Sheep and barley sectors could see steep declines in no-deal scenario

As negotiators continued last minute efforts to draw up a UK/EU trade deal yesterday, new evidence emerged of the costs of a no-deal to Scotland’s farmers.

Rural Economy Secretary Fergus Ewing.

A new report showed that, with a heavy reliance on barley and sheep production, the viability of many Scottish farm businesses would be jeopardised under a No-deal outcome.

But while this stark conclusion, given in a full impact assessment of the effects of Brexit on Scottish farming, would come as a surprise to few, the report revealed the scale of the problem for these sectors which have long been the mainstay of many farm incomes.

The independent report - conducted by the consultants Andersons for the Scottish Government - compared a no-deal scenario with a free trade agreement with the position during 2018/19 during EU membership.

For barley and sheepmeat, such declines would be substantial, with overall output from the sectors projected to fall by 10-29% respectively in the short-term and 17-36% in the long-term.

Translating this to on-farm effects, the assessment predicted a 20% fall in profitability levels on cereal farms and a 24.2% plunge in LFA cattle and sheep units.

The report showed that while there would still be additional costs even if a free trade deal was agreed with EU – due to non-tariff barriers such as additional paperwork and inspection delays – this saw a 3.6 per cent fall in cereal profitability while LFA producers income remained comparable.

But while the seed potato industry, which also relies heavily on exports, was also set to see big losses, some sectors could see improved levels of profitability – given the right set of circumstances.

And while dairy, beef and the horticultural and soft fruit sectors could benefit by replacing products which were currently imported, the report concluded that this would be dependent on the attitude which the UK Government took to tariff rates and standards required for foodstuffs in future trade deals with other parts of the world. It was also flagged up that many sectors would continue to be highly reliant on the ability to access migrant labour – and the lack of this coupled with higher labour costs could render many soft fruit and vegetable businesses non-viable.

Scotland’s rural economy secretary, Fergus Ewing said that it highlighted that substantial risks to Scottish agriculture remained in either scenario - with future trade agreements, free movement of labour or changes to agri-food standards all constituting major threats.

“This report shows that a ‘no-deal’ Brexit would be hugely damaging for parts of Scottish agriculture and there would be substantial and lasting impacts to overall Scottish agricultural output. The risks and potential impacts of a ‘no-deal’ scenario beyond the end of the transition period are well-documented and further backed-up by this report.

“A free trade agreement (FTA) with the EU would be the least damaging for Scottish agriculture according to this report but that’s not to say that Brexit would impose no risk if an FTA is secured.”