Brexit

Why UK entrepreneurs and farmers deserve better than the disaster of no deal

BY George Freeman & Helen Goodman   /  4 April 2019

“A no-deal would be absolutely savage for us. I cannot imagine how bad it would look.” Guess who said that? One of the usual Remaniac politicians, surely?

Wrong. That sentence was uttered a few weeks ago by the President of the National Farmers’ Union, Minette Batters.

She is absolutely right. Reverting to WTO rules would be catastrophic for farming and the countryside. We are both MPs representing rural areas: one Labour and one Conservative. We may disagree on many things, but we agree most profoundly on this. No responsible Member of Parliament with a farming constituency can let a no deal happen on their watch.

The pleas from the national farmers’ unions of England, Scotland, Wales and Northern Ireland could not be clearer. With no deal, we face possible trade disruption on the export of UK animal-based products such as meat, eggs and dairy to the EU and a flood of cheap food produced at hugely lower cost and welfare standards that would hammer UK growers.

Indeed, one of the main threats to domestic producers from a no-deal Brexit will be the temptation for government to rush into injudicious trade deals with agricultural powerhouses such as the US, who have already made clear that they expect the UK to accept their produce despite the fact it has been produced to standards that would currently be illegal in the UK.

The UK sheep sector would be especially seriously hit. In 2017, we exported 31% of domestic sheep meat production – the equivalent of 4.5 million sheep – and 94% of this goes to the EU. No wonder DEFRA is keeping the much-rumoured plan to slaughter 10 million lambs under lock and key.

A no deal Brexit on WTO rules is likely to trigger export tariffs imposed on the food, feed and drink that go to the EU. That means export tariffs of 37% on chicken, 48% on lamb, 84% on beef, and 30% on pork. This isn’t a marginal change. This would render many UK farming and food businesses totally unviable.

That’s not all. Whilst the mutual interests of JLR, BMW and other automotive giants will probably mitigate the short-term impact on the automative sector, the risk of internal domestic political pressure in France and Germany and the Benelux countries of a trade war in food and agricultural products is very high, with trade barriers going up between the UK and EU, exports of organic products to the EU being severely curtailed and sudden labour shortages and/or cost increases resulting from the end of our free movement rules without an alternative arrangement.

Who would suffer the most? Not the big landowners who receive the EU payments and have the value of their land to fall back on, or the supermarkets with pan-European businesses. No. It’ll be the small UK farms and small businesses: the tenant farmers, contract farmers and family farms who will be clobbered, in both upland and lowland areas. And the commercial food and farming businesses running on tiny margins supplying ultra-competitive supermarkets.

Farming is one of the jewels in the crown of the UK economy.  A major industry which also maintains a beautiful countryside. As much as 60% of all food eaten here is grown on British farms. It boosts the UK economy by c.£108 billion and provides over 3.7 million jobs: from the upland hill farms which keep our National Parks the world-class attractions they are, to the agricultural innovation and competitiveness of our arable, pork, poultry, beef and horticultural sectors.

And farming is uniquely vulnerable for a very simple reason: most farms are based on planting crops or husbanding livestock on an annual cycle in which farmers invest all their costs up front, reliant on future earnings downstream. Crops are in the ground and animals in the fields now on the basis of market assumptions and conditions which are likely to be thrown up in the air with a no-deal Brexit.

In the uplands, farming matters to us all. Not just to farmers. In Teesdale there are 400 sheep farmers and 17 sites of special scientific interest. It is home to a huge carbon sink, fabulous hay meadows and many birds, including curlews, lapwings, snipe, black grouse, oyster catchers and partridge.

Large areas of the Pennines are common land and they’ve been farmed in a similar way for 500 years. Farming on the commons has produced an excellent balance between man and nature. But the environment is fragile. In farming terms, the land is also marginal. Farm incomes average £14,000 pa. Any abrupt and adverse damages would put all this at risk.

In terms of subsidy arrangements and regulations, many hill farmers are open to a switch in the basis on which subsidy is paid from the CAP to payments for public goods. Indeed, the RPA and the inspection regime are inefficient and much resented, while the quality of the biodiversity means they are well placed to be rewarded for public goods. The low incomes and ageing profile mean the payments certainly can’t be lower, however. For these communities to thrive, incomes need to rise and recognition given to essential, traditional skills like stonewalling.

Equally, scope for cutting regulation is limited as long as farmers want – and need – to sell into the EU market. Standards, particularly traceability from the market, need to be maintained.

Lowland farming faces terrible consequences too. Wheat, barley, poultry and pork will all be hit hard by a no deal, not to mention the impact on leading agri-science research. In Mid Norfolk, for instance, the main employers are Banham Poultry (1,000 jobs) and Cranswick Country Foods (another 1,000 jobs). Indeed, Norfolk leads the country in poultry and is in the top three areas for pigs. It is also a hub of new UK agri-tech research and innovation. East Anglia more generally has a huge malting barley and milling wheat sector which would be devastated by a no-deal Brexit leaving many growers and food producers who rely on exporting to the EU facing very serious short-term consequences.

So where does that leave us? As MPs for lowland and upland areas, we have put aside our party differences and come together because we believe we must find a solution that does justice to the Referendum result while also ensuring that our vital agricultural sector is able to thrive.

We need a Withdrawal Deal. In our view, the EFTA and the “Common Market 2.0.” model provides a lot of what we need. We would be out of the political union so many of our constituents voted against, but still inside the single market. It would maintain free movement for workers, but not for citizens. EFTA would also return control of fishing and farming, ending CAP and CFP inconsistencies and prohibitive fishing quotas.

It would mean we can target our spending to provide more incentives for the sectors in innovative ways. We could subsidise non-viable upland farmers to protect National Parks and support small farms as they diversify into tourism, leisure and independent family businesses.

The most ardent no deal enthusiasts boast about the possibilities of cheap food. But there’s not much advantage in eating cheap food if you’ve lost your livelihood through farm closures, or your job in the pork or poultry factory, wheat mill or barley maltings. More than that, our farmers manage over 70% of the UK landmass – if we lose our farmers because they can no longer run viable businesses, then our cherished farmed landscapes will suffer. That’s not only disastrous for our rural communities, but for our entire population who benefit so much from access to our beautiful, managed countryside. Whatever the benefits of leaving the EU, wide-scale rural abandonment was never a feature of anyone’s vision for post-Brexit Britain,

Our farmers, and our workers, deserve better than that. Our country does, too. We must act before it’s too late.

George Freeman is Conservative MP for Mid Norfolk, former Chair of the Prime Minister’s Policy Board (2016-17) Minister for Life Sciences where he led the UK’s first ever Agri-Tech Strategy in 2013 and is a former Policy Adviser to the National Farmers Union. 


 
Helen Goodman is Labour MP for Bishop Auckland, former Deputy Leader of the Commons and Chair of the All Party Group for the Uplands. 


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