Farmers told to prepare for trade pain outside single market

Leaving the Single European Market will present many challenges post Brexit, with the cost of trade likely to increase and the logistics of moving goods to our nearest neighbours set to become more complex.

Addressing a Brexit briefing organised by EU media group Euractiv in London on 9 March, NFU strategy director Martin Haworth said there were more threats than opportunities in relation to trade.

Even if government was able to negotiate a customs agreement with the EU, avoiding the imposition of tariffs, transactional costs would still amount to 5-8%, which would weigh down on farm prices.

See also: Three options for post-Brexit farm support explained

The reintroduction of border controls would also provide plenty of scope for disruption to trade.

Mr Haworth recalled past “lamb wars” with France (in which the French had blockaded shipments from the UK in 1990 due to low prices).

“None of that has happened since we’ve had the single market,” he said.

Mr Haworth also warned of the challenge of getting agriculture included in any future Free Trade Area, pointing out that food and farming was always a problem area in such trade talks.

The EU and the UK had different priorities, he added, with the EU focussed on agriculture and the UK more concerned about financial services.

Failure to secure a deal with the EU could see the UK reverting to World Trade Organization trade rules, which would be very damaging in terms of selling to key markets in Europe.

Opportunities

These concerns were echoed by Peter Hardwick, head of international trade development at AHDB.

While he acknowledged there were opportunities to develop business outside the EU, securing such deals would require sanitary and phytosanitary agreements. “These take years to develop and agree,” he said.

There were also issues of perishability to consider, when looking to sell farm produce to more distant markets.

“It is a difficult and long-term project to develop new markets overseas,” said Mr Hardwick. “Continued access to the EU market remains crucial.”

But Lord Teverson, chairman of the EU Energy and Environment sub-committee in the House of Lords was more upbeat, pointing out that the UK remained an attractive market, with more than 60 million relatively affluent consumers.

“There has to be some leverage in that,” he said.

Senior executive with sugar refiner Tate & Lyle, Gerald Mason, also played down the challenges of trading with the rest of the world, suggesting the costs were quite low once the processes were mastered. “It’s not as scary as you may think,” he said.