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EU Referendum: What Would Brexit Mean for Farming?

22 June 2016

ANALYSIS – Since the referendum on the UK’s membership of the EU was announced, many stakeholders in agriculture from the UK and further afield have had a lot to say about whether the country should stay in or leave. Here is an overview of what the experts have been saying about the possible impact of a British exit over the past few months.

Academic analysis highlights uncertainties of leave situation

The referendum date, 23 June, was only announced on 20 February, but before that people were already starting to analyse what Brexit might mean for agriculture.

An early February report from Professor Wyn Grant of the University of Warwick and the Farmer-Scientist Network said it was it was hard to see any advantage to British farmers in leaving the EU.

He said that a lack of planning for the possibility of Brexit meant a period of great uncertainty would follow such a vote, making medium and long-term planning difficult for farmers.

"There is a perception in the industry that leaving the EU would reduce the burden of regulation. I do not think there will be a bonfire of regulations as the problem is not just from Brussels but from gold-plating by London. There are legal complexities which have not been considered," Prof Grant said.

Speaking at the AHDB Outlook 2016 conference in London, Prof Alan Matthews from Trinity College Dublin said that the outcome for agriculture would depend on how the UK filled the policy vacuum left over – including the negotiation of new trade deals and support payments.

Ministers divided

Later in February, the UK’s Environment Secretary Elizabeth Truss came out on the side of remaining in the EU, in a speech to the National Farmers’ Union (NFU) Conference in Birmingham.

She said the single market was important to UK food and farming exports, and highlighted opportunities to benefit farmers by simplifying the Common Agricultural Policy (CAP).

However, farming Minister George Eustice is firmly in the Brexit camp. Phil Stocker, Chief Executive of the UK’s National Sheep Association, praised Mr Eustice for his emphasis on the opportunities of leaving the EU.

“It was encouraging to hear Mr Eustice echo NSA’s frustrations on the increasing amount of red tape and regulation farmers are up against, and his promise appears to be that if we exit the EU we can drastically reduce this while still demonstrating equivalence with EU regulations for trade,” Mr Stocker said.

Mr Eustice has written about how he envisions farmers receiving equal levels of support after a Brexit as they do now, saying “non-EU countries like Switzerland and Norway actually give more support to their farmers than we do”.

Meanwhile the Farmers’ Union of Wales, for the remain side, said that there was “absolutely no meat on the bone” in Mr Eustice’s plan for farming outside the EU, and called for a detailed contingency plan for agriculture.

We also featured a report from a speech by Daniel Hannan, Conservative MEP for South East England at the NFU Conference. He favoured the Leave side, saying the UK puts too much into the CAP and does not get enough back.

In response, George Lyon, the former Scottish MEP and member of the Britain Stronger in Europe group said that British farmers are more powerful and secure inside the Union. “Leaving will put all that at risk. It will be a messy divorce,” he said.

National Farmers’ Union (NFU) opts for remain 

In April, a study by Wageningen UR in the Netherlands, funded by the NFU, looked into three different possible trade scenarios after a Brexit.

The study said that if trade was liberalised, farm gate prices and incomes would fall, particularly in meat and dairy sectors. The other two scenarios were positive for farm incomes, but the study said these benefits would be offset by the potential loss of direct payments.

After the report emerged, the UK’s NFU came out in favour of the remain camp "based on current evidence", saying it had to take a position due to referendum rules. However, the organisation said it would not actively campaign for either side.

Farmers and business split

At a debate at the British Pig and Poultry Fair in May, featuring AHDB chairman Peter Kendall, MEP Stuart Agnew, farmer Colin Rayner and poultry producer James Hook, the divides within the farming community on this issue were clear to see.

Stuart Agnew claimed that EU regulation only added cost to British farming, and insisted that even within the EU there wasn't a level playing field. “There are still caged hens and sow tethers out there,” he said. Colin Rayner said it was preferable to be able to hold British politicians accountable rather than being told what to do by foreign commissioners.

But on the pro-EU side, Sir Peter Kendall argued that 14 per cent of the UK's poultry and 19 per cent of its pork is exported to EU nations, so it was essential to retain that open market.

Pan-European poultry business Moy Park came out in favour of Remain just last week, saying it provides businesses with more certainty about the future.

In his regular blog for TheCattleSite, dairy farmer John Wigley said he thought it would be better to leave the EU. “I have spent my lifetime making decisions for the sake of EU officialdom, rather than the cows, my farm and my customers and I want it to change,” he wrote.

The international view

A Brexit would also have an impact on agriculture in other countries.

Irish Farmers Association (IFA) President Joe Healy warned that the UK is very important to Ireland's agri-food market, with over 40 per cent of Irish agricultural exports heading there.

"Should the UK vote to leave the EU, Irish agriculture would undoubtedly suffer negative consequences, both in the short-term and the longer term," commented Mr Healy.

In the US, market analysts Steve Meyer and Len Steiner explained that the US dollar index has already declined sharply after polls suggested that British voters will decide to stay in the EU, after all.

However, either way, the vote has the potential to dramatically impact broader financial markets, causing significant changes in currency values and affect short term growth projections for the global economy.

According to the analysts, despite all the various projections by economists, the reality is that no one really knows the true impact if Britain decides to leave.

Alice Mitchell

Alice Mitchell
News Team - Editor



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