BRITISH farmers would produce more food themselves in the event of the UK leaving the EU without a trade deal, a cabinet minister has suggested.
Transport Secretary Chris Grayling was responding to industry claims that food prices could rise sharply in the event of a no-deal Brexit.
He said this would hurt farmers on the continent as the UK was a key market.
UK WILL ‘GROW MORE’
However, if this happened, he said the UK would respond by ’growing more here and buying more from around the world’.
It comes amid fresh warnings from supermarket bosses that the UK leaving the EU in March 2019 without at least the outline of a future trade partnership would be bad for British consumers.
Sainsbury’s chairman David Tyler told the Sunday Times that a no-deal Brexit could result in an average 22% tariff on all EU food bought by British retailers.
The British Retail Consortium has said this could translate into a minimum 9% rise in the cost of tomatoes, 5% for cheddar and 5% for beef, while warning the figures could actually be much higher.
Agricultural products are one of the UK’s most important exports while the UK sources roughly 70% of the food it imports from the EU, leading to claims that items could ’rot’ at the border if there are hard customs checks or supply chains are disrupted after Brexit.
BRITAIN THE BIGGEST CONSUMER
Given the UK’s importance to farmers across Europe, Mr Grayling said it was not in their interests to see an outcome which resulted in higher costs and new obstacles to trade.
“You may remember the brouhaha over the Walloon farmers when they objected to the Canadian trade deal. I had a look to see who their biggest customer was – it was us,” he told the Andrew Marr Show on BBC One.
“We are the biggest customers of the Walloonian farmers – they will be damaged if we don’t have a deal.”
But if the UK ended up without a deal, which would see it default to World Trade Organization (WTO) rules, Mr Grayling suggested domestic producers and retailers would respond by rethinking their sourcing.
“What it would mean would be that supermarkets bought more from home, that British farmers grew more and that they bought more from around the world,” he added.
“What we will do is grow more here and buy more from around the world but that will mean bad news for continental farmers and that is why it will not happen – it is in their interests to reach a deal.”
TARIFF-FREE TRADE VITAL
The British Retail Consortium said maintaining tariff-free trade with the EU during a post-Brexit transitional period was vital to preventing the UK facing potential tariffs straightaway of up to 40% on some beef and dairy products under WTO rules.
The trade body, which recently published research on the subject, acknowledges forecasting the consequent impact on food costs is complex and a range of other factors would have to be taken into account.
But it said there was a risk that domestic producers could put up their own prices to increase their competitiveness and if this happened, the cost of items like tomatoes could rise by up to 18%, broccoli by up to 10% and cheddar by a maximum of 32%.
A spokeswoman said that while retailers could review their buying policies in the medium to long term to adjust, it was “very unrealistic to expect farmers to make up the surplus of produce straight away”.
‘NO NEED TO WORRY’
But writing in the Sun on Sunday newspaper, the former minister and prominent leave campaigner John Redwood said that although consumers may see their shopping basket change if there is no trade deal, ’there is no need to worry, our farmers will boost their output’.
“They don’t understand the cards in our hands as the EU’s main customer,” he wrote. “The government will be able to give us all a tax cut out of the tariff revenue it collects, so we need not be worse off.”
However, those more closely connected with farming have responded with incredulity to the blasé reassurances of Mr Redwood and the claims made by Chris Grayling.
GRAYLING TALKING ‘TRIPE’
Apple growers have already complained about a shortage of labour for this year’s apple harvest, with British jobseekers unprepared to face the rigours of doing jobs usually performed by migrant labour who have turned their back on the UK post-Brexit.
Lawrence Olins, the chair of British Summer Fruits, whose members provide 97% of all home-grown berries and soft fruit to the UK market, pointed out that UK growers had been unable to source labour this year while still a member of the EU. The prospects for finding sufficient labour after Brexit were even worse, he said.
Mr Olins said: “I have farmers who are moving to Portugal because they know they are able to hire people from the subcontinent. They know this. To hear Grayling come out with this tripe beggars belief.”
‘OUT OF TOUCH WITH FARMING’
While acknowledging that Brexit could create opportunities for UK farmers in some sectors in the medium to long term, Minette Batters deputy president of the NFU responded to Mr Grayling, saying: “I would say he’s out of touch with farming. Of course we want to produce more, but have the rest of the cabinet got the same view? I support what he is saying, but it’s quite hard to know how this translates. I’d like to know what Philip Hammond thinks, what Michael Gove thinks of this.”
Ms Batters continued: “This is not about ploughing the verges to grow more food, it’s about the absence of any food policy.
“We haven’t had a food policy for 43 years,” she said, pointing out that national food and environmental policy has been led by the EU since the UK joined the European Economic Community in 1973.
And, lest those cheerleading Brexit reach for the green ink and the word ‘traitor’, as they tend to when words they want to hear are subject to scrutiny, the NFU’s Director of EU Exit and International Trade Nick von Westenholz said: “UK farmers know that there will be opportunities arising from leaving the EU, including increasing the amount of home-grown food consumed by the British public. However, given the extent of our trade in food with the EU, failure to secure a comprehensive trade deal would cause considerable disruption to farming in the UK. Although there is some scope for import substitution, farming operates on long timescales. For example, the first crop to be produced post-Brexit will be in the ground in less than a year.
“Furthermore, due to the amount of food we import that isn’t grown here, as well as issues such as managing carcass balance, simply upping production to quickly offset any reduction in food imports isn’t feasible.
“In the long term Brexit will offer new opportunities that farmers will be eager to take, but in the meantime the UK must maintain clear and free trade flows with the EU where the vast majority of our food exports are headed. Over the next few weeks, the NFU are embarking on a series of Brexit Roadshows across the country in which we will discuss the sorts of challenges and opportunities facing UK farmers in the near future.”
SHEEP FARMERS COULD BE WIPED OUT
FUW President Glyn Roberts, whose members number many of those small hill and family farms that would be most affected by no deal and a switch to World Trade Organisation (WTO) tariffs criticised Chris Grayling’s comments, providing a stark warning that sheep farmers were at risk of being wiped out unless commitments were given to match subsidies already received via CAP.
The FUW said that the transport secretary seemed to have ignored research commissioned by the government that showed the ’cataclysmic’ impact a hard Brexit would have on British farming.
Glyn Roberts, the FUW’s president, said: “Mr Grayling seems unaware of the results of the economic modelling commissioned by his colleagues in Defra, which paint a far more complex picture for the UK’s many agricultural sectors, and suggest in some ‘harder’ Brexit scenarios UK food production would collapse.”
Mr Roberts pointed out that the economic modelling of Defra and detailed data published by the Agricultural and Horticultural Development Board released on October 10, ’predict pretty cataclysmic collapses in many or most agricultural sectors in the event of harder Brexit ”no-deal” type scenarios’.
The FIPRA report, which The Herald covered in August, revealed that Welsh sheep farmers would most likely be devastated by a hard exit from the single market, with tariffs for Welsh lamb – the overwhelming majority of which is exported to continental Europe – going from zero to 32% overnight, even on WTO most-favoured nation status.
FARMS’ BOTTOM LINES CUT
The AHDB report, to which Mr Roberts referred, suggested that average farm profitability could drop from £38,000 to £15,000 a year in the worst case scenario as a result of policy and performance challenges that come from Brexit, modelling work has revealed.
AHDB’s latest Horizon report, Brexit scenarios: an impact assessment, for the first time quantifies the potential impact of Brexit on UK farming businesses.
It maps out a range of possible post-Brexit situations and models their effect on Farm Business Income (FBI) across agriculture and horticulture’s levy-paying sectors.
The analysis projects the effect of different trading arrangements, farm support measures and labour availability.
They range from a ‘business as usual’ approach with current levels of support; a liberal approach to trade with tariff-free access to the UK and reduced support; to a cliff-edge Brexit, reverting to WTO regulations and with dramatically reduced support payments.
The model allows AHDB to re-run the scenarios in future as more detail of policy decisions in those key areas emerge, to form a more accurate picture for the industry. AHDB will also later publish specific results for Scotland using Farm Business Survey data.
Under the three scenarios outlined in the report, changes in the UK’s trade relationships will impact farmers’ bottom line when the UK leaves the Single Market, whether or not a Free Trade Agreement is negotiated with the EU.
Policy decisions also leave sectors where direct support has been a key part of farm revenues such as beef, lamb and cereals, particularly vulnerable.
Mr Bicknell added: “Buzzwords like competitiveness, resilience, productivity are not new to agriculture but Brexit brings renewed focus on farm performance. Do nothing and businesses that are currently profitable run the risk of heading into the red. There is plenty that individual businesses can do now to get fit for the future.”
‘NO DEAL’ FAVOURS BIG BUSINESS
One of the key challenges facing government will be protecting farmers from a hard landing, no matter what Brexit strategy is followed and whether or not a trade deal can be done.
Even the best trade deal will not be on the same terms as the current single market access, as EU governments have made clear, that means there will have to be a substantial structural adjustments to both the support given to farmers by the devolved governments and English parliament and steps to preserve small farms – which are a significant economic driver of rural economies.
The AHDB document highlights the risks faced if Britain leaves the EU without easy, tariff-free access to the single market, with Less Favoured Area livestock farm incomes particularly hard hit, falling to negative figures in the worst case scenario. Lowland livestock farms fare little better, with incomes falling to less than £4,000 in two of the three scenarios looked at, and across all UK farm types, incomes more than halve under an ‘extreme’ Brexit scenario.
But while results differ on a sector-by-sector basis, the top 25 per cent of businesses, regardless of sector, remained profitable under every scenario. In short, a hard Brexit favours large farmers – such as the grain barons of east England – and larger ‘industrial’ dairy and livestock farmers.
Glyn Roberts said: “The EU and UK sent a letter last week to WTO members outlining an agreed position on how quotas should be split when the UK leaves the EU, but the USA and other WTO members, including Canada, Argentina, Brazil and New Zealand, had already written to the EU and UK WTO ambassadors stating their objections to the proposals.
“The letter, signed by seven of the WTO’s 164 members, states ‘Such an outcome would not be consistent with the principle of leaving other [WTO] members no worse off, nor fully honour the existing TRQ access commitments. Thus, we cannot accept such an agreement’.
“This underlines the fact that the current EU negotiations are just the start of a complex process that would normally take decades.”
First Minister to address FUW’s AGM
THE FARMERS’ UNION OF WALES is looking forward to welcome First Minister Carwyn Jones as the keynote speaker at its annual general meeting, which is taking place on Monday, June 18, at the William Davies Suite, IBERS in Aberystwyth.
The event is due to start at 1:30pm with a warm welcome from FUW President Glyn Roberts, which will be followed by a question and answer session on Brexit and #FarmingMatters.
Speaking ahead of the AGM, Glyn Roberts said: “We look forward to welcoming the First Minister to our AGM, which is likely to be his last engagement with the FUW in his current role.
“It promises to be a great afternoon of farming matters discussions, with a strong focus on agriculture in Wales post-Brexit, as well as #FairFarmFunding and I hope to see many of you there.
“And as is tradition we will also be revealing the winners of the FUW Owen Slaymaker Award, FUW New Members Award, and the FUW Long Service Award, in addition to a variety of FUW Insurance Services awards.”
Manifesto sets Brexit agenda
LEADERS of over 100 organisations from across the nation’s food supply chain have put their names to a manifesto setting out the key principles that can help ensure Brexit is a success for the supply of food in the UK.
The UK Food Supply Chain Manifesto, has been drawn up by organisations representing farmers producing the raw ingredients and their suppliers, right through to manufacturers and retailers. It sets out the need for positive outcomes on trade, labour, regulation and domestic agricultural policy.
With little more than 10 months to go before Brexit, the manifesto emphasises the importance of ensuring our departure from the EU does not undermine the food production and supply sectors in the UK.
The manifesto has been sent to the Prime Minister by NFU President Minette Batters on behalf of the signatories, as well as other key cabinet ministers.
Mrs Batters said: “Today we are presenting a united voice as a food and farming sector worth at least £112bn to the UK economy and employing around 4 million people; a food and farming sector that meets 61% of the nation’s food needs with high-welfare, traceable and affordable food; a food and farming sector that cares for three-quarters of the iconic countryside, that, in turn, delivers over £21bn in tourism back to our economy.
“In the manifesto we warn, as a collective, that a Brexit that fails to champion UK food producers, and the businesses that rely on them, will be bad for the country’s landscape, the economy and critically our society. Conversely, if we get this right, we can all contribute to making Brexit a success for producers, food businesses and the British public, improving productivity, creating jobs and establishing a more sustainable food supply system.
“When it comes to the nation’s ability to produce food, we believe it is critical that the different elements of Brexit are carefully considered by all Government departments – including the Prime Minister who has herself spoken about the importance of supporting our sector through Brexit in recent days.
“As we enter this critical period in the Brexit negotiations, the signatories to this manifesto will be looking to Government to ensure its objectives are aligned with ours to ensure British food production – something of which every person in this country enjoys the benefits – gets the best possible deal post-Brexit.”
One key objective in the manifesto appears likely to run headlong into so-called ‘red lines’ set by the most enthusiastic of Parliamentary Brexiteers, who appear happy to countenance a future for food and farming in which small farms and the rural enterprises which depend on them are swept away in a torrent of chlorinated chicken and hormone-treated beef.
The report states: ‘The UK and the EU27 will continue to be each other’s most important trading markets in food and drink. In 2016, 60% of UK exports and 70% of UK imports in food, feed and drink were with countries in the EU.
‘Working towards a mutually beneficial trade agreement is a clear priority for the UK food supply chain, one which guarantees tariff-free trade and with as limited a number of non-tariff restrictions as possible. It is imperative that the EU and UK reach an agreement that maintains continuity in existing trade arrangements as far as possible, including the avoidance of a hard border in Northern Ireland’.
Avian Influenza Prevention Zone ends
CABINET SECRETARY for Energy, Planning and Rural Affairs Lesley Griffiths has confirmed that the All Wales Avian Influenza Prevention Zone will be lifted with effect from Friday, May 25.
The Cabinet Secretary has taken this decision based on an updated veterinary risk assessment conducted by the Animal and Plant Health Agency (APHA) which found the risk of incursion from wild birds has reduced from High to Low. Similarly, the risk to poultry is also Low.
The Prevention Zone was introduced on January 25 to mitigate the risk of infection following three separate findings in England of Highly Pathogenic Avian Influenza H5N6 in Wild Birds.
In Wales, there has been only one finding in a wild bird this year. There have been no cases of H5N6 avian influenza in poultry in the UK this year and the poultry sector retains its OIE disease free status.
Cabinet Secretary said: “In January, I took action and declared the whole of Wales an Avian Influenza Prevention Zone in response to Highly Pathogenic Avian Influenza H5N6 findings in England. This was a precautionary measure to minimise the risk of infection to poultry here in Wales.
“We have since been monitoring the situation closely and the latest risk assessment by APHA has concluded that the risk has reduced from High to Low for wild birds and the risk to poultry is also Low.
“Based on this evidence-based veterinary advice I am pleased to announce that the current All Wales Avian Influenza Prevention Zone will come to an end with immediate effect. Whilst this is welcome news it is important to remember avian influenza remains a constant and real threat to our poultry and other captive birds.”
Chief Veterinary Officer for Wales, Christianne Glossop added: “I cannot stress enough the need for all keepers of poultry and other captive birds to remain vigilant for signs of the disease and to continue to practice the very highest levels of biosecurity.
“If anyone suspects disease they should contact the Animal and Plant Health Agency immediately. Also, we can all play a part in supporting the ongoing surveillance by reporting any findings of dead wild birds to the GB helpline.
“I would also like to remind all poultry keepers with 50 birds or more they must register their flocks on the Poultry Register and strongly encourage all poultry keepers, including those with fewer than 50 birds, to register. This will ensure they can be contacted immediately, via email or text update, in an avian disease outbreak, enabling them to protect their flock at the earliest opportunity and minimise the spread of infection.”
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