I was delighted to be invited to Fortshot House Farm near Wike last week to meet with local farmer Peter Trickett and representatives of the National Farmers’ Union. We discussed a number of issues facing farmers in Yorkshire, with none more pressing than what Brexit could mean for them.
One of Mr Trickett’s main concerns was how a no-deal Brexit would affect his ability to sell his farm’s produce to the EU. UK farmers have benefited from tariff-free trade and barrier-free access to the European market for forty years and nearly two-thirds of our agricultural exports go to the EU. The introduction of Customs checks and tariffs for such trade would certainly not be welcomed by the majority of farmers in the UK.
Yet this is exactly what would happen if we leave without a deal. We would revert to trading under World Trade Organisation rules, under which farmers will face the EU’s full tariff wall on agricultural products, which are set at 35.4% on dairy and at 12.8% on cereals.
The recent publication of the government’s no-deal preparation notices has sparked concern among many farmers in Yorkshire and beyond. If the government fails to secure a deal before we become, in legal terms, a “third country” for the EU, then produce from UK farms will be unable to be sold at all to the EU until the UK has been certified as an “approved third-country supplier”. This will require an audit of all premises involved in the production and distribution of food by the Department for Environment, Food and Rural Affairs (Defra) and approval by the EU’s health and food safety unit. This process normally takes six to nine months and can only begin after the UK has left. The NFU have described this as effectively a six-month embargo on British agricultural products which would be an immediate economic hit for farmers and for some, could see the end of their business.
But even if there is a Brexit deal, much depends on what exactly is agreed for the future. Even a no-tariff free trade deal poses border check problems if we leave the Customs Union (because of WTO rules on verifying the origin of products). And if we also no longer apply the rules we previously agreed at EU level on sanitary and phytosanitary standards, on packaging and on labelling, then our products will no longer be automatically eligible, as they are now, for export to the EU market. They would be subject to compliance checks, and therefore an increase in costs and red tape due to additional paperwork. These additional costs would diminish our competitiveness in the European market, our main export market. Any border checks would increase transit times – for products with a short shelf life, such as milk and fresh meat, delays could be devastating if produce were to spoil before reaching the shops. Delays could also affect such things as spare parts for machinery, animal feed, pesticides, fertilizers and any number of products which have cross-border supply chains.
Farmers are right to be concerned.
Mr Trickett and the representatives of the NFU are rightly proud of the high standards we set in the UK for our production methods, environment schemes and animal welfare and the use of pesticides and fertilisers in accordance with EU legislation. If we were to disapply EU regulations and decisions on these (the EU European Environmental Agency has banned about 21,000 dangerous chemicals across the EU), and set divergent standards, there would be a number of risks. Our produce may no longer qualify for access to the EU market (or those of many countries across the world who follow the same standards as those set by the EU). The UK could become a dumping ground for cheaper but often dangerous pesticides and chemicals. We would have to duplicate much of the current regime of testing and inspections, creating additional costs and huge logistical and staffing challenges for the government. So we may instead choose to follow EU rules anyway. But if we are no longer a member, we’d have no say on them anymore. So much for “taking back control”!
Theresa May’s Chequers deal is seen as dead in the water by her own party and the EU has said that key parts of it are unworkable. There are other options.
- As we saw above, reverting to WTO rules would be the worst-case scenario and the most damaging to farming and our economy.
- A Canada style free-trade agreement would reduce tariffs for accessing the EU market and might reduce the problem of divergent regulations, but could also see an influx in cheap, lower quality products imported from around the world, undercutting our farmers.
- A Norway style membership of the wider European Economic Area could give farmers greater access to the European market, but the UK would no longer have a seat at the table to decide the policies and rules which directly impact upon the agricultural sector.
And despite the recent publication of an Agriculture Bill, none of these options solves the issue of how subsidies from the Common Agricultural Policy, which accounts on average for 55% of farmers income, will be replaced leaving farmers lacking the certainty they need. As a member of the EU, we benefit from access to agricultural subsidies, the free movement of labour (and the flexibility of seasonal labour is vital to ensure crops do not rot in the fields), high environmental and production standards and tariff free access to the largest single market in the world. The government’s current stance means losing most or even all of this.
Are they willing to sacrifice British agriculture in the name of an ideologically-driven hard Brexit, or will they see sense and recognise the benefits of the deal we already have?
I have written several other briefings about the impact of Brexit on agriculture and farmers, see the links below: