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.”
Economic value of red meat sector rises
HE VALUE of the iconic beef, lamb and pork sectors to the Welsh economy rose in 2020, as consumers turned to local, sustainable, quality food during the COVID pandemic, according to analysis by Hybu Cig Cymru – Meat Promotion Wales (HCC).New figures from the Welsh Government ‘Aggregate Agricultural Output and Income’ report show that the total value of agricultural output in Wales for 2020 is projected to stand at £1.7billion – a 6.2% (or £99 million) increase on the provisional figure for 2019.
Cattle and sheep account for 44% of this total at £750million; the highest proportion recorded since 2016. The agricultural output value for Wales’s pig sector also increased (by 34.3% or £2 million) to a value of £8 million.
The figures reflect the strength of the livestock sector in Wales and sit in contrast to Total Income From Farming (TIFF) figures for the UK as a whole newly released by Defra. Although the TIFF figures are a different form of measuring farm production, the UK data concurs that the livestock sector has had a strong year, but in other parts of Britain, this was more than offset by poor harvests in the arable sector.
Demand for beef and lamb have been strong in the domestic retail market since the immediate aftermath of the first COVID lockdown in spring 2020. After initial market volatility, marketing campaigns by HCC and other bodies encouraged consumers to recreate restaurant meals at home.
Over the past 12 months, domestic retail sales of lamb and beef have trended consistently higher, with spending on lamb 20% higher than the previous year. Sales at independent high street butchers are also strong.
Research shows many demographic groups, including families with children, buying more beef and lamb than previously, and turning to quality home-grown produce.
HCC Data Analyst Glesni Phillips said, “The strong demand for red meat from the domestic consumer has helped drive market prices for beef and lamb at Welsh livestock markets in the second half of 2020 and into the early months of 2021.
“It’s no surprise, therefore, to see that the overall value of the industry is projected to have grown. We have seen inflation in the costs on farmers, which offset some of the gains from improved market price; however, it’s heartening to see consumers’ support for quality Welsh produce.“Welsh Lamb and Welsh Beef remain key drivers of our rural economy, and given their excellent brand reputation, they act as flagship products for the growing Welsh food and drink sector.”Further analysis of the aggregate output and income figures for Welsh farms are available in HCC’s latest monthly market bulletin.
Ian Rickman: 2021 is a critical year for Wales’ farming future
THE INCREASINGLY negative narrative around livestock farming and its portrayed impact on the environment and climate change has led to farmers in Wales standing up to tell their stories and highlight the positive impact livestock farming has.
Through the Farmers’ Union of Wales’ campaign ‘Guardians of the Welsh Land’, farmers are addressing misleading claims by various groups about the role livestock farming plays in relation to climate change and the environment. Launching the campaign, FUW Deputy President Ian Rickman said: “The FUW has consistently recognised the threat represented by climate change and the need to take action. This is clear from a cursory look at our manifestos and policy documents published over the past twenty years.
“We know that farming is already responsible for a critical carbon resource in soils, woodland and semi-natural habitats and I’m pleased to launch the FUW’s environment campaign – ‘Guardians of the Welsh Land’ from my home farm here in Carmarthenshire today. As farmers are the most trusted link in the supply chain, they are best placed to communicate their stories, helping to address consumer concerns and influencing political agendas. Members can also look forward to a variety of webinars over the coming months, which will focus on the different challenges ahead for the industry and how to overcome them.
“There is no question in our mind that we need to counteract the continuation by the anti-farming lobby of their campaign to vilify and belittle domestic food producers. These attacks are corrosive and grossly misleading, negatively influencing consumer perception of the industry and influencing political agendas on a global scale.”
Mr Rickman added that 2021 is an important year for these types of conversations.
“Knocking on our door are the United Nations Food Systems Summit and COP26. The FUW has been engaging with these conversations at an international level and shares some concerns with other industries across the globe about the wider narrative and ambitions set out in inconspicuous looking documents. Plans, we and the general public don’t support. Telling the positive story of the guardians of our Welsh land is now more important than ever,” he said.
Starting in the first week of June, the campaign introduces four farmers all of whom tell the story of how they are addressing environmental and climate change needs in their unique ways: Carmarthenshire organic sheep farmer Phil Jones, the Roberts family from Meirionnydd, Ceredigion dairy farmers Lyn and Lowri Thomas and FUW President Glyn Roberts who farms with his daughter Beca at Dylasau Uchaf in Snowdonia.
“The campaign will further highlight that Welsh farmers are rising to the challenge of improving soil health and increasing organic matter in soils, improvements which represent further opportunities for sequestering more carbon. These improvements, the campaign will highlight, are achieved through specific livestock grazing patterns and rest periods. The campaign is also clear that the correct options, guidance and rewards are required to encourage more farmers to adopt such systems,” said Mr Rickman.
Soil, the campaign will stress, is a long term investment and at present, around 410 million tonnes of carbon is stored in Welsh soils and 75,700 hectares of Wales’ woodland (25%) is on farmland, representing an important and growing carbon sink.
“As acknowledged in Natural Resources Wales’ State of Natural Resources Report, using land for food production is an essential part of natural resource use and management. Whilst we acknowledge that agricultural intensification has undeniably had negative impacts on some species and ecosystems, there is overwhelming evidence that other factors, including reductions in agricultural activity and afforestation, have also had severe negative impacts,” he added.
Excellent Easter for lamb sales
Lamb proved a popular choice for consumers over Easter with retail sales soaring above the last two years. This demand has been reflected at livestock markets where farmgate prices are still standing strong.
At a time when lamb is always a firm favourite, this year people of all ages were both buying and spending more as a result of a renewed interest in sourcing quality, local produce and cooking at home.
In the 12 weeks to 18 April 2021, the total volume purchased was up 14.8% on the year, and 6.0% higher than in 2019. Consumer spend on lamb reached £190.0 million, which was 18.7% more than in 2020 and 14.6% higher than the same period in 2019.
Lamb leg roasting joints were the most sought-after cuts despite the fact that Covid-19 restrictions on large gatherings remained, followed by chops and mince.
Hybu Cig Cymru – Meat Promotion Wales’ (HCC) Data Analyst, Glesni Phillips said: “Lamb performed exceptionally well over the Easter period this year. It saw a 10.2% increase in the number of buyers engaging with the product and a rise of 3.3% in the frequency of which lamb was bought.
“The average price of lamb was also higher, but this obviously did not deter new buyers. The figures show that there are new buyers in all age categories, but this is especially true for shoppers aged under 45 years and those with children.
“The pandemic has led to more consumers cooking at home, giving many the opportunity to realise and enjoy the exceptional qualities and versatility of Welsh Lamb, and at the same time, support the local economy.”
Butchers also benefitted from the popularity of lamb in the run-up to Easter with total spend increasing by 16.1% on the year. The volume sold also increased, by 12.6%.
Glesni Phillips added: “As we approach the end of Spring, the consumer demand for lamb is continuing. This can be seen in the liveweight lamb prices which remain strong when compared to historical averages, with the average SQQ in Wales standing at 329.7p/kg in Wales for the week ending 15 May 2021.
“New season lambs are now entering the market – they accounted for over 70% of lambs at auction in Wales during the latest week – but the supply is still relatively tight. HCC is looking forward to working with retailers over the coming months on new activity, which will include in-store marketing, press and targeted digital communication to maintain this growth in sales. Butchers, who demonstrated their key role in the community during the pandemic, will also be offered training on a number of key skills to boost their sales even further.”
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