Brexit could leave Highlands and Islands with no sheep or cattle

Provided all the political bluster comes to pass and this country leaves the EU after almost 50 years of being closely aligned to the fortunes of wider European agriculture, farmers in this country will face a largely unknown but probably less profitable future.

Controlled, comforted, sometimes even cosseted by the Common Agriculture Policy (CAP) since the 1970s, the farming industry has been more integrated into European policies than any other sector of the UK economy. The disentanglement will not be easy or without pain.

It is worthwhile recalling that even before Europe and the CAP came along, the profitability or otherwise of farmers in this country was set by an annual Price Review put in place after WWII to ensure food production in this country. But all of that will be history after 31 October, and a new world beckons for farmers and food producers. Much of what this new farming world will look like is unknown and it is safe to say that, to use Michael Gove’s description of post-Brexit life, there will be “a few bumps on the road”.

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Before he moved off to his current ministerial role, Gove, as Defra Minister, lodged the basis of the Agriculture Bill but this has quietly gathered dust in Westminster since it was lodged last September. The proposed legislation shifted the emphasis of future farm support from production and land-owning towards environmental aims. It also contained plans to top-slice some of the cash previously awarded to large-scale recipients.

A great deal of detail still needs to be worked out as far as English and Welsh agriculture is concerned, and this is the case even more so in Scotland where the government has provided slogans but no actual policies, much to the frustration of National Farmers’ Union of Scotland (NFUS) president, Andrew McCornick.

The NFUS and the Scottish Government both want to see financial support provided for livestock farming in the Highlands and Islands, as without such a subsidy sheep and cattle would disappear in those areas, with the consequential negative effects on rural economies. And this is a major concern for the meat processors, with Andy McGowan, chairman of the Scottish Association of Meat Wholesalers, calling for “real money” to go into the red meat sector.

The subsidy system has been largely guaranteed until 2022, although funding for support in the hills and less favoured areas has still to be confirmed. A more immediate financial concern about leaving the EU without a deal is that markets may fluctuate dramatically with the combined threat of export tariffs and cheap imports.

After looking into his crystal ball on future prices, Michael Haverty of consultants, Andersons, estimates there could be an annual drop in income of £850 million for UK agriculture if there is no deal. Haverty reckons that if that loss of income were to be shared around every farmer in the country, it would knock one fifth off their bottom line. And that would put many out of business. Sheep farmers would fare the worst as there may be no market for up to a third of the lamb currently produced in the UK and exported to mainland Europe.

Phil Stocker of the National Sheep Association has called for emergency government support if the export market collapses in the event of a no-deal Brexit. Former MEP George Lyon has also predicted that any loss of the European export trade could result in a painful restructuring of the sheep sector.

Cattle producers will also be hit badly, with reduced access to European markets. While politicians have airily suggested that Japan, China and South East Asian countries might take up any slack, the cold reality, as pointed out by Quality Meat Scotland, is that those markets currently only take a fraction of the tonnage going to France, Germany and the Netherlands.

The indirect effect of the kind of trade deals that are being suggested with the United States could also affect UK agriculture profoundly. Chicken washed in chlorine has become a cliché for the different health and welfare standards in the US, but there are others such as the use of hormones in beef production and the acceptance of GM-produced foods which could bring into this country tonnes of foodstuffs produced to lower standards than are currently permitted in the British Isles.

The fear in the farming community is that food importation is often a trade-off against the exports of manufactured goods. There is also the reality that politicians like nothing better than ample supplies of cheap food.

Trade deals will be a big battleground for UK farming leaders in the non-EU years ahead, and much will depend on whether the buying public will prioritise price or provenance.

Post-Brexit shortages in the farm labour force are also a major concern, with almost all the soft fruit and field-scale vegetables picked by workers from overseas. James Porter, a soft fruit grower in Angus, reckons that during the summer months, somewhere between 10-15,000 foreign workers are employed on Scottish farms.

The UK government is clamping down on those finding work in this country and intends to allow only a nominal number of workers to come in next year. The other problem in attracting foreign labour onto farms nowadays is the collapse in value of the pound. While foreign labour used to consist of Eastern European students, it now involves Romanian or Bulgarian workers from marginalised communities.

Another post-Brexit problem will come as a consequence of the fact that most agricultural machinery manufacturers are based on mainland Europe and most UK dealers operate on a “just in time” basis on holding spares. The current swift ability to be supplied with spares and carry out repairs will take a knock if customs delay imports.

There is a similar concern over veterinary medicines, many of which come in from the EU. Forward planning – involving a fair bit of guesswork – will be needed to ensure adequate supplies of the right medicines in the right place at the right time.

And then there is the Irish border question. This may seem somewhat irrelevant to the future of UK farming but that perception would be totally wrong. Without an Irish border in a post-EU life, there would be great opportunity for less scrupulous operators to make large margins on cross-border trading. Unless border posts are installed, there is the danger of EU markets being overrun by third countries using Northern Ireland for illegal exports.

In summary, there is a future support framework for farming but it will not be as robust as it has been in the past. Support policies will be based on “public goods” although so far there is little clarity about what these goods may be.

Market prices will be far more volatile than they have been for decades, and supplies to shops will be more erratic as this country will not have the same access to Europe that it currently has.

Ever since the June 2016 vote, one of the most popular political statements has been that there will be no “jumping off the cliff edge”.

That may well yet be true, but for farming there is a pretty steep downhill slope to be navigated in the post-Brexit years.

Andrew Arbuckle is a Scottish Liberal Democrat politician, and a former Member of the Scottish Parliament.

This article first appeared in The Scotsman’s autumn Vision magazine. A digital version can be found here.