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New Post-Brexit Farm Subsidy System Revealed

Geoff Riley

26th January 2023

If you are teaching or studying the economics of subsidy, then details of the new arrangements for farm subsidies in the UK in a post-Brexit environment might be worth checking.

These are subsidies that have taken five years to draw up and are a post-Brexit replacement for the EU common agricultural policy (CAP).

The government has introduced details of the subsidies to be made available many of which focus on payments for "actions" that help protect and enhance the environment. For example, farmers will be paid as much as £537 a hectare for creating fenland out of lowland peat and £1,920 a hectare for maintaining land to produce fruit to organic standards, down to £22 a hectare for assessing soils and £10.38 for establishing a skylark plot.

Read: Post-Brexit farm subsidies in England revealed

There are fears that the bulk of the subsidy payments will go to larger land-owners rather than hard-pressed hill farmers.

Explain how and why farmers might be subsidised to help the environment

Farmers may be subsidised to help the environment in a number of ways. One common method is through payments for environmental services, where farmers are paid to implement practices that have a positive impact on the environment. For example, farmers may be paid to maintain or create wildlife habitats, restore wetlands, or reduce the use of pesticides and fertilizers.

Another way farmers may be subsidised is through conservation programs, which provide funding to farmers who adopt sustainable farming practices or implement land management strategies that protect natural resources. This includes things like implementing cover crops, diversifying crop rotations, and reducing tillage.

By providing subsidies, governments can encourage farmers to adopt environmentally-friendly practices that may not be profitable in the short term, but have long-term benefits for the environment and society. Additionally, such subsidies can also help farmers to cover the costs of implementing and maintaining such practices, which can be significant.

Geoff Riley

Geoff Riley FRSA has been teaching Economics for over thirty years. He has over twenty years experience as Head of Economics at leading schools. He writes extensively and is a contributor and presenter on CPD conferences in the UK and overseas.

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