A No Deal Brexit will not just impact finance and manufacturing – it will be a disaster for cereal producers too

With so much emphasis being placed on how a No Deal Brexit will affect banking and car production, little thought has been given to the potentially devastating impact crashing out of the EU would have on Britain’s agricultural sector.

The National Farmers Union (NFU) has produced a series of briefings to try and raise awareness amongst MPs in a hope of avoiding disaster – most recently on cereals. The UK produces nearly 25 million tonnes (Mt) of arable crops, collectively worth over £3 Billion at the farm gate – driving significant economic activity in rural economies.

As part of the EU, the UK arable sector has been able to export circa 85% of its grain surplus to other member states and, whilst the UK does export grains to the wider global market, these markets are fiercely price competitive with emerging producers such as Russia able to dominate due to a lower cost base relative to developed economies.

In a No Deal scenario, the UK would have to pay tariffs on grain entering the EU market place, meaning would have to compete with other third countries in hope of securing generic quota which enables access at a tariff level of €12 (c£10) per tonne for wheat and €16 (c£14) per tonne for barley. There is far from any guarantee that the UK would be able to secure quota and without it tariffs would shoot up to €95 and €93 per tonne respectively for wheat and barley. The reality is that trade would not occur at these higher tariff levels, forcing UK grain to compete on the world market in direct competition with low cost, lower regulation producers.

The price at which the UK can export its grain surplus determines the price of the whole crop, regardless of where the grain is going. As such, tariffs would not only impact the value of exports, but indeed the entire UK production until the surplus is cleared. Based on this principal and assuming the UK could access quota into the EU market, the NFU estimates that tariffs on UK grain into the EU would cost the arable sector alone at least £300 Million. This would have a detrimental impact the sector’s already wafer-thin margins.

In addition to this direct impact, the UK would also be hit by tariffs on exports of flour to the EU. 95% of UK flour exports are to the EU with 75% of these going to Ireland. In a No Deal, flour millers would face a massive €172 per tonne tariff on flour exports. In terms of grain equivalent, UK flour exports represent half a million tonnes. A No Deal would essentially eliminate the UK’s ability to export flour and increase the amount of grain surplus in the UK.
Around half of UK grain production goes into animal feed. A No Deal Brexit would also impact the UK poultry industry by creating imbalance and a significant threat of being undermined by cheap, substandard imports. Again, this would damage demand for UK grain and further increase reliance on the tariff-laden export market.

To quote the NFU’s own briefing: ‘A No Deal Brexit would be disastrous for the sustainability of the UK arable sector due to the tariffs imposed on grains and processed products.’ Time is running out, and with Labour indifferent and the Conservatives seemingly abandoning the farming community, the Liberal Democrats can be the champions the rural economy so desperately needs.

* Ian Thomas is the pseudonym for a party member. His identity is known to the Lib Dem Voice editorial team.

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  • John Marriott 10th Mar '19 - 9:20am

    For goodness sake, we know that a no deal Brexit is a potential disaster on most fronts. So, why do so many Leavers still not seem to care?

  • Many leavers do not believe most of what ‘experts’ are saying and at best think that even if there were a period of difficulty it would be short and we would then recover and thrive. Many others among the general population who want to leave have turned off and are not listening; they have become so convinced of their views over very many years and will not listen to anything contrary; they simply want what they think is ‘freedom’ and ‘little immigration’. I live in what has been called the Brexit Capital of the UK and that is what the situation seems to be. I and a few others have written on the other side of the arguments in the local paper, but very few read those. In our local shops I constantly hear people who are absolutely convinced the EU is not only bad for Britain but our enemy.

  • nigel hunter 10th Mar '19 - 10:31am

    Leavers do not want to accept they had no idea what they were voting for. They are dreaming of ‘sunlit uplands’ when we leave.The right wing propaganda papers over the years have brainwashed the populace against the EU . Immigration will not stop,we need the skills they bring in our own cos we have not invested for many years in our own country, it will just come from non Europe, We have NOT been led by the Liberal elite that seem to be despised but by the CONSERVATIVE elite, austerity tightly control the purse strings,opposite of generosity,the hang them flog them mentality,I could go on

  • Why do people not believe a no deal Brexit is a disaster. Well because they feel we are exceptional, two world wars and one world cup etc. Why do they believe that, because the media reinforce the message, as do most polticians.
    I’m afraid most people learn from experience only the pain of a no deal Brexit would cure them. I’ve often said
    “Experience keeps a dear school, but fools will learn in no other,  and scarce in that”.
    Of cause then the blame game will start and how the brave Brexiteers will heroically fight facing the issue of the fool looking back at them in the mirror.

  • nigel hunter 10th Mar '19 - 10:49am

    Cereals. Yes, it will be another consequence of Brexit. Those who control the genetic ally controlled cereal side can control a vast market in Trade deals, The USA? If the country gets into an impossible situation and desperately needs trade deals we will be walked over.
    Likewise, chlorinated chicken ,hormone beef. They do this to control food poisoning,to fatten up beef. they have consequences. Is it not possible that hormones eaten by humans from cattle can increase obesity? Genetic controlled cereals,what unknown side effects can they have. In the 20s/30s cos of mass exploitation of US land led to dust bowls of stripped land leading to dry dessert conditions,the profit motive was all.
    In America the farming lobby is powerful,we must be aware of it ,stay under EU farming rules

  • Peter Martin 10th Mar '19 - 11:10am

    Can I be clear on what is being argued here? On the one hand, we won’t be able to export our agricultural products because world prices are too cheap, and other countries have high tariff barriers, but on the other hand, we won’t be able to afford to import from overseas because prices are too expensive?

    I don’t quite follow this, especially as under WTO terms we’ll have the ability to set tariffs at whatever we like. The UK is a net importer of food so we don’t want to set tariffs too high, but on the other hand we do need to look after UK agriculture. Tariffs are just one way to do this. There are other means of direct support which we need to explore.

    The imposition of high tariffs on UK exports to the EU will cause some change to UK production and marketing. For a time there will be an increased supply to the home market and less going to exports. IF EU cheese imported into the UK has a tariff of 40%+ and UK exports of have tariffs of 40%+ we’ll end up eating less Gouda and eating more Cheddar, Stilton and Wensleydale. Whereas our friends in Europe will find it’s the other way around.

    Maybe this will upset some, but it’s fine by me!

  • It is true that many people, “leavers” in particular. do not believe “experts”. For example, did “experts” forecast the crash of 2008? Only Vince Cable if I recall, good for him. However, the damage was done by people like George Osborne saying things like the economy would crash the day after the referendum. It didn’t and whilst I think that Brexit will be bad for the economy, why should people believe the “experts” this time? I just hope we get the chance for a second Referendum and make it a positive campaign this time. I don’t agree that all “Leavers” are brainwashed/prejudiced. This may be true of some but I think that for many it was a cry to be noticed. Maybe some can be won over by respecting them and not rubbishing them

  • Peter,
    Your desperatly trying to justify a stupid decsion. Give it up mate, perhaps the Daily Whail would appreciate your insight, your much proclaimed economic genius would go down a treat there. Here you really are flailing about, doing your reputation no end of harm.

  • Peter Martin 10th Mar '19 - 12:11pm

    @ Richard C,

    This is good advice. The Remainers’ tactic of denigrating opponents as “Gammon”, “Uneducated”, “Thick”, “Racist”, “Little Englanders” etc is hugely counterproductive. I suppose as a Leaver myself I should welcome it but I’d rather the sides weren’t so polarised, hostile towards each other and could discuss the pros and cons of EU membership in a more rational manner.

  • Richard Underhill 10th Mar '19 - 12:21pm

    David Penhaligon used to tell a story about barley. Paddy Ashdown used to repeat it.
    At a hustings in Truro a voter asked “What do you think about the price of barley?”.
    The Conservative and Labour candidates read out from their scripts.
    The Liberal said “I’m sorry, I don’t know much about barley.”
    and was met by a loud cry from the back of the hall
    “I’ll vote for thee!”
    “There isn’t any barley grown within 100 miles from here!”

  • Richard Underhill 10th Mar '19 - 12:29pm

    nigel hunter: “dessert” or desert?

  • Peter Martin 10th Mar '19 - 12:32pm

    One way in which companies get around trade barriers and manage to maximise their profits at the same time is to use what is known as transfer pricing between one subsidiary and another. So Apple, for example, have a paper trail, which involves Apple (China) selling iphones, at a cheap price, to Apple (Ireland) who then sell them to other Apple subidiaries around the world at a higher prices. The phones don’t go anywhere near Ireland. Just the paper trail. Apple Ireland then repatriates the profits to the USA via nominal bogus consultancy and licencing fees.

    So I was just wondering what’s to stop manufacturers of high tariff items playing the same same? For example, we sell Lamb to a UK owned company in Ireland at an ultra cheap price and pay 45% import duty. They then sell the lamb at full market price to the rest of the EU. If the ultra cheap price is only 10% of the real price then the duty is effectively only 4.5%. Then we distribute the profits using the same “licencing” trick back to the UK owners who are effectively the UK farmers.

    It’s just a thought!

  • Joseph Bourke 10th Mar '19 - 12:36pm

    Alex Hegenbarth rightly draws attention to the absence of debate in the media around the impact of Brexit on agriculture. As always it will be the small farmers who suffer most, while the big farming conglomerates shift production elsewhere.
    Tom Brake writing in the Huffington Post last October notes:
    “Brexit’s likely impact on growth and investment in the UK economy will hit tax revenues to the extent that the government will have little choice but to make further cuts, seeing austerity extend far into the future rather than come to an end.”
    “…the richest in society can afford to absorb the increased costs brought about by the fall in the value of the pound since the vote to leave the EU, those on low incomes cannot, and suffer as a result. …the economically disadvantaged towns are the most likely to suffer the worst consequences of leaving the EU.”
    “..we would invest in skills and lifelong learning opportunities for all, as well as vital infrastructure projects such as super-fast broadband. Alongside this we would also devolve more powers to cities and regions so that decisions on revenue raising and spending are made closer to the people those decisions affect. To tackle inequality, we would introduce tax reforms that would see the wealthiest pay more whilst younger people and those on low incomes pay less, therefore reversing the current trend that has seen wealth inequality increase to the extent that 45% of the nation’s wealth is owned by only 10% of its households.”
    “Brexit puts Britain on a path where austerity will deepen, and inequality will continue to rise.”

  • David Evershed 10th Mar '19 - 2:47pm

    Remember the abolition of the Corn Laws? This was supported by the Whigs, the LIb Dems predecessor party.

    The Corn Laws were tariffs and other trade restrictions on imported food and grain (“corn”) enforced in Great Britain between 1815 and 1846. The word corn in the English spoken in 1815 Britain denotes wheat and not maize. They were designed to keep grain prices high to favour domestic producers, and represented British mercantilism.[1] The Corn Laws imposed steep import duties, making it too expensive to import grain from abroad, even when food supplies were short.

    The Corn Laws enhanced the profits and political power associated with land ownership. The laws raised food prices and the costs of living for the British public, and hampered the growth of other British economic sectors, such as manufacturing, by reducing the disposable income of the British public.

    Leaving the EU and Common Agriculture Policy is the present day equivalent of the abolition of the Corn Laws. Why are the Lib Dems on the wrong side this time?

  • Mick Taylor 10th Mar '19 - 3:02pm

    Peter Martin has odd ideas about what the WTO allows its members to do. [Assuming we get to be members at all, which requires unanimous agreement by all WTO members] We are obliged to set the same Tarif for everyone, we don’t get to pick and choose. We can’t offer a zero Tarif to Switzerland and a 40% Tarif to Norway. We can’t even set a 20% Tarif for cars to Germany and a 30% Tarif to the USA because that’s against WTO rules.
    Unless we negotiate a deal with the EU we will face their external Tarif on all our exports and will be powerless to impose one on imports without risking huge rises in prices.
    There has been a lot of hogwash talked about the WTO and clearly Mr Martin has swallowed it hook, line and sinker.
    I suggest some desk research on the WTO website before raising this topic again.
    By the way, don’t bother to tell me that we don’t have to join the WTO. We are only members through the EU and if we leave, that will lapse and we’ll have to join. At least one country has threatened to veto any such application.

  • Mick Taylor 10th Mar '19 - 3:05pm

    I think Mr Evershead has actually got it the wrong way round. We currently import and export food (including corn) from and to the EU free of tariffs. When we leave we will face a tariff on all exports. So our corn will be exported with a tariff on it. Being in the EU is the equivalent of NOT having corn laws!

  • Mick Taylor 10th Mar '19 - 3:07pm

    Oh and another thing. Countries outside the EU (over 50 at the last count) have negotiated free trade deals with the EU – including food items. We will lose access to those deals when we are outside the EU. Another example of imposing corn laws not abolishing them.

  • We import £3.8 billion of cereals (https://www.statista.com/statistics/281818/largest-import-commodities-of-the-united-kingdom-uk/). If we only produce £3 billion I don’t see the problem. Whatever tariffs the EU charges us we charge them. Therefore imports from the EU should be more expensive than UK cereals so the UK market will purchase UK cereals.

    @ David Raw

    I think the price of lamb is too high. I would love the price to fall so I can afford to buy some. I don’t understand why it is more expensive than beef. I expect cows each more than sheep each day and the quality of the land needed for cattle is higher than that needed for sheep. I think cows need more looking after than sheep.

  • Arnold Kiel 10th Mar '19 - 4:14pm

    It makes no sense to blame leave-voters, and the popularity of no deal with them just highlights the folly of the EU referendum and any attempt to reach them by reason. I am also against blaming the press or social media which operate within the space the law gives them.

    All the blame must go to an incompetent, egocentric, cynical part of the political class. Once Brexit is cancelled, their reckoning will hopefully come. Otherwise, they will reign supreme and conclusively ruin the economy, politics and culture of this once remarkable country.

  • Micheal BG you are not thinking you are guessing. Do some research, Google is your friend ( other search engines are available). Break out from not knowing, embrace knowledge, embrace facts it is rather invigorating.

  • nigel hunter 10th Mar '19 - 5:44pm

    Richard Underhill—- DESERT—- The intensive destruction of the land turned it to a dust bowl. They also call soil dirt , not a caring word for growing food, Just an exploitive word to use the land ruthlessly for production. Their use of GM foods/seeds that they can sell to is will put us in the hands of their agr./chemical giants
    Looking at BBC info. I note that overweight and obese children (6-19) are at the top of this scale and that the UK is NOT second in the list of obese Nations. Also the US is tops of those over a BMI of 30. The chemicals used to ‘clean’ chicken of disease ,I believe, only hides the problem. Equally hormone treated beef. Surely the hormones must pass into human consumption when beef is eaten leading to obesity.Not great if we accept US trade deal. Mass production of cheap food can put pressure on other services eg extra work for the NHS from dealing with obesity and other illnesses

  • Peter Martin 10th Mar '19 - 5:54pm

    @ Mick Taylor,

    “We are obliged to set the same Tariff for everyone, we don’t get to pick and choose.”

    That is assuming we don’t have an approved FTA in place. Have I ever said otherwise?

    There’s really no possibility of the UK being, in the foreseeable future, excluded from fully participating in the WTO. Most of our trade is already conducted via WTO rules.

  • Peter Martin 10th Mar '19 - 6:08pm

    @ Arnold Kiel,

    “Otherwise, they (our politicians) will reign supreme and conclusively ruin the economy, politics and culture of this once remarkable country.”

    I’m just as cynical about our politicians as the next person but at least we, in the UK, like the idea that they can be dismissed via the ballot box if they stray too far from what they initially promised.

    You aren’t the first person to predict the demise of the UK and you won’t be the last. It can’t be so bad if so many people want to swap the much better climate enjoyed by so many other EU countries for the rain of Manchester!

    PS And you yourself have managed to find your way over here!

  • David Evershed 10th Mar '19 - 6:32pm

    Mick Taylor at 3.05pm

    The EU is a protectionist body which sets high tariffs on wheat imports from the USA and Canada in order to maintain high prices on wheat grown in the EU.

    Once the UK has left the EU it will not have to set these high tariffs on wheat from the USA and Canada.

    So the situation exactly matches the Corn Law position I set out above.

  • nvelope2003 10th Mar '19 - 7:28pm

    David Evershed: The main beneficiaries of the repeal of the Corn Laws were the manufacturers who could pay lower wages and thus make bigger profits. British agriculture was severely damaged and the condition of farm labourers became pitiable while land remained uncultivated. Ruining the landowning class was not an unmitigated blessing but it did result in wealthy American heiresses bringing money into Britain to acquire a title or position in British society.
    The Leave supporters have clearly seen who benefitted from the Repeal of the Corn Laws and are as determined as the Whig manufacturers to make the most of it but this time by ruining manufacturing in favour of more profitable and less well paid activities.

    According to the BBC 67% of Northern Ireland people want to remain in the Customs Union and support the May deal – 56 % voted to stay in the EU so the DUP are unrepresentative of the voters, particularly those in business. It would be almost funny if leaving the EU made the Conservative and Unionist Party responsible for losing the last bit of Ireland, no doubt with Scotland following on afterwards.

    So many people seem to think that everything will be fine when we leave but that is just wishful thinking as no one really knows. It is just a phrase to cheer up themselves and the uninformed. I think the same words were used before the start of the last war and even the first world war.

  • nvelope2003 10th Mar '19 - 7:36pm

    Living in the country as a boy we used the word corn to describe wheat and dirt to describe soil. I do not think it had any derogatory connotations. Maybe many Americans are descended from people in the West Country.
    I suspect that growth hormones could be the cause of obesity as they are intended to boost animal growth. Conditions in American farms are said to be unhygienic and the chlorine does not remove chicken faeces entirely. Enjoy your visit to Dallas !

  • I would like to add that legislating MEPs can be dismissed via the ballot box, as can be the members of the council of ministers by the voters of the respective country. The President and members of the European Commission are appointed by member-states. They don’t campaign or promise, cannot therefore “stray too far from what they initially promised”, and have anyhow no right to initiate or approve European legislation. Recently, the top candidates of the political groupings in the EP make a claim to top EU-jobs in competition to member-state governments, which should be welcomed by any critic of back-room appointments. Jean-Claude Juncker was the first President of the Commission making that claim ahead of the EP-elections, so voters knew whom they were likely to get. His claim to having a democratic mandate is legitimate as he clearly sought and got it. There was just one lonely head of state who opposed him to no avail. That particular PM has disqualified himself repeatedly and gravely on European matters, so this rather underlines Juncker’s adequacy for the job.

  • The one head of state Arnold refers to was David Cameron. He no longer holds that post he ran away to sunlit uplands to be paid £120,000 per hour for speeches on Brexit.
    Looks like Brexit works very well for some of us.

  • Denis Loretto 11th Mar '19 - 9:44am

    Amidst all this talk of WTO membership, tariff levels etc it does not seem to be widely understood that “no deal” means no withdrawal agreement- no way of sorting out the myriad of legal and practical arrangements needed to extract ourselves from 40+ years of integration with the EU. Not just trade but security, education, transport etc etc. It is also argued that this entails telling the EU to whistle for most or all of the £35 – 39bn divorce settlement agreed over a year ago. So – no proper legal basis for trade to operate, legal challenges and a trashed international reputation. Nice one.

  • John Marriott 11th Mar '19 - 10:05am

    @Dennis Loretto
    Well done for your demolition of a few of the EU myths doing the rounds. Indeed, you could have added that it’s by no means certain that the WTO would even allow us to trade independently on their terms.

    While we’re at it, what about this business of ‘the democratic will of the British people”? Don’t they mean the ENGLISH people? And is 38% of the voting population really a ‘majority’? I have crossed swords with Mr Martin as well. We know where he’s coming from, don’t we? My problem, as what I call a pragmatic remainer, is that there is always a grain of truth in what he and his ilk actually say. Mind you, the other end of the spectrum, as represented by people like ‘frankie’ can be equally annoying – and that probably includes old so and so’s like me as well! The real problem is that nobody actually knows how it all all finally turn out. We just might know whether we have reached ‘the end of the beginning’ by the end of the week. Mind you, I think I’ve said that before. Ah well, time to finish that morning coffee.

  • Unlikely to be a meaningful vote tomorrow. More jiggery pokery.

  • Let us at least get our terms right. I have voted in two referendums about Europe. If we have a third I hope to vote in that. Oh, and why is it that no one will tell us what the improved deal is that our Prime Minister is asking for. She wrote the backstop to deal with the Irish border issue. I have seen no ideas on how to avoid a border in Ireland except to stay in the EU.
    The pantomime in Westminster continues. The trouble is none of them are very good actors!

  • Tom Harney: The problem of the Irish border will resolve itself because of demography. 37% of children attending schools in Northern Ireland are Protestants and over 50% Catholics. Even now Protestants and Catholics are about equal among the adult population. There is a right to call a referendum on the border every 10 years. When was the last one ? The EU and the Irish Government know this and are just biding their time. The Irish are EU members and the British might not be for much longer. Can you blame the EU for backing Ireland ?

  • @ Ian Sanderson

    Please can you give a link to this type of information? Grade 1 land exists in Kent, and Lancashire; Grade 2 land exists in lots of Eastern England, Yorkshire, Hereford and north of the Thames. Grade 3 exists in northern England, the Midlands and much of southern England (http://publications.naturalengland.org.uk/publication/6172638548328448?category=5954148537204736). Grade 3a land is described as “Good quality agricultural land (capable of producing moderate to high yields of a wide range of crops and less demanding horticultural crops)”.

    @ David Raw
    “You’ve missed that most sheep are kept on marginal land”.

    No, one of my points was that the quality of land needed for sheep is less than for cattle. I used to visit the Lake District when a child and had relatives farming there at the time. I expect I have distant relatives still farming there. The mountain areas of Wales and Cumbria are grade 5 land as I think is Dartmoor. I don’t think cattle are left in the fields at night and so have to be brought in each evening and led out each morning, while sheep stay out most of the time, wondering free across the mountains. Hence my point about them needing less tendering than cows.

    My post was about my not understanding why lamb costs more than beef. I expect I could make out a case for why it is more expensive than pork.

  • may be wrong but I have a sneaking feeling that there is a fudge on the way tonight.

    The EU will ‘clarify’ some point; May will claim a breakthrough and it will be’ sold’ as a triumph of the ‘down to the wire’ negotiating stance of Davis, Fox, Smith, Patel, et al.

    It will scrape through tomorrow and the ‘devil in the detail’ will only become clear when the UK/EU/Eire Backstop is in place and the ‘interpretation’ will allow respective lawyers to wrangle for months.

    Yet another face-saving ‘can kicking’ exercise.

  • Another name for a pragmatic remainer John is a tagalong, you can’t be pragmatic with people who don’t do facts. They believe in their own personal Brexit and nothing will change their minds. A bit harsh you may think, well a hard Brexit they dream of will likely change your mind on that.

  • Just a quick point give a Brexiteer poster on here enough rope and they inevitably hang themselves. They are unable to resist the lure of “my little village”, a wish to return to a glourious past and a disdain for furrins. Untrue they whail, well show me one of you who hasn’t veered into that territory.

    View from Dublin:
    1. Withdrawal Agreement is unchanged
    2. Joint statement is a legal interpretations of what’s in the WA (agreed by both sides)
    3. Unilateral statement is UK talking to themselves.

    Mood in Gov Buildings described as “calm”. #Brexit


    How sad a once great nation reduced to muttering to itself in the corner.

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