'Governments are running hard to stay still when the game plan was to reduce support and free up trade. Protectionism is still alive and well'

The only thing notable about the King's Speech this week was that it was the first time in 70 years that parliament was opened with a king's rather than a queen's speech.

Beyond that, there was barely a ripple of excitement, and certainly not for agriculture. Despite all the promises of 'Brexit freedoms' it has not delivered for agriculture – and with the work programme set for the final full parliament before a general election this is not going to change.

The government's only foray into agriculture was to make permanent, via legislation, a block on the export of live animals. As the British Veterinary Association pointed out this is a one-sided trade gesture to appeal to urban voters. There will be no matching controls on imports of livestock, leaving the UK open to diseases we have tried hard to eradicate.

We can only continue to look with envy to other countries where governments have made a stand on behalf of farmers, even if that scuppered the potentiality of attractive trade deals.

On the international stage the Organisation for Economic Cooperation and Development (OECD), which represents the world's developed economies, has been turning its attention to farm subsidies and their impact on trade. This is a lengthy annual report, but it can be summed up in one sentence.

After years of pressing for change and for more free trade the situation is worse today than when concerns were first raised. The message from the OECD is that consumers are picking up the bill via a double-edged sword.

They are paying higher prices because of barriers to global free trade and on top of that paying, through taxes, for production-linked support payments. It is clear, reading between the lines of the report, that the gallons of green-wash poured over agricultural support have not altered the core economic outcomes.

The latest report looks at the years from 2020 to 2022. These covered the impact of Covid, the war in Ukraine, and the massive inflation we saw in food prices. However, as dramatic as these events were individually and in combination, they are scant justification for the upward trajectory of the agricultural support curve.

This would have happened, with or without those events. In broad terms, governments around the world are spending around £700 billion a year on agricultural support. This is two and a half times greater than 20 years ago, although to be fair the growth in agricultural production is marginally higher than that increase in support.

That means governments are running hard to stay just about still when the game plan was to reduce support and free up trade between countries and trade blocs. Despite political rhetoric, old-fashioned protectionism is alive and well

The reason the OECD is so critical of agricultural support is that its core commitment is to free trade. It also has concerns that support is a luxury only 'rich' countries can afford, while poorer countries pay through higher international food prices – a situation made worse by the war in Ukraine and the loss of Russia as a major commodities exporter.

The report confirms that it is the major economic powers that spend freely on farm support. This is a measure of scale, but there is a surprise on the list of big spenders. The United States was responsible for 36 percent of the total spend on farm support while the EU accounted for 13 percent. The surprise second and third countries, after the US, were India and China, reflecting prosperity from growing economies and the size of their populations.

As to where the money went, £510 billion of the £700 billion went directly to farmers. This rose by £80 billion during Covid as governments battled to maintain food security in the face of a global threat to trade. Payments to farmers included production-linked subsidies, still in place in many countries and some EU member states. Consumers paid directly for half the total via duties on imports driving up prices and for the balance through taxation.

The OECD conclusion is that support reinforces existing structures and discourages change at the farm level. It also says tariffs and other measures prevent markets from operating properly, meaning in economic terms they cannot deal with surpluses or shortages from harvests or wars.

This all makes the old, pre-EEC, UK deficiency payments system that let consumers gain from lower prices while the government made up farm incomes, look better than the many systems that have followed.