Farmers' fury over proposed £3bn funding cuts: Former minister calls to cut ALL subsidies to UK agriculture once Britain leaves the EU 

• e-mail

Farmers reacted with fury last night to a proposal to axe their £3 billion in taxpayer handouts after the UK leaves the EU.

Former Environment Secretary Owen Paterson told a secret ‘Brexit seminar’ of former Cabinet Ministers at an Oxford college that Theresa May should follow the example of New Zealand, which ended government help for farmers virtually overnight in the 1980s.

The shock forced a radical shake-up in the country, with sheep farms replaced by deer parks and vineyards.

But critics claim it led to widespread economic distress and a sharp rise in suicides.

New Zealand, pictured, ended government help for farmers virtually overnight in the 1980s

During the session at All Souls College, attended by Eurosceptics John Redwood, Iain Duncan Smith and Peter Lilley, Mr Paterson argued that there were ‘clear lessons to be learnt from the policy adopted by New Zealand… which demonstrated that food production can increase when farmers are given the freedom to react to the market’.

In his speech, which has been studied by Environment Secretary Andrea Leadsom, Mr Paterson said that since subsidies were removed, ‘sheep numbers have halved, but a spectacular increase in productivity means New Zealand still produces a similar quantity of meat’. But last night, the National Farmers Union hit back, saying New Zealand now had the ‘highest rate of farmer suicides in the world’.

And one pro-Remain MP called it a ‘potty plan’ which would drive food producers out of business.

The £3 billion which British farmers receive each year from the EU’s controversial Common Agricultural Policy accounts for around half of their total national income.

The Government has only guaranteed that the subsidies will continue at their current level – covered by UK taxpayers – until 2020, the year after Brexit.

A source close to Ms Leadsom said yesterday that Ministers were unlikely to follow the New Zealand precedent directly because ‘the rug had been pulled away too abruptly’, although the way in which subsidies are applied would be looked at closely.

But Mr Paterson told The Mail on Sunday that the results in New Zealand had been ‘spectacular’: ‘With subsidies, you had all these sheep doing terrible damage to the landscape, and disgusting wine which was only fit to be used as a car coolant.

‘Now they have a fabulous viniculture and a highly productive, diversified sector. There is still a role for government subsidies, but only if there is a transparent public good or environmental benefit.’

Former Environment Secretary Owen Paterson told a secret ‘Brexit seminar’ of former Cabinet Ministers at an Oxford college that Theresa May should follow the example of New Zealand

At the Oxford gathering in January – convened by Mr Redwood, an All Souls Fellow – Mr Paterson said: ‘The lesson from New Zealand is surely that farmers must look for the opportunities that exist both at home and beyond their borders. The rural collapse which was predicted by some did not occur… there were only 800 forced sales from the 80,000 farms, and only around one per cent of farmers were forced to leave the industry.’

He added that he believed farmers should still receive taxpayer support, but it should be directed at areas such as the Lake District with specific needs, and where food production would not be economically viable without government help.

Minette Batters, deputy president of the NFU, said: ‘There is a lot of hype spoken about New Zealand. It is an entirely different natural environment, and after all the changes they have endured the country has the highest rate of farmer suicides in the world.’

Labour MP Mary Creagh, from the Brexit Open Britain campaign, said: ‘As Britain leaves the EU, hard-working farmers need all the support from the Government they can get. It will terrify farming communities across Britain that hard Brexit enthusiasts are plotting in Oxford colleges to propose scrapping farm subsidies lock, stock and barrel after Brexit.

‘Britain is not New Zealand, and evidence suggests that huge numbers of UK farms would be forced to shut their gates if Paterson’s potty plan was put into action.’