The UK Government must compensate farmers in the event of a ‘No-Deal’ Brexit, Scotland’s Rural Economy Secretary Fergus Ewing has said.
Ewing explained that sheep farmers are particularly at risk should the UK leave the EU without a deal.
UK sheepmeat exports are worth £390m each year, and with almost 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.
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 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.”
Potential impact
Research by SRUC (Scotland’s Rural University) was published in 2018 assessing the impacts of post-Brexit trade and agricultural support changes on Scottish farms.
The study found that specialist sheep farms in Less Favoured Areas are particularly vulnerable to trade scenarios where exports face tariffs or imports face no tariffs, particularly where direct support is removed.
Under the most extreme Brexit, some 89% of Scotland’s specialist sheep farms are expected to return losses in 2022.
NFU Scotland president Andrew McCornick added: “Scottish agriculture needs a deal to be brokered before it is too late and cannot afford to enter into a situation where there are no trade deals and no access to EU workers.
“Guaranteeing these key aspects is absolutely paramount in ensuring Scottish agriculture has a smooth transition post Brexit.
“In the event of a no-deal Brexit, Scotland’s livestock sector will be more reliant than ever on support payments – which are already critical for business viability. Scottish farmers and crofters will need to be able to rely on a system which delivers their payments effectively.
“One option would be to seek a funding package from the UK Treasury, ring-fenced and paid via the Scottish Government, to bolster the existing support payments mechanisms. This could allow all businesses to be cushioned through an inevitably turbulent period.”
