Brexit farm compensation

The UK Government must compensate farmers and crofters in the event of a ‘No Deal’ Brexit, Rural Economy Secretary Fergus Ewing has said.

A wealth of evidence now indicates that Scotland’s farmers would be worse off under every scenario when compared to the current trade arrangements, with some or all producers facing lower returns.

Sheep farmers are particularly at risk, with UK sheepmeat exports worth £390m each year, and with nearly 90% of this destined for the European market, the prospect of tariffs as high as 45-50% being imposed on these exports would be devastating. 

Mr Ewing said:

“A no deal Brexit is by far the biggest threat to farming and to our successful food and drink sector. There is a range of independent research highlighting that under all possible scenarios, failure to replicate the current trade arrangements with the EU will have a detrimental impact on farmers, with our sheep sector under particular threat.

“UK sheep meat exports could suffer considerably if tariffs come into play. Carcasses make up an important part of what the UK exports to the EU and could potentially be facing tariffs as high as 45-50% of the price of the meat, which would be a blow to our price competitiveness on the export market. The fact remains that if the UK is unable to competitively supply sheep meat to the EU from the end of March 2019, there’s no other outlet that could come close, where volume is concerned, at least in the near-term.

“I am clear that we cannot countenance the prospect under no-deal of our exports facing high tariffs into the EU, while imports from the EU are waved through tariff-free. The UK Government needs to set out its policy on tariffs now, so that businesses are clear what they will have to contend with. That is why I am calling on the UK Government to guarantee that farmers and crofters  will be compensated in the event of a no deal. Failure to do so, would increase the risk of businesses going under, significantly reduce net profitability across beef, sheep and crops sectors, and lead to widespread land abandonment across Scotland.”

Background

Rural Economy Secretary first called on the UK Government to accept the need for a compensation scheme during a Rural and Environment Devolved Administrations meeting in January 2019.

Assessing the impacts of alternative post-Brexit trade and agricultural support policy scenarios on Scottish farming systems was funded through the Scottish Government’s Strategic Research Programme.

The Impacts of Alternative Post-Brexit Trade Agreements on UK Agriculture report is available on the AFBI website

Brexit prospects for UK beef and sheep meat trade