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A People’s Food Policy, Finance
|A People’s Food Policy|
|Working towards A People's Food Policy|
|Our engagement process|
|Transforming our food system|
|Policy priorities and implementation|
|Building a resilient movement|
- 1 Funding a better food system
- 2 Our vision
- 3 The case for change
- 4 Policy proposals
- 4.1 9.1 Create a new system for supporting England’s farmers
- 4.2 9.2 Support farming that delivers public goods
- 4.3 9.3 Improve financial support for regional infrastructure / 277
- 4.4 9.4 Fund community farms and new farmers
- 4.5 9.5 Tax carbon, junk food and meat
- 4.6 9.6 Reform the tax system
- 4.7 9.7 Fund agroecology research
- 4.8 9.8 Reform UK foreign aid to support food sovereignty, agroecology and the right to food in recipient countries
- 4.9 9.9 Implement fair prices and the true cost of food
- 5 See also
- 6 External links
Funding a better food system
‘There need to be sustainable long-term sources of funding to allow strategic developments to take place – short-term funding opportunities thwart strategic development and can cause mission drift.’
PROFESSOR NIGEL CURRY University of Lincoln (A People’s Food Policy consultation)
‘We need subsidies and taxes aimed at incentivising small- to medium-scale ecological food production, and taxes on highly processed and “industrial” food.’
RU LITHERLAND OrganicLea (A People’s Food Policy consultation)
‘Lack of local funding is a barrier for urban community food growing schemes – many national funding schemes only want to fund new projects, so keeping something funded that is established and works well is difficult.’
WORKSHOP PARTICIPANT Ecolocal (A People’s Food Policy consultation)
‘Subsidies for large-scale farming aren’t working. Encouragement and financial support should be given to smaller-scale businesses.’
WORKSHOP PARTICIPANT (A People’s Food Policy consultation)
‘A new system of taxes and subsidies to better support environmentally sustainable food production and make it more widespread and affordable is needed. This could include, for example, taxing the use of chemical fertilisers and pesticides and earmarking the money raised to support alternative practices. Small-scale farmers (who are often more productive per hectare and employ more people than large-scale industrial farms) should be provided with more financial support and access to funding and technology through government grants.’
WORKSHOP PARTICIPANT (A People’s Food Policy consultation)
Our vision is of a future in which the UK government has prioritised investment in a fair, sustainable and healthy food system – which is recognised as an investment in our collective health and prosperity. Our food system now enables people to access ample, healthy and nutritious food; protects and regenerates our land, rivers and seas; and pays people fairly for the work they do.
In this future, the farming subsidy system uses public money to support the farms that are producing good food while also protecting and improving the natural resources that farming depends on.
Funding is available for new farmers, to train and support them to develop their skills and enable them to access capital for innovation and infrastructure. Funding is also available for agroecological farmer-led research and larger-scale research projects aimed at solving the environmental and resource challenges faced by farmers, fisherfolk and land workers.
The tax system has been reformed. Local food networks are rewarded, food producers can afford to offer apprenticeships, and landowners are incentivised to make unproductive land available for food growing or other beneficial uses.
Externalities like pollution, climate change and obesity are a thing of the past, and no longer cost taxpayers billions of pounds each year. A series of fiscal measures – including a carbon tax – are helping to accelerate the changes needed to bring about a better food and farming system for everyone.
Public funding is now used to reduce chemical inputs, support domestic agroecological food production, reduce dietrelated health problems, eliminate food insecurity, build soil and provide the basis for a genuinely sustainable economy.
The case for change
There are a wide range of policy levers (carrots and sticks) that governments use to influence and support certain farming, natural resource, and landscape management practices. The most cost-effective and powerful levers are taxes and government regulation. Other levers include information campaigns, labelling systems, voluntary agreements, and transparency and information disclosures. These can all be part of a mix used to restrict damaging practices and encourage practices that support environmental and human health.
Farming in this country is heavily dependent on funding, whether through subsidies or grants. These subsidies help to pay for outcomes that the market will not or cannot pay for. But while this approach benefits many, it is also a doubleedged sword. Without it, only some of the largest businesses would survive, at the expense of biodiversity, and smallscale and family farming. With it, the largest landowners and businesses benefit the most anyway, and environmental and social protections are enforced at the lowest possible level to allow big businesses to expand their operations and increase profits wherever they can.
The EU’s CAP is the main provider of farming subsidies in England and the UK as a whole. The CAP also provides funding for agri-environment schemes and rural development grants that aim to protect the natural environment by promoting good practice.
It is important that we defend the need for food and farming to be supported by government funding. One of the threats to food safety and public health is austerity. Cuts to local authority and other government budgets mean all those charged with enforcement are struggling with capacity and loss of knowledge issues.
The government has an active role to play in ensuring that everyone has healthy affordable food, just as the government puts funding towards healthcare, housing and education. It therefore needs to ensure that taxes and subsidies are used to support how we eat and how we use land. The funding available for food production and farming should be increased, but the way the subsidy is distributed needs to radically change. Money needs to be made available to support young farmers and new entrants as well as more established farmers, improve regional and rural infrastructure, and increase agroecological and farming research. Careful reform of the tax and subsidy system will ensure everyone’s right to food and a healthy environment.
We know that we want a food system that enables people to access ample, healthy and nutritious food; that protects and regenerates our land, rivers and seas; and that pays people fairly for the work they do. This will cost money, possibly more than we spend at the moment. We argue that if it is spent wisely, an extra investment in a fair, sustainable and healthy food system, will be exactly that – an investment – in our future health and prosperity.
A People’s Food Policy is bold and ambitious. Some policy proposals outlined in this document have already been suggested by other groups and some have detailed costings associated. However, A People’s Food Policy does not include a detailed breakdown of financial options, or likely costs and savings; a full financial assessment, especially in the light of unknown changes post-Brexit, was beyond the scope of this project. We see this as part of the next stage of the work.
9.1 Create a new system for supporting England’s farmers
9.1.1 Maintain current levels of funding for farming. In 2015, payments from the EU’s CAP totalled around £3 billion and contributed between 50-60% of farm income. Given that food prices are low, and that these subsidies make up such a significant portion of farmers’ income, removing these subsidies would have a potentially devastating effect on the food and farming industry.
9.1.2 Reform the system for distribution of subsidies. This could be done by either removing areabased subsidy payments or capping/tapering them to level the playing field between smaller farmers and large landowners. This would also help to control the effect that the area-based payment system has on increasing land prices. Examples of alternatives to the current system include the universal payment approach,  and the Land Workers’ Alliance ‘Whole Farm Management Scheme’. /273 
9.1.3 Continue payments for targeted farming enterprises, allowing the government to give additional support to sectors which are struggling or need to expand, so that the UK can be more self-reliant in food. Currently the dairy industry is an example of a sector that is struggling because farmers are paid below the cost of production and not protected from cheap imports. Payments could be made on the basis of workers per holding rather than on the amount of land, which would also create jobs. It is crucial that subsidies don’t just go to the farming or food sector that ‘shouts the loudest’ and that measures are put in place to limit the influence of the lobbying industry. Sectors requiring support should be identified through consultation with a wide range of actors within the farming and food business sector, including small and medium-sized businesses.
9.2 Support farming that delivers public goods
9.2.1 Make subsidy payments conditional on delivering ‘public goods’.  This would result in more attention being paid to how food is produced and natural resources are managed. Farmers, and the owners of agricultural holdings, should be paid not simply to manage, but rather to improve landscapes and natural resources. They should also be encouraged to improve the sustainability of the farming methods used to produce food – for example by converting monoculture farms into mixed farms. Public goods include: access to healthy affordable food for all people; clean water and air; flood reduction and prevention; carbon sequestration; increases in biodiversity; support for pollinators; and public access to nature.
9.2.2 Remove grants for commercial large-scale biofuel and biomass. Both of these take up valuable land needed for food and fodder production, can exacerbate soil erosion, and inflate the price of land.
9.2.3 Increase support for the transition to organic, mixed and regenerative farming systems. This would be an investment for transition, rather than a long-term subsidy, since agri-environment schemes or similar would provide support to farmers providing environmental benefits or public good through their farming practices in the longer-term.
9.3 Improve financial support for regional infrastructure / 277
9.3.1 Provide grants and financial support for medium-scale and regional infrastructure projects. This would enable local and regional supply chains to become stronger and more competitive, as well as supporting small-scale businesses and the emergence of new businesses. This is something that is really lacking at the moment in the UK, especially compared to other European countries, and is a key barrier to more localised food production.
9.4 Fund community farms and new farmers
9.4.1 Provide funding through local authorities to support the development of community food growing projects. This could be done through the development of education and training programmes that are accessible to people in areas of deprivation, and by making more public land available for community growing projects (see policy recommendations 3.8.2 and 7.1.2).
9.4.2 Provide financial incentives and government funding to support farming apprenticeships and training. /278 This could be coupled with a widespread advertising campaign to promote the benefits of a career on the land.
9.4.3 Provide funding to support ‘starter farms’. This would allow newly trained farmers and growers to develop their skills before starting independent businesses.
9.4.4 Facilitate access to start-up capital through support schemes, grants and low interest loans. These are needed to rent or buy land and begin a sustainable farming or food business.
9.4.5 Increase availability of financing to reduce the cost of certification. Costs of organic and other environmental certification schemes can be too high for new farmers and small businesses. Subsidies should be made available to farmers to cover the cost of certification. This could be funded through diverting funds received through a ‘polluter pays’ mechanism, whereby industrial and chemical farming practices are also required to pay for a labelling system.
9.5 Tax carbon, junk food and meat
9.5.1 Carry out a feasibility study into the impact of a carbon tax on GHG emissions generated by fossil fuels. This would be with a view to eventually implementing a carbon tax, and using the money raised to subsidise renewable energy production in general and community energy initiatives in particular. This would have a considerable impact on agriculture-related emissions, which currently make up almost 10% of total UK GHG emissions. The tax could be designed along the lines of British Columbia’s carbon tax (introduced in 2008). /279
9.5.2 Implement a junk food tax. As with the Soft Drinks Industry Levy, money raised should be ring-fenced and used to fund access to healthy and sustainable food. This could be along the lines of Mexico’s tax on high-calorie snacks, adding to the Soft Drinks Industry Levy which the government confirmed would be implemented in the Spring Budget 2017. /280
9.5.3 Implement a meat tax, or VAT on meat. The tax would be offset for more sustainable meat producers through increased revenue from targeted agri-environment schemes. Additionally, a meat tax (linked to VAT) would have the potential to raise considerable revenue which could be spent on a scheme to support more sustainable meat production. An alternative could be to charge VAT on industrially produced meat only, with smaller and/or more sustainable production units exempt. 
9.6 Reform the tax system
9.6.1 Establish a Review Group to develop proposals for a ‘Location Charge’  (see policy recommendation 4.6.4).
9.6.2 Introduce tax breaks for landholders who offer fallow urban land for temporary food growing. This would incentivise landowners to turn unused land to productive use and create more educational and ecological spaces in our cities.
9.6.3 Local authorities should support local food networks by offering reduced business rates and affordable market access to local enterprises. This would encourage the growth of local food businesses and increase access and availability to local food for everyone.
9.6.4 Employment in agriculture should be encouraged through tax efficient apprentice and employment schemes. An example of this would be to reduce employer National Insurance contributions in the agricultural sector.
9.6.5 Improve inheritance tax laws on land owned by active farmers. Active farmers who pass their land onto family members who are also actively farming the land should be exempt from inheritance tax (see policy recommendation 4.6.2).
9.7 Fund agroecology research
9.7.1 Shift public research budgets towards identifying and developing solutions to agroecological challenges. This could include supporting producers who take a lead on innovative and experimental agriculture projects with subsidies and grants, as well as providing greater support for farmer-led research such as the Innovative Farmers programme. /282
9.7.2 Increase public investment in agricultural research funding. Funding currently made available through academic channels such as the Natural Environment Research Council and the Biotechnology and Biological Sciences Research Council needs to be increased and more of it channelled towards agroecological research.
9.8 Reform UK foreign aid to support food sovereignty, agroecology and the right to food in recipient countries
9.8.1 Financing for international aid programmes related to agriculture should focus on supporting agroecology and must not undermine food sovereignty in other countries. Sustainable farming must be the basis for agricultural development policy and practice. Business development for UK industry should not be pursued as a part of international aid programmes.
9.9 Implement fair prices and the true cost of food
9.9.1 Redirect subsidies and public funds to support sustainable food production methods. This would ultimately help make good food more affordable and accessible to more people, in particular those in low income households.
9.9.2 Address the rising proportion of income spent on non-food costs. This could be achieved by, for example, implementing rent controls and capping rising energy prices.
9.9.3 The Groceries Code Adjudicator should be given substantially more powers to ensure the affordability of food and that farmers gain a fair price for their work and produce (see policy recommendation 8.1.1).
Notes and references
- A recent report by the New Economics Foundation, commissioned by Global Justice Now, suggested giving each active farmer with at least one hectare (2.47 acres) of land a universal payment of £5,000. /274 This would assist in the transition to a public goods model for subsidies. Given that farmers with less than five hectares (12 acres) currently receive no financial support from the government through CAP, it is essential that a fairer system recognises the important contribution small farms play in the economy and environment and rewards them accordingly. /275
- The Land Workers’ Alliance has proposed simplifying the subsidy system so that all payments go through a single ‘Whole Farm Management Scheme’ (and area-based payments are scrapped) to include: (1) environmental options; (2) support for new holdings; (3) other capital grants; (4) contributions towards organic certification; (5) forestry planting and management; (6) special grants for innovative farm structures; and (7) grants for taking trainees and training. /276
- There is a distinction between the contracting model, where landowners competitively tender for the right to deliver a good and are given payment if they win the tender, and the more traditional subsidy model, where anyone that can prove they have delivered the public good is entitled to a fixed payment. We favour the latter model based on the subsidy system, as it encourages more people to make the effort to provide public goods.
- Both methods of taxation have their own potential complications including the issue of identifying ‘sustainable meat’ and ‘industrially produced meat’ and the regressive nature of VAT in general, and food taxes in particular. Given the increased evidence of the climate mitigation and health benefit potential of meat (and dairy) taxes, /281 there is clearly scope for further research and government support to explore policy options.
- Some forms of this are known as Land Value Tax (see separate footnote).