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.”
Payment commitment sought from minister
NFU CYMRU has asked the Minister for Environment, Energy and Rural Affairs to make an early commitment to maintaining the Basic Payment Scheme in Wales for 2021.
In a meeting this week NFU Cymru President John Davies asked the Minister, Lesley Griffiths AM, to commit to maintaining the Basic Payment Scheme unchanged for 2021.
Speaking after the meeting, John Davies said: “The events in Westminster these last few days mean that our future relationship with the EU remains as uncertain as it has ever been, with the prospect of a general election in the not too distant future, this means further political upheaval, and by extension more uncertainty. The fact that the UK Government’s Agriculture Bill was not carried forward when parliament was prorogued means that the intended legal basis for setting Welsh agricultural policy has now also disappeared, and we are now essentially back to square one.
“At the end of last year, Welsh Government announced that the Basic Payment Scheme would remain unchanged in 2020; we welcomed that announcement as it offered Welsh farming some stability at a critical time. The uncertainty in the intervening period has only intensified, NFU Cymru considers the possibility of a disorderly Brexit to be a very live possibility, either after a failure to reach an agreement at the end of any extended Article 50 period, or alternatively if the UK fails to agree on a future trading relationship with the EU27 during the transition period.
“There are many factors completely outside of our control which considered individually or collectively would have a very detrimental impact on Welsh agriculture. NFU Cymru is very much of the view that this calls for a cautious and restrained approach from the Welsh Government when it comes to developing future agricultural policy. We would urge Welsh Government to take its time and not to hasten to move away from the present arrangements until we have a far clearer picture of the sort of future trading relationship we will have with the EU27.
“We fully respect that the timing and nature of Brexit, the general election and the fate of the Agriculture Bill are all outside the hands of Welsh Government, but what we do ask for is the support of Welsh Government on the areas that sit within its remit. In our meeting with the Minister, we have asked if she will make an early commitment to the continuation of the BPS unchanged for 2021.
“We have also asked the Minister to ensure that the additional £5.2 million per year for the next two years made as part of the UK Government’s response to the Lord Bew review last month is used as a top-up to the BPS. This funding has been allocated to Wales because average Pillar 1 payments have historically been lower in Wales than in some other parts of the UK. We therefore firmly believe that as the Lord Bew review was about correcting this matter then the additional money should be made as a top-up to the BPS and not spent elsewhere.”
Public want food standards maintained post-Brexit
THE GOVERNMENT should ensure that all imported food meets the same high animal welfare and environmental standards in place on British farms.
That’s the overwhelming view of the public according to new research carried out by ComRes on behalf of the British Guild of Agricultural Journalists (BGAJ).
ComRes surveyed the public in September and found 84% support the view that imports should match British standards as Brexit threatens to open the door to imports from low cost producing, de-regulated markets across the globe.
The study found that just 16% would buy food they know is produced to lower animal welfare standards if it was cheaper than food produced to a high standard.
BGAJ President Baroness Rosie Boycott said: “The results of this study are a stark reminder to the government that the public values the high standards of British farming.
“There will always be countries able to produce cheaper food than Britain but it always comes at a cost. It could be the safety of the food, the farmer, an animal or the environment.
“With Brexit on the horizon, we’re on the brink of potentially seeing lower quality food imports flooding into the country.
“The survey resoundingly shows there’s no appetite for it and it’s the responsibility of government and the entire supply chain to put the safeguards in place to protect both British farmers and the consumer, whose heads may still be turned by attractive price deals in tough economic conditions, despite how they have responded.”
The results of the study come at a critical time for British agriculture – a sector which stands to lose more than most if the protection provided by the European Union’s single market is not replicated post-Brexit.
British standards of food and farming are among the best in the world thanks to decades of progress in the areas of production that matter most to consumers.
Many countries which can produce food cheaper than Britain often use production methods which are illegal here and across Europe; chlorine-washed chicken and hormone-injected beef being two well-reported examples.
Professor of Food Policy at the University of London, Tim Lang, said: “An overwhelming 84% want imported food to be of the same standard as home-produced food. Gung-ho supporters of yoking the UK to the USA post-Brexit should note this
“The survey suggests the UK public almost certainly recognises the need for the UK farming to tick lots of boxes. It’s got the message that farming is multi-functional. But have the politicians?”
84% of GB adults agree the government should ensure all imported food meets the same environmental and animal welfare standards as food produced in the UK. Only 2% disagree
A majority (53%) of GB adults would not buy food that is produced to lower animal welfare standards if it’s cheaper than food produced to a high standard of animal welfare. Only around one in six (16%) agree
Younger people are less likely to disagree with the statement than older people – it seems attitude to the trade-off between animal welfare and price swings towards animal welfare the older we get (45% disagree 18-34; 52% 35-54; 61% 55+)
62% of the public agree that UK farmers should receive financial support from the taxpayer to ensure a continued supply of food produced by British farmers post-Brexit, compared to just one in ten (10%) who disagree. 68 per cent of rural and 61 per cent of urban respondents agreed
Two in five (39%) GB adults agree that a UK farmer’s primary purpose should be to produce food rather than carry out environmental work, although just under a third (29%) disagree. 33% were not clear (26% neither, 7% don’t know)
CLIMATE CHANGE AND TECHNOLOGY
62% of the public agree farmers have an important role to play in generating renewable electricity from technologies such as wind turbines and solar panels, while around one in twelve (8%) disagree
Just under half (48%) of GB adults agree that a climate change levy should be charged on food with a higher carbon footprint, with the proceeds spent on encouraging carbon-friendly farming methods, compared to fewer than one in five (17%) who disagree
34% agree new plant-breeding technologies, such as genetically modified and gene-edited crops, should be used to grow food in the UK, compared to more than a quarter (27%) who disagree. Young people aged 18-24 are more likely to agree (46%) with the statement than any other age group
Retail and UK marketplace
Only 24% agree UK farmers receive a fair share of the profits made by retailers on the food that they produce, compared to more than a third (36%) who disagree. Rural respondents were more likely to disagree than urban respondents (43% rural vs 35% urban)
ACCESS TO THE COUNTRYSIDE
Almost two thirds (62%) of GB adults agree the public has adequate access to the UK countryside in terms of rights of way and footpaths, compared to just one in 10 (11%) who disagree. Londoners and those in the West Midlands were the least likely to agree with the statement (54% and 55% respectively), whereas those in Wales and the North East were the most likely to agree (both 70%)
Four in five (79%) adults are proud of the British countryside and the rural communities which sustain it, compared to just 3% who disagree. While urban respondents still have a high level of agreement with the statement (77%), almost nine in ten (88%) of rural respondents agree
NFU plans for New Horizons
NFU CYMRU’s annual conference takes place on Thursday, November 7, at 10 am with another stellar line-up of speakers.
To be held at the Metropole Hotel, Llandrindod Wells, the conference, titled, Welsh Farming: New Horizons, will focus on future opportunities for Welsh agriculture.
NFU Cymru President, John Davies said: “We are, once again, looking forward to welcoming hundreds of members to our annual conference. With so much uncertainty within the industry at the moment, this conference will be an opportunity for members to look beyond the horizon line towards future opportunities for the industry.
“Our annual conference has continued to grow and become the must-attend event of its kind in Wales, consistently attracting world-class speakers – and this year is no exception.
“At NFU Cymru we are both passionate and ambitious about the future of Welsh food and farming. We believe that given the right support from the government, we can continue to develop a profitable, productive and progressive agricultural industry. I hope that our expert line-up of speakers will help inspire members and allow them to head home with some thoughts and ideas on how to take their own farming businesses forward.
“We will also use the conference to present the first-ever NFU Cymru Sustainable Agriculture Award, kindly sponsored by Wynnstay. This award seeks to recognise the unparalleled contribution Welsh farming enterprises make to the economic, environmental, social and cultural well-being of Wales, and I’m very much looking forward to presenting this award to the very worthy winner.”
Speakers on the day include:
Lesley Griffiths AM, Minister for Environment, Energy and Rural Affairs, Welsh Government
Heather Hancock DL LVO, Chair, Food Standards Agency
Professor Robert Pickard, Food and Nutrition Expert
Professor Michael Lee, Sustainable Agriculture Expert
Dmitry Grozoubinski, Founder and Lead Trainer, ExplainTrade.com
Breffni Carpenter, Agriculture Counsellor, Permanent Representation of Ireland to the European Union
Sam Watson Jones, Co-Founder, Small Robot Company
Dr Andrea Graham, Head of Policy Services, NFU and ‘The Future of Food 2040’ Author
Campbell Mauchan, Head of UK Operations, AgriWebb
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