THE SOIL ASSOCIATION has released a report on the potential food safety risks posed by potential free trade deals with the US following Brexit.
The preliminary steps towards a UK/US trade deal are currently being taken. Secretary of State for International Trade Liam Fox MP has recently opened preliminary discussions with US officials to consider potential opportunities and risks for the negotiations. Much press emphasis has been placed on chlorine-washed chicken, but there are a host of other regulatory divergences that could undermine UK food standards.
The report warns that a range of products produced under lower safety and welfare standards than those in force either in Britain or the EU could pose a risk to both animal AND human health, as well as damaging British agriculture’s integrity and viability.
Some of the key differences between UK and US production – hormone-treated beef, GM crops and chlorinated chicken – are becoming increasingly understood by British consumers.
The report highlights a number of other areas where products imported from the US could be produced under significantly different standards to our own: this includes the inclusion of food colourants that have been withdrawn from the UK, the use of the herbicide Atrazine that has previously been linked with human health risks, and the sale of chicken litter as animal feed which was banned by the EU in 2001.
The US Food and Drug Administration (FDA) allows a number of steroid hormone drugs for use in beef production. Cattle producers use hormones because they allow animals to grow larger more quickly on less feed, thus reducing production costs. Hormone treated beef has been banned in the EU since 1989. The 2003 EU scientific review concluded that the hormone estradiol-17β was carcinogenic. The US imposed retaliatory tariffs, which were removed when the EU agreed to allow non-hormone treated beef from the US access to EU markets. President Trump re-imposed the tariffs last year.
In the US, chicken litter (a rendered down mix of chicken manure, dead chickens, feathers and spilled feed) is marketed as a cheap feed product, particularly for cattle. The cost of chicken litter is lower than corn and soy due to the high levels of industrial broiler chicken production in the US. In the US, the use of poultry litter in cattle feed is unrestricted. The use of chicken litter has been banned in the EU since 2001 following the outbreak of foot and mouth disease and BSE. These diseases were attributed to the inclusion of animal protein in industrial animal feed.
Atrazine is estimated to be the second most heavily used herbicide in the US with 73.7 million pounds used in 2013.
It was applied on more than half of all corn crops, and up to 90 percent of sugar cane. Atrazine is a potent endocrine disruptor and reduces immune function in both wildlife and laboratory rodents. The chemical has also been found to possibly induce breast and prostate cancer. Despite these findings, the EPA still allows its use in US agriculture.
The EU banned atrazine due to its public health risks and its polluting impact on waterways.
In the United States, products that include Yellow 5 and 6, Red 3 and 40, Blue 1 and 2, Green 3 and Orange B are available for purchase and do not require labelling. In 2008, these artificial colourings were taken off the UK market due to health concerns. The UK banned these food dyes following a 2007 double-blind study, which found that eating artificially coloured food appeared to increase children’s hyperactivity. While banned in the UK, the EU requires mandatory warning on foods that include these colourants.
Honor Eldridge, Policy Officer at the Soil Association, said: “British farming has a reputation for high food safety and high animal welfare. It is imperative that any future trade deal does not result in a dilution of these standards for consumers. Nor should any deal competitively disadvantage UK farmers.
“We welcome Michael Gove’s assertion that the UK should not race to the bottom in competing with cheap imports, as well as his commitment to supporting environmentally-friendly farming practice. If the UK Government is to achieve its goal of improving and strengthening our food standards, future trade agreements must reflect these commitments. To this end, any future trade negotiations must be conducted transparently and with input from public stakeholders.”
Quite how far that meshes with Liam Fox’s urge to deregulate and open up global markets for the UK by sacrificing public and industry protections remains to be seen.
Levy Bodies Announce £2 million Programme
THE RED meat levy bodies in England, Scotland and Wales have announced a major programme of joint activities to be paid for by a ring-fenced fund of £2 million of AHDB red meat levies.
An agreement by the Agriculture and Horticulture Development Board (AHDB), Hybu Cig Cymru, (HCC) and Quality Meat Scotland (QMS) will see a range of activity delivered in a three-way collaboration starting in 2018.
This has been developed as an interim arrangement while a long-term solution is sought on the issue of levies being collected at point of slaughter in England for animals which have been reared in Scotland or Wales.
The three organisations share an immediate joint commitment to collaborating to ensure levy payers across Great Britain benefit from the activities delivered using the £2 million ring-fenced fund.
The agreement announced today (06 February 2018) follows 12 months of talks between the three bodies after the parameters of the fund were set out by Ministers early in 2017.
This established that AHDB would set aside a ring-fenced sum of £2 million to support a programme of activities benefitting cattle, sheep and pig levy payers in Scotland, Wales and England.
Jane King, Chief Executive of AHDB, says: “The three GB levy bodies share many challenges and the simple fact is we can more effectively address them through working together.
“Though we already work closely with our colleagues in HCC and QMS on various projects, this new arrangement will take our collaboration to a whole new level with all three organisations deciding jointly how we will invest this fund to make the biggest impact for the red meat sectors.”
Gwyn Howells, Chief Executive of HCC, said: “Addressing the issue of the loss of levy income to the Welsh red meat industry has been long awaited. While a permanent solution will require legislation, this interim arrangement will allow greater value for money and accountability for Welsh levy-payers.”
“We look forward to working together with our colleagues in Scotland and England on important programmes of joint activity in areas such as overseas market access, research, and communicating the health benefits of red meat within a balanced diet.”
Alan Clarke, Chief Executive of QMS, said: “It is encouraging that progress has been made and that recognition has been given to the movement of livestock around GB and the impact this has on each of the levy bodies.
“The priority now is to ensure we maximise the benefit to levy payers of the activities delivered from the ring-fenced fund. This collaboration gives us the opportunity to take a joined-up approach to issues that affect the industry, regardless of geography.”
The levy bodies have agreed that effective from the financial year 2018/19 the new joint fund will focus on five priority areas:
- International shows and export events
- Market access
- Brexit preparation
- Meat and health, animal health and environment
The ring-fenced fund will boost the international presence and access for meat from Britain in key overseas markets with particular focus on preparing the red meat sector for the potential challenges and opportunities that are likely to follow Brexit.
In the meat and health, animal health and environment category the three organisations will concentrate on collaborating on positive messaging to counteract negative messages, while work on antimicrobial resistance is expected to dominate the research investment.
Hard Brexit threat to west Wales’ farmers
BREXIT threatens major upheaval for Welsh agriculture, with small upland farms particularly threatened.
A report from the Public Policy Institute for Wales (PPIW) suggests that there is a massive risk to west and north Wales.
LIVESTOCK FARMING THREATENED
Its analysis suggests that the most likely changes in trading conditions would tend to disadvantage the competitive position of Welsh agriculture in its main current markets and trading competitors (particularly in sheep and beef).
The report also anticipates generally reduced levels and scope of public funding by comparison with those the sector has enjoyed in recent years.
However, within these challenging probable change scenarios, there are opportunities if farm businesses are enabled to respond adaptively.
Some farms and sectors face much greater challenges than others, which implies uneven structural change across significant areas
- a decline in the economic viability of sheep production is likely, with these farm businesses especially vulnerable to changes in both market access arrangements and public funding support – this could increase pressure on rural services;
- accordingly, north and west Wales are likely to face stronger negative impacts than the south and east, where more potentially positive and diverse impacts can be expected among dairy, horticultural, mixed and other farm types.
MARKET RESPONSE UNCERTAIN
How key food and forestry processors and retailers respond to the Brexit process, and their willingness to invest in Wales and Welsh products, will be an important factor. Their patterns of operation may change in response to shifting economic and market conditions.
Managing the challenges faced is key, to prevent undesirable impacts on natural capital, landscape quality and community identity.
Three policy directions are recommended:
- Fostering resilience in farm and other land management businesses; supporting successful adaptation, enhanced efficiency, diversification, adding value and intergenerational transfer, as well as some moves from farming into other sectors;
- Investing in longer-term partnerships between government, food retailers, rural service providers, and commercial lenders to promote stronger business networks and SME infrastructure across Wales;
- Designing a future funding framework to support natural resource management and rural vitality in Wales.
THINK OUTSIDE THE BOX
Report author Prof Janet Dwyer, from the University of Gloucester, argued that while farming only employs a relatively small proportion of people directly, its success has a ripple effect across rural communities.
“People need to be more willing to think outside the box, to think about working together, think about understanding the way in which one person‘s business affects what other people do because farming affects the landscape, which affects tourism, which is an important sector in Wales, so a lot of these things are connected,” she said.
The CCRI Director and Professor of Rural Policy makes a number of recommendations to overcome these potential challenges. These include investing in better business planning and adjustment; careful succession planning for farms and small rural businesses; and policies to strengthen health and social services for those in the most remote areas.
“Conducting the work made me more aware of the importance of thinking ahead and planning for continued uncertainty, whatever the eventual political and economic outcomes of Brexit” said Professor Dwyer.
A Welsh Government spokeswoman said it welcomed the report, saying it highlighted the possible impact of Brexit not just on trade and markets but on people‘s lives.
“However, Brexit also presents the opportunity to put in place new Welsh policy frameworks to help them adjust and thrive,” she said.
“We recognise that many of these changes will impact businesses in different ways and agree the best approach will be on an individual business level.”
She said they have already begun work to develop “sector readiness” programmes to support businesses to prepare for the change.
“We continue to press the UK government on the need for a multi-year transition period to enable all businesses to prepare and for clarity on the level of funding that Wales will receive after Brexit.”
Responding to the report’s findings, Paul Davies AM, Welsh Conservative Shadow Secretary for Rural Affairs, said: “We note with interest the recommendations of the report.
“Following our departure from the EU, more powers over agriculture will be transferred to the Assembly. “The Welsh Government now needs to focus on ensuring that they listen to rural communities and that they actually devolve power to people living in the countryside.”
Mr Davies view of ‘more powers’ being transferred to Wales does not appear to reflect the views of many Conservative Brexit enthusiasts within the UK Parliament, including David TC Davies, who chairs the Welsh Affairs Select Committee and David Jones, the former Secretary of State for Wales, whose appearance in Cardiff this week as a member of the Public Administration and Constitutional Affairs Committee was noticeable for his equivocal approach to the transfer of powers in areas of existing competence back to the Assembly after Brexit.
HARD BREXIT’S SEVERE IMPACT
The report’s publication coincided with the release of the Welsh Government’s own Brexit trade paper, supported by an economic impact analysis from Cardiff Business School, argues the Welsh economy is best protected by retaining full access to the European Single Market and membership of a customs union.
The paper sets out the severe impact a hard Brexit would have on Welsh jobs and the economy. If the UK were to move to World Trade Organisation (WTO) rules, the Welsh economy could shrink by 8% – 10%, which would be the equivalent of between £1,500 and £2,000 per person in Wales.
The trade paper calls on the UK government to provide evidence of how new trade deals would replace the benefits of access to the EU. The Welsh Government also wants decisions on new trading relationships with the EU and the wider world to be taken in partnership with devolved administrations to fully reflect the interests of all parts of the UK.
Launching the document, the First Minister said: “Welsh exports are worth £14.6bn each year, with 61% of Welsh exports and just under half of our imports going to and from the EU. Wales is currently attracting record levels of inward investment, which is largely due to our access to the EU’s 500m customers.
“As our trade paper highlights, moving to WTO rules and the imposition of tariffs could have a catastrophic impact on our lamb sector and on the Welsh shellfish industry, which currently exports around 90% of their produce to the EU.
“These hard facts underline what is at stake if the UK government fails to get the right deal for the UK or we crash out of the EU without one. Leaving the Single Market and the Customs Unions would be hugely damaging for Welsh businesses and jobs, with our agricultural, food producers and automotive sectors being particularly hard hit.
“I urge the UK government to give serious consideration to our proposals and work with us to develop a post-Brexit trade policy which protects Welsh jobs and the economy.”
NFU WELCOMES WG PAPER
Commenting on the document, NFU Cymru President Mr John Davies said: “As the paper rightly acknowledges, the decisions that will be taken about the UK’s future trading relationships with the EU27 and the rest of the world will be significant factors shaping our future prosperity. In my view, nowhere is this more true than in relation to agriculture, with around a third of our lamb crop and around three quarters of Welsh food and drink exports destined for the European market.
“Trade has consistently emerged as a top priority for our members during the Brexit negotiations. As far as I am concerned our future trading relationship must be one which gives us the full and unfettered access to the Single Market that we need, and I welcome the fact that the Welsh Government has made this call once again in today’s policy paper.
“The imposition of tariffs, under a no-deal scenario would impact lamb exports in particular, and under WTO rates chilled lamb carcasses would attract effective tariff rates as high as 46%, effectively shutting us out of European markets.
“Whilst there has been much talk of tariff barriers and the detrimental impact that they can have on trade, I was pleased to see the policy document making extensive references to the negative impact that non-tariff barriers can have on trade, particularly in relation to exports of food. When it comes to food and agricultural produce in particular, non-tariff barriers such as inspections at border posts in order to demonstrate compliance with technical regulations and standards, rule of origin, hygiene, veterinary and phytosanitary controls are all factors which increase costs and hinder trade.
“The paper also rightly acknowledges the damaging impact that the lack of clarity on future trade arrangements with the EU is having for business and nowhere is this truer than in agriculture where production cycles can often span a number of years. That is why we cannot wait much longer for an outline of what our future trading relationship with the EU27 is going to look like, if our members are to start planning for the future.”
Mr Davies concluded: “Although Brexit may well eventually give the UK the freedom to strike its own trade agreements with third countries other than the EU27, speaking as a Welsh farmer, the immediate priority for the UK Government has to be on securing a trade agreement with the EU27 that is free from tariff and non-tariff barriers, and encompasses all sectors including agriculture.”
TFA call for tax reform
THE TENANT Farmers Association (TFA) is encouraging the Government to couple fiscal and legislative reform in its forthcoming plans for changes to agricultural tenancies.
TFA Chief Executive George Dunn said “We are pleased that the Government has signalled its intention to bring forward much needed reform to the legal and policy frameworks surrounding agricultural tenancies, but it must not miss the opportunity to reform the taxation environment within which agricultural tenancies operate. Tax is a major driver in the land market and for the decisions land owners make about land occupation. Significant, positive change can be achieved with a small number of sensible tax reforms”.
The top three tax changes the TFA would like to see are:
- Restricting Agricultural Property Relief from Inheritance Tax on let land only to land let for 10 years or more.
- Abolishing Capital Gains Tax rollover relief for new land purchases but extending relief to investments in fixed equipment on let land.
- Abolishing Stamp Duty Land Tax (SDLT) on agricultural tenancies.
“Whilst some are calling for the abolition of Inheritance Tax Relief on farm land, this would be a mistake. History shows this simply leads to unnecessary estate fragmentation and negative restructuring. Instead, we should promote best practice by restricting the relief to land let on the most secure tenancies – those of 10 years or more. There are too many short term farm tenancies which stifle investment, good soil and environmental management and farm business resilience. Promoting longer term tenancies will benefit us all,” said Mr Dunn.
“A major driver of inflation in the land market in recent years has been the availability of Capital Gains Tax rollover relief. Individuals who have made sizeable capital gains elsewhere in the economy have been drawn into the land market as a safe, tax efficient investment driving up its price to unsustainable levels. This has got to stop,” said Mr Dunn.
“The TFA would like to see the abolition of Capital Gains Tax rollover relief for land purchases, with exceptions for those who have lost land through compulsory purchase. Instead, there should be a new relief for investments into fixed equipment on to let land which will assist its productivity, resilience and sustainability,” said Mr Dunn.
“In the farming context SDLT makes no sense at all. This tax penalises longer tenancies but these are exactly what we need in farming. SDLT might make sense in the commercial sector where large corporations seek to avoid tax by using long leases with developers but it has no place in the farming world and should be abolished,” said Mr Dunn.
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