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Analysis

Brexiters should be sheepish over risk to farmers

by Nick Kent | 03.05.2017

In the rush towards Brexit one of the parts of our society that has been largely ignored is agriculture, yet farmers and their communities could be some of the biggest losers.  They depend heavily on EU farm subsidies that are not guaranteed beyond 2020, and most of their exports go to the 27 other member states.  Demands from some of the Leavers for radical new trade policies could damage farming even further.

The first detailed analysis of what could happen to food and farming after Brexit has been published by the House of Lords EU Select Committee.  It highlights three big issues facing the sector after Brexit: market access, labour, and the regulatory framework.  In each area the UK faces considerable risks and uncertainty.  

The food and farming sector is worth £108 billion a year to the British economy and it employs 800,000 people.  Eighty per cent of the sector’s exports go to the rest of the EU, and leaving the single market means that our food exports will face import taxes and other obstacles.  It won’t be easy to find alternative markets for our goods.  It is true that our food imports from the EU will give us some leverage in the negotiations, but we face other problems that limit our room for manoeuvre.

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About half of farmers’ incomes in the UK come from subsidies, but it is a far greater share in Northern Ireland (87%) and in Scotland (75%).  It also varies by sector, with hill farmers particularly dependent on state aid.  That financial support maintains the landscape of rural Britain as well as guaranteeing rural employment and food supplies.  Leaving the EU doesn’t mean that we should stop subsidising agriculture: other countries such as Switzerland, Norway and the US support their farmers too.  If we cut subsidies too sharply, food prices will rise at home and our exports will swiftly become uncompetitive.  

The Leavers have consistently claimed that Brexit means lower food prices.  Outside the EU, they say we will be able to throw off the straitjacket of the Common Agricultural Policy (CAP), slash red tape and do free trade deals with non-EU suppliers – which will mean cheaper food.  Today’s report reveals the hollowness of those claims.  It’s much more complicated than that.  

If we allow cheap food imports from non-EU countries, such as New Zealand lamb or Argentine beef, prices would fall in the shops, at least at first.  But British farmers would lose business very quickly when they find they cannot compete with the cheaper production costs in those countries.  And consumers might not be happy to buy beef with hormones in it, or replace fresh Welsh lamb with frozen meat from New Zealand.  

The difficulties facing our farmers are yet another example of the risks posed by the lemming-like rush of the Leavers towards a hard Brexit.  Ministers are confused about what they want – a trade free-for-all or a strong farming sector.  They will quickly find out that they can’t have them both.

Edited by Quentin Peel

One Response to “Brexiters should be sheepish over risk to farmers”

  • Liam Fox is willing to do a post-brexit deal with the Trump administration allowing the import of cheap chorine bleached chickens into Britain. Not only are many concerned with eating meat treated in this fashion, such chickens are considerably cheaper than British reared birds.

    God alone knows the full effect and negative impact on the British poultry industry! And what happens when we also see Beef, Lamb and Pork farmers going to the wall? Without state subsidies post 2020, Britain will be even more reliant on imported foods!

    Some taking back control that is!