UK farmers dread no-deal Brexit

By: Chris McCullough

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UK Farmers’ Union head says Brexit no-deal would be disastrous for British farmers

NFU president Minette Batters
NFU president Minette Batters

UK Prime Minister Theresa May could breathe a rare sigh of relief this morning after she and the Conservative government she leads survived a vote of no confidence in the UK House of Commons on Wednesday.

But that relief will be short-lived, as she must now return to Brussels to try and reshape an agreement with the European Union about the terms of the UK’s withdrawal from the grouping.

The United Kingdom is scheduled to leave the EU on March 29 – and if no formal withdrawal treaty has been signed between the two governments before then, it means EU rules and regulations governing trade and travel, among others, will instantly stop applying to the UK.

UK politicians overwhelmingly rejected the first withdrawal agreement put to them on Tuesday, voting against it by 432 votes to 202.

UK to rely on overseas imports

UK National Farmers Union president Minette Batters has warned about the consequences for the UK farming industry should there be no deal to exit the EU.

"For example, a no deal Brexit could lead to an immediate reliance on overseas imports, produced to lower standards, while many UK farms struggle to survive," Batters says.

"Farmers want clarity on what the future trading relationship with Europe will be. We have argued for free and frictionless trade with the EU to continue, with no tariffs or non-tariff barriers."

However, the EU has already confirmed that in the event of no deal, it will apply its existing tariffs to imports coming from the UK. World Trade Organisation rules mean it could do no less.

Tarrifs to apply

A list of all of the tariffs the EU would apply to the UK is set out in the EU’s Common Customs Tariff (CCT) schedule.

Using cheddar as an example; in 2017 the UK exported 364,024 tonnes of cheddar to the EU tariff- free.

In the event of no deal the UK would face EU MFN tariffs on its exports and the EU WTO MFN tariff on cheddar is €1,671 (A$2,655) per tonne.

That means the tariff would cost UK cheese producers the equivalent of 14 pence (A25c) per litre.

Batters says the NFU would work with MPs to ensure a new Agriculture bill, set to be a major post-Brexit policy for the UK government, delivered for British farmers.

"We wish to see government use the provisions available within the Bill to deliver regulated contract terms for dairy farmers," she says.

"This would help rebalance the risk within the supply chain and place dairy farmers in a strong position to develop professional sustainable relationships with their buyers to be commercially focused, innovative and competitive."

Farming Roundtable warns of embargo

Both farmers and consumers in the UK could be severely affected by a no deal exit according to the UK Farming Roundtable, which consists of organisations representing farmers and growers from all agricultural sectors across the UK.

They say EU legislation could effectively result in a trade embargo on the export of UK animal-based products such as meat, eggs and dairy to the EU. These products can only be imported by the EU from approved countries, and it could take months for such status to be granted to the UK.

The lamb industry would be particularly impacted. In 2017, 31 per cent of domestic sheep meat production, the equivalent of 4.5 million sheep, was exported and 94 per cent was destined for the EU.

The UK government could avoid charging tariffs on imports to prevent a rise in food prices, which could have a negative impact on domestic food production and consumer choice, as well as an increase in imports of products produced to lower standards.

Export tariffs could be imposed on the 60 per cent of UK food, feed and drink that go to the EU, increasing export tariffs to an average of 27 per cent on chicken, 46 per cent on lamb, 65 per cent on beef, and range from €172 (US$196) to €1,494 (US$1,705) per tonne in pork.

It is likely that trade barriers will go up between the UK and EU which could limit the availability of many farm inputs such as veterinary medicines, fertilisers, plant protection products, machinery parts and animal feed. Furthermore, as the EU will no longer recognise UK organic certification bodies, exports of organic products to the EU would be severely curtailed.

The sudden end of labour mobility from the EU would cause serious problems when it comes to securing the necessary labour to harvest and process UK produce, as well as in related roles such as carrying out veterinary inspections.

For Batters, the situation is clear.

"Agriculture is the bedrock of the UK’s largest manufacturing industry, food and drink, which is worth £113 billion (US$145 billion) to the UK economy," she says.

"Volatile farm gate prices and interrupted supplies would put not only 500,000 farming jobs at risk, but the many firms that supply these farm and land management businesses.

"Our organisations remain committed to playing their part in managing Brexit in the best interests of both farmers and the UK public in the years ahead, but we believe that leaving without a deal on March 29 will lead, very quickly, to a struggling farming sector.

"A no-deal Brexit must be avoided at all costs," she insisted.

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