to be involved in their design from the start; and for politicians to listen to their feedback and adapt.
Adopt an investment strategy to modernise UK farming.
With farmers facing higher costs, and more demands for farm subsidy budgets to deliver on more and more objectives, there is pressure from both farmers and green groups for the Chancellor to grow the overall farming budget envelope currently set at £2.4bn for England.
Given the fiscal constraints and focus on tax cuts over investment, there is so far little to suggest more money will be forthcoming from Sunak and Hunt, though they may revisit this in the face of Lib Dem pressure in Blue Wall seats. (Ed Davey’s party is promising to grow the budget by a billion pounds.)
Having slashed the overall envelope of funding to support the climate transition, Starmer and Reeves did not include any additional money for farmers in their updated investment plan. It remains to be seen if this could change at the point of their manifesto or spending review, when they may consider that investing in the use of cleaner technologies in the farming sector could yield an economic return and shore-up Labour’s new rural coalition as well as their climate mission.
Whilst Starmer and his team will be sensitive to any policies that risk driving up costs for households, they will be keen to do more to create new opportunities for farming communities through other means: for example, they are already planning to change public procurement rules to ensure that more of the food supplied to schools, prisons and hospitals is produced here.
Other options could include encouraging supermarkets and others food supply chains to invest more directly in farms; supporting farmers who want to diversity their businesses by processing more of their own food and/or by retailing more directly to customers; and expanding environmental markets, so that the private sector, as well as the state, pays for environmental goods and services on farms.
Reform trade policy to ease competitive pressures on farmers.
Perhaps the most obvious way Labour could help farmers, and shine a light on the Government’s failures in this area, is to double down on their willingness to protect farmers and consumers from poor quality imported food. Sunak’s Cabinet is split over the impact of low-standards food imports undermining British farmers' ability to compete. The DEFRA Secretary Steve Barclay wants to highlight homegrown food that has been produced to higher standards through the labelling of goods in supermarkets but the Trade Secretary Kemi Badenoch is resisting the move.
Labour could go further to support farmers harmed by Liz Truss trade deals by improving the terms of trade with the EU. This could both grow access to the European market to sell farm produce and make terms of trade easier. Labour has already signalled it would look to do this through reduced food checks at the border and a new Veterinary agreement with Brussels. Starmer recently hinted at broader alignment with the EU over environmental standards in a move that could enable an even deeper trading arrangement with our closest neighbours but that would likely limit the influx of goods produced under lower standards in the rest of the world, which would likely delight farmers, animal welfare, and green groups.
Judging by their recent discomfort when confronted about this issue by farmer’s leaders on GB News, Nigel Farage and Jacob Rees-Mogg may be the two people least likely to enjoy a strong Labour move in this direction.
Hope someone in Labour HQ gives this a read.