The future of CAP subsidies in the UK

Posted on 14 Jun 2017 by Brick Court

Aidan Robertson QC

The Common Agricultural Policy accounts for nearly 40% of EU expenditure during the 2014-2020 budget period.

http://researchbriefings.parliament.uk/ResearchBriefing/Summary/SN06455#fullreport

UK agriculture receives approximately €3bn CAP funding annually in various forms.

http://researchbriefings.files.parliament.uk/documents/CBP-7602/CBP-7602.pdf

The new Secretary of State for Environment, Food and Rural Affairs, the Rt Hon Michael Gove MP, was questioned on Radio 4’s Today Programme on 13 June 2017 on the future of CAP subsidies in the UK, being asked ‘can you guarantee them to the scheduled end of this Parliament’ i.e. 2022? Mr Gove replied ‘yes – that is a manifesto commitment’.

http://www.bbc.co.uk/programmes/b08tbdxw at 2:19:30.

This appears to give broad continuity of funding for the agriculture sector in the immediate post-Brexit years.

It is, however, important to appreciate that the legal environment for the agriculture sector is nevertheless likely to change on Brexit, whatever the terms of the forthcoming (one still assumes) Great Repeal Bill. Until now, agriculture has enjoyed a limited degree of protection from the full application of EU rules on competition conferred by Article 42 TFEU. This provides that Union rules on competition apply to production of and trade in agricultural products only to the extent determined by secondary legislation, account being taken of the objectives of the common agricultural policy set out in Article 39 TFEU. The extent of that protection is currently under consideration by the Court of Justice of the EU in the Endive Cartel case (Case C-671/15 APVE). Advocate General Wahl’s opinion was delivered on 6 April 2017 and the Court’s judgment is awaited.

http://curia.europa.eu/juris/liste.jsf?language=en&jur=C,T,F&num=c-671/15&td=ALL

That protection will cease to apply once the TFEU itself ceases to apply on Brexit, thus exposing the agriculture sector to the full application of the UK’s domestic competition law. I will examine the potential implications in a future blog, after the Endive Cartel judgment has been handed down.