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.
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