No deal could put more than 50% of UK farms out of business – new report launches ‘farmers for a people’s vote’

A new group was launched yesterday- ‘Farmers for a People’s Vote’ will represent the interests of UK farmers and the agricultural sector against the risks of Brexit, particularly a disastrous No Deal.

The group will be launched at a press conference at The Farmers Club in London, and will feature the publication of a new report by Dr SéanRickard, former chief economist of the National Farmers’ Union (NFU), detailing the devastating impact a disastrous No Deal would have on UK farmers and the agricultural sector. The report warns that No Deal could put over 50% of UK farms out of business.

The report is titled No Deal: The Door to the Decimation of UK Farming.

The launch was preceded by a small flock of sheep being herded past government buildings to highlight visually the risk Brexit presents to livestock.

The report finds that, in the case of No Deal:

  • The EU and all the countries with whom it has FTAs would immediately apply tariffs and Non-Tariff Barriers (NTBs) on food imports from the UK.
  • At the same time the Government has announced that it would, in the event of No Deal, remove tariff protection for most imports of agricultural and food products from the EU, although much reduced tariffs would continue to apply to most meat and dairy products.
  • Under WTO Most Favoured Nation rules the UK would be required to offer precisely the same tariff rates to third countries e.g. the US, Brazil and Australia. The introduction of tariffs on all British food exports to the EU and its FTA partners would render them uncompetitive.
  • Application of NTBs would not only involve increased administrative costs and border checks to ensure compliance with EU food safety and animal health regulations, but for many months, perhaps years, there could be an effective trade embargo on exports of animal-based products to the EU while the UK and the EU negotiated an agreement on equivalence status.
  • The combination of the removal of support payments – only a proportion will be made up by enhanced environmental payments – and an adverse trading environment will render the majority of farm businesses unviable. By the mid-2020s a large proportion of farm businesses – 50% or more is not an unreasonable estimate – recognising that they face an unprofitable future will decide to cease trading.

Dr Séan Rickard, former Chief Economist of the National Farmers’ Union (NFU), said: “The campaign to leave the EU was based on the idea that the UK would quickly secure a comprehensive new trading relationship with Europe and that leaving would have only positive impacts on UK farming. But today the reality looks very different. Boris Johnson has made it very clear that his over-riding priority as Prime Minister is to take the UK out of the EU by 31st October, if necessary with No Deal, no matter what the cost to the country’s economy and security.

“Many industries will suffer but the industry that would suffer the most serious economic shock will be agriculture. It is impossible to project the exact number of farmers who will go out of business. What we do know is that over 40% of them will have no net income if the basic payment is removed. If at the same time the Government removes all tariffs and so depresses prices, these two factors combined will render over 50% of farms in this country unviable. The possibility of any compensation from the government going anywhere near offsetting this is remote because so many promises have been made to so many other sectors and not all can be fulfilled.

“The agricultural sector in the UK faces significant challenges from No Deal, as tariffs and non-tariff barriers are erected to our exports at the same time as the UK Government lowers tariffs on imports from third country farmers. British farmers will be caught between increased competition from third countries importing produce to the UK, and increased difficulty and cost when exporting to our biggest market, the EU. Free Trade Agreements to reduce those barriers will take many years to negotiate. Coupled with the loss of the Basic Payment Scheme of support payments by 2022, the driving down of farm revenues means that more than half of farms could go out of business.”

Guto Bebb, Conservative MP for Aberconwy and a leading supporter of the People’s Vote campaign, said: “Farming is at the very heart of what makes this country great – to put that all at risk for the sake of pursuing a disastrous No Deal for which the public haven’t given their consent would be an outrage against democracy.

“I represent many farmers and agricultural workers in my constituency – they did not vote to put themselves out of work or to put their farms out of business, jeopardising their livelihoods. Many of them voted to leave the EU in good faith because people like Boris Johnson told them it would mean an improved trading relationship with the EU and a better future. The reality looks very different now.

“It would be a disgrace to democracy to impose No Deal on this country without the public having the final say, especially now that we know so much more about the consequences, particularly in the farming and agricultural sector as this new report highlights. The only way to resolve the Brexit crisis now is to call a People’s Vote and let the public decide for themselves where they want to go from here.”

 

 

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About The Author

John Swire - Deputy editor of Agronomist and Arable Farmer as well as responsibility for the Agronomist and Arable Farmer and Farm Business websites. After 17 years milking cows on the family farm John started writing about agriculture in 1998 and has since written for a variety of publications and has developed a wide circle of contacts within the industry. When not working John is a season ticket holder at Stoke City and also of late has become a fitness freak, listing cycling, swimming and walking as his exercises of choice.