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Why Gove fears for farming in a Brexit no deal

20th Feb 2019 / By Alistair Driver

OK, so most of it wasn't new, but Micheal Gove's analysis of how farming could be affected by a Brexit no deal is worth repeating. 

Here's what the Defra Secretary said at yesterday's NFU conference: 

Gove NFU19If we leave without a deal then there will be significant costs to our economy - and in particular to farming and food production.

Export delays

As things stand, just six weeks before we are due to leave, the EU still have not listed the UK as a full third country in the event of no deal being concluded. That means as I speak that there is no absolute guarantee that we would be able to continue to export food to the EU. I am confident we will secure that listing, but in the event of no deal the EU have also said they will impose strict conditions on our export trade.

Tariffs

If we leave without a deal the EU has been clear that they will levy the full external tariff on all food. That means an increase of at least 40% on sheep meat and beef, rising to well above 100% for some cuts. The impact on upland farmers and the carousel trade in beef would be significant and damaging.

The vast majority of our sheep meat exports - 90%- go to the EU, France in particular. Tariffs at that level would increase prices dramatically. We know that other nations are hungry for that trade. Other EU nations - from Spain to Romania - would seek to supply French markets. And nations like New Zealand and Australia would still have tariff-free trade for a specified quota of sheep meat to the EU while we would have no such access in the event of no deal.

Of course, our exports are in demand because of the high quality of our fresh produce - second to none in the world. But if European buyers do switch contracts because tariffs make our exports significantly more expensive it will be difficult to re-establish our market access even if those tariffs come down in the future.

Port checks

Tariffs are not the only problem we would face. All products of animal origin entering the EU would face SPS checks. The EU’s current position is that 100% of imports would need to be checked. And, in order to be checked every import would need to go through a border inspection post.

A huge proportion of our food exports to the EU currently go through Calais. As I speak there are no Border Inspection Posts at Calais. None. The French authorities promise to invest in BIP capacity but with just six weeks to go we face considerable uncertainty over future arrangements.

The requirement for checks will inevitably slow the processing of exports, and for every lorry that is delayed at Calais there is a knock-on effect for other haulage and the rapid turn-around of roll-on roll-off ferries.

We can expect, at least in the short term, that those delays in Calais will impede the loading of ferries, constricting supply routes back into Britain and furring up the arteries of commerce on which we all rely. That will only serve to increase transport costs for British exporters.

New paperwork

In addition, UK exporters will also need to comply with new customs paperwork, we’ll need to work with HMRC for new registrations and we’ll need to supply Export Health Certificates where none have been required before.

New labelling

New labelling will be required for UK products of animal origin exported to the EU and some sectors, such as organic food producers, may not have their products recognised as distinct until some time after we leave.

In summary

The combination of tariffs, in some cases doubling or more the price of exports, new checks which will be time-consuming and costly, increased transport frictions and cost, new labelling, customs and SPS requirements will all create significant difficulties for food exporters - small businesses and in particular small livestock farmers would be the worst hit.

The Government is, of course, doing everything it can not just to secure a deal but also to mitigate the impact of leaving without deal. While I can and will energetically and determinedly try to deal with the consequences of no deal let no one be in any doubt how difficult and damaging it would be for British farming.

Of course, Britain is a great and resourceful country and no sector of our economy is harder-working and more resourceful than our farmers and food producers. Over time we would get through.

But I emphatically do not want to run the risks that leaving without a deal would involve.

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