It is emblematic that on the day after the EU referendum, Donald Trump (perhaps the next president of the United States) was in Scotland, inaugurating his controversial new golf resort. Oblivious to the country around him which had just voted overwhelmingly to remain in the EU, Trump congratulated his audience on their new independence.
Yet, he was not speaking to the common people of Britain (much less to Scotland, trapped, along with Wales, in the Brexit scenario), but those in his audience, the new placeholders of aristocracy – wealthy investors, media moguls, business leaders and others set free from EU barriers to land ownership, property development, tourism and speculation.
The EU’s Common Agricultural Policy (CAP) has been the greatest barrier to a collapse in the UK property market. The CAP is concerned with market stability, tariff-free trade in the EU and farmer livelihoods. It consists primarily in a subsidisation of farmer incomes through direct payments. It is well-known that most farmers make a loss on their operations and would not otherwise be able to continue without the subsidy. As the tendency toward losses is primarily due to the downward pressure on prices from supermarket competition and its monopoly on distribution, the farmer’s subsidy is in many ways a backdoor subsidy for the retail and food processing industries.
With the elimination of the CAP, these subsidies will disappear and it is possible that they will either not be replaced or will be phased out in the near term. The CAP has tended to maintain the status quo, not only protecting member states within the single market and in international trade deals, but also preserving the operations of loss-making farms. The IMF, which Angela Merkel brought in to manage the Eurozone, has been pushing its 188 international members to quickly reduce or eliminate farming subsidies, a policy shift at odds with the pace of EU policy. The UK could decide to weather the storm of a radical re-adjustment in the structure of land ownership, especially in agriculture where it would become a corporate affair.
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