The UK minister with responsibility for agriculture warned the Oxford Farming Conference this week that a no-deal Brexit would bring “considerable turbulence” to farming in the UK. Similarly, National Farmers Union (NFU) president Minette Batters warned that the cost of WTO tariffs would effectively end UK exports to the EU, which would particularly damage the sheepmeat sector and remove its ability to export.
WTO trade
Of course, the UK is an importer of 40% of its food, though for the highest WTO tariff products, such as beef and cheese the figure is more like 20%. A WTO tariff on UK imports would make Irish exports to the UK prohibitively expensive and drive rapid food price inflation, something that would be politically unacceptable in the aftermath of Brexit.
Securing employees is already a major issue for the processing industry even before Brexit takes place
Another option for the UK would be to throw open its market to tariff-free imports. While much of the focus to this point from an Irish perspective has been the impact of WTO tariff rates making the cost of Irish agricultural produce in the UK prohibitive, the complete removal of a tariff wall would be equally disastrous. Irish produce is currently the import of choice across the meat, dairy and horticulture sector, sharing similar production methods and values to UK-produced product.
Impact of no tariff barrier
However, if the UK decided unilaterally to remove tariff barriers on imports of agricultural products, the impact would be equally severe on Irish exports as a much cheaper alternative would be available. The big difference would be the impact on UK farmers. If the UK decided to go with full WTO tariffs, Irish supplies would be priced out of the market and prices of domestic production would surge because of scarcity. However, if tariff barriers were completely removed, cheap imports would devalue domestic production to a huge extent.
UK produce has traditionally enjoyed a premium over Irish imports, which reached as high as €1/kg in late 2015. No doubt, UK domestic produce would continue to command a premium in the UK market. The problem for British farmers is that this premium would be on top of a much lower base.
British agri exports
On exports, the big impact for British farmers will be on its sheepmeat sector. The UK is the third biggest exporter of sheepmeat in the world after Australia and New Zealand which account for 70% of global exports between them. In 2018, the UK is forecast to have shipped 82,500t of sheepmeat, all of it to mainland Europe. For farmers in Northern Ireland, 400,000 live lambs and sheep, half of total production, are exported across the border every year for processing. The UK is engaged in dairy and beef exports, especially for parts of the carcase not consumed in the UK, and while not having access to the EU would be an issue, it would be nowhere as big a problem as it would be for the sheepmeat sector.
Labour
While Irish farmers and factories have had labour supply issues in recent times, access to labour is an even bigger issue in Britain and indeed Northern Ireland. In many meat factories, migrant labour, predominantly from the EU, makes up between half and three-quarters of the workforce. Securing employees is already a major issue for the processing industry even before Brexit takes place. Brexit isn’t exclusively the problem, as many eastern EU workers are choosing to return home as their economies develop and the weakness of sterling since the referendum means that the money being sent backs isn’t worth as much as it was previously.
NFU president Minette Batters speaking at the 2019 Oxford Farming Conference.
Labour is also an issue in the road transport industry and on fruit and vegetable producing farms in Britain where there is a high labour element in harvesting. Traditionally this has come on a seasonal basis from the continent but in 2018 farmers struggled to get sufficient workers for the harvest and there is great concern for 2019 with Brexit looming.
Support for agriculture
Aside from labour, the other concern for British farmers is what shape support for the sector will take and what will replace the common agricultural policy (CAP). Devolved institutions will have considerable flexibility but there has to be a common UK policy to prevent one region getting priority over another. Within England, the focus is very much on the environment and public goods with little interest in supporting productive farming.
Irish farmers and the agri-food industry are seriously threatened by a no-deal Brexit, but the mood at the Oxford Farming conference this week suggests that many UK farmers recognise that the threat to them is every bit as great. There will be no winners in agriculture in either post-Brexit Britain or indeed the EU.
Read more
Time for clarity on plans for no-deal Brexit
Mixed thoughts on Brexit’s impact on UK farming at Oxford
The UK minister with responsibility for agriculture warned the Oxford Farming Conference this week that a no-deal Brexit would bring “considerable turbulence” to farming in the UK. Similarly, National Farmers Union (NFU) president Minette Batters warned that the cost of WTO tariffs would effectively end UK exports to the EU, which would particularly damage the sheepmeat sector and remove its ability to export.
WTO trade
Of course, the UK is an importer of 40% of its food, though for the highest WTO tariff products, such as beef and cheese the figure is more like 20%. A WTO tariff on UK imports would make Irish exports to the UK prohibitively expensive and drive rapid food price inflation, something that would be politically unacceptable in the aftermath of Brexit.
Securing employees is already a major issue for the processing industry even before Brexit takes place
Another option for the UK would be to throw open its market to tariff-free imports. While much of the focus to this point from an Irish perspective has been the impact of WTO tariff rates making the cost of Irish agricultural produce in the UK prohibitive, the complete removal of a tariff wall would be equally disastrous. Irish produce is currently the import of choice across the meat, dairy and horticulture sector, sharing similar production methods and values to UK-produced product.
Impact of no tariff barrier
However, if the UK decided unilaterally to remove tariff barriers on imports of agricultural products, the impact would be equally severe on Irish exports as a much cheaper alternative would be available. The big difference would be the impact on UK farmers. If the UK decided to go with full WTO tariffs, Irish supplies would be priced out of the market and prices of domestic production would surge because of scarcity. However, if tariff barriers were completely removed, cheap imports would devalue domestic production to a huge extent.
UK produce has traditionally enjoyed a premium over Irish imports, which reached as high as €1/kg in late 2015. No doubt, UK domestic produce would continue to command a premium in the UK market. The problem for British farmers is that this premium would be on top of a much lower base.
British agri exports
On exports, the big impact for British farmers will be on its sheepmeat sector. The UK is the third biggest exporter of sheepmeat in the world after Australia and New Zealand which account for 70% of global exports between them. In 2018, the UK is forecast to have shipped 82,500t of sheepmeat, all of it to mainland Europe. For farmers in Northern Ireland, 400,000 live lambs and sheep, half of total production, are exported across the border every year for processing. The UK is engaged in dairy and beef exports, especially for parts of the carcase not consumed in the UK, and while not having access to the EU would be an issue, it would be nowhere as big a problem as it would be for the sheepmeat sector.
Labour
While Irish farmers and factories have had labour supply issues in recent times, access to labour is an even bigger issue in Britain and indeed Northern Ireland. In many meat factories, migrant labour, predominantly from the EU, makes up between half and three-quarters of the workforce. Securing employees is already a major issue for the processing industry even before Brexit takes place. Brexit isn’t exclusively the problem, as many eastern EU workers are choosing to return home as their economies develop and the weakness of sterling since the referendum means that the money being sent backs isn’t worth as much as it was previously.
NFU president Minette Batters speaking at the 2019 Oxford Farming Conference.
Labour is also an issue in the road transport industry and on fruit and vegetable producing farms in Britain where there is a high labour element in harvesting. Traditionally this has come on a seasonal basis from the continent but in 2018 farmers struggled to get sufficient workers for the harvest and there is great concern for 2019 with Brexit looming.
Support for agriculture
Aside from labour, the other concern for British farmers is what shape support for the sector will take and what will replace the common agricultural policy (CAP). Devolved institutions will have considerable flexibility but there has to be a common UK policy to prevent one region getting priority over another. Within England, the focus is very much on the environment and public goods with little interest in supporting productive farming.
Irish farmers and the agri-food industry are seriously threatened by a no-deal Brexit, but the mood at the Oxford Farming conference this week suggests that many UK farmers recognise that the threat to them is every bit as great. There will be no winners in agriculture in either post-Brexit Britain or indeed the EU.
Read more
Time for clarity on plans for no-deal Brexit
Mixed thoughts on Brexit’s impact on UK farming at Oxford
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