UK FARMERS loss of 'purchasing power' outside the Common Agricultural Policy could threaten as many as a quarter of a million jobs up and down the non-farming supply chain.

Experts from the University of Kent’s School of Economics have warned the UK government that it must create a suitable replacement support for UK farmers once the country leaves the European Union and CAP payments stop.

In a paper written for the National Institute of Economic and Social Research by Professor Sophia Davidova, Dr Alastair Bailey and honorary Professor Ulrike Hotopp, they note that considering both the direct and indirect effects of farmers’ purchasing power, the loss of the CAP could have a significant effect on the UK farm economy, agri-environment and rural jobs.

Their analysis showed that the removal of farm support without a replacement could risk the loss of about 250,000 jobs in non-farm small and medium-sized enterprises, and that the majority of the affected jobs – around 200,000 – would be in highly rural areas, which would have a significant negative impact on rural job markets and economies.

The paper notes that currently more than half of UK farms are heavily reliant upon CAP payments for their survival, and adds that the government should see the end of access to the CAP as an opportunity to create a more effective system of subsidies that avoids the current situation where large, profitable farms receive the largest subsidies.

Dr Bailey said: "While it is true that the EU CAP payment represents a very large budgetary cost and that a large share of that is received by a small number of wealthy farmers, there are many farmers, particularly in the parts of the territory where farming is hard, who rely heavily on the CAP for survival.

"Since Brexit will result in the removal of CAP in its current form, the UK has the opportunity to design a replacement subsidy programme which targets need and helps to boost the rural and urban economic linkages."