Three ways Brexit risks the UK’s agricultural & food sector
The agriculture and food sector faces “enormous challenges” over Brexit. Not only would “no deal” render the UK industry uncompetitive, it would face worsening labour shortages and uncertainty about future funding and policy.
A new report from a House of Lords sub-committee has warned that the UK’s agricultural and food sectors could be hit three ways by Brexit. Giving evidence to the committee, National Farmers Union (NFU) president Guy Smith said the immediate challenges faced by the industry broadly fell into “trade, labour and policy or support”. Ian Wright, the director general of the Food and Drink Federation (FDF) similarly said “the three key parts of the Brexit decision that are the most challenging are the labour market, regulatory framework and the future of tariffs and trade”.
No deal risks trade and risks standards
Highlighting just how disastrous the prime minister’s position that “leaving with no deal is better than a bad deal”, the committee heard that a “no deal” scenario would result in high tariffs and restrictive non-tariff barriers that would drastically reduce trade with our biggest trading partner. The agricultural sector faces some of the highest tariffs for trade with the EU under WTO rules, which would simply make British businesses uncompetitive.
Farmers risk high tariffs and non-tariff barriers on exports, which would render their business uncompetitive, while simultaneously having to adjust to a new UK policy for funding.
Brexit: agriculture, House of Lords EU committee
That’s trade with the EU. As for trade to the rest of the world under Theresa May’s “Global Britain”, the report warned of the government’s “mixed messages” to the agriculture sector. It said the government’s “vision for the UK as a leading free-trade nation with low tariff barriers to the outside world does not sit easily with its declared commitment to high quality and welfare standards in the UK farming sector”.
The terms of future free trade agreements will affect or limit domestic policies on regulation, funding and farming standards, while those policies may in turn determine which countries UK products can be sold to.
Brexit: agriculture, House of Lords EU committee
It’s a stark reminder that as a member of the EU, the food we produce and the food we eat complies with high quality and safety standards. So whilst agreeing new trade deals with other countries outside of the EU may be simpler once we leave the trading bloc, we’ll have less clout and therefore potentially be more willing to reduce our standards on quality and safety just to get a deal. This is perhaps best demonstrated with the possible consequences of a UK-USA trade deal as reported in this piece in the Guardian. The House of Lords report further argues that an “influx of cheaper products produced to lower standards” would also make UK producers less competitive at home.
And then there’s the fact that “no deal” doesn’t just mean we leave with no trade deal with the EU. We also leave with no trade deal with anybody else and no prospect of agreeing one anytime quickly. Countries including the USA, Australia and Japan have already said a trade deal with the UK is not a priority.
Labour shortages would be made worse by loss of free movement
The agricultural and food sectors are hugely reliant on EU labour and any loss will lead to both the agriculture and food sectors facing “severe difficulties”. The committee noted the significance of free movement in making EU labour easily accessible and it heard that even before the UK loses free movement, the industry was already facing labour shortages. And since the referendum, the committee also heard that the weakened pound and increase in xenophobic sentiment was encouraging people to “return home”.
There are certain parts of the country where we are seeing pretty repugnant xenophobia, which is also encouraging people not to feel welcome and return home. We have a problem now with labour.
George Dunn, Tenant Farmers Association
It’s a damning statement on “Global Britain” and the mixed messages Brexit gives. Britain says that it is open to the world but still hasn’t secured the rights of those EU nationals who work here and made a life here.
The report recommended the government recognise the skills brought by the many workers in the agricultural sector. It said that whilst often regarded as “unskilled”, many of the workers are “extremely skilled at sector-specific tasks”. The committee further concluded that the “entire food supply chain” was “adversely affected” by any loss to the EU labour pool.
Not enough time to replace existing support and regulatory framework
The committee acknowledged that whilst there are opportunities in Britain leaving the EU’s Common Agricultural Policy, there simply is not enough timer the UK to review, develop and implement new policies to take its place. So not only could the industry face high tariffs and non-tariff barriers, they also face uncertainty over funding that the EU currently provides as well as the regulatory framework it operates in. The report said “it is therefore essential that the government should agree transitional arrangements with the EU, in order to mitigate the potentially disastrous effects of trading on WTO terms on the agricultural and food sectors”. It added that “transitional arrangements will be critical to the long-term success of UK farming”.
You can see the full report at publications.parliament.uk.