Navigating BREXIT

A deciding vote


Calgary-based Western Producer reporter Barbara Duckworth was in Britain recently and spoke 
with farmers and policy makers about BREXIT 
and what it could mean 
for the country’s agricultural industry.

In that understated English way, Brian Lear describes BREXIT as a “bit of a mess.”

The English beef producer wonders where agriculture sits on the agenda as negotiators work through the tangled web of details involved in separating the United Kingdom from the European Union.

He wants to know about possible tariffs, currency volatility and potential competition from lower-cost producers in other countries.

However, little information is forthcoming from EU headquarters in Brussels.

Related story – So what happens next?

“There will be a place for beef producers in this country, you just have to be one of the efficient ones is the way I look at it, because everything is out control,” he said in an interview at his farm at Aylesbury in central England.

The loss of control troubles farmers in the Republic of Ireland and the United Kingdom as they watch the biggest divorce since Henry VIII discarded his first wife in favour of a younger woman. Like that acrimonious split there was upheaval, uncertainty and change forced on an unprepared nation.

In fact, some of the BREXIT negotiation tactics are referred to as Henry VIII clauses where ministers change laws and regulations without consulting parliament.

Agriculture is a low priority as both sides debate the future of the 40-year-old economic union that has integrated human rights law, trade, regulations, food production and culture, said Irish farmer Angus Wood.

A cereal and livestock producer from County Wicklow near Dublin, Wood is also on the board of the Irish Farmers Association and is in tune with developments as officials trade barbs in the media without providing details about how businesses might be affected in the aftermath.

He wonders what the U.K. hopes to gain from this upheaval.

“The U.K. is starting from a position that anyone else would hope to finish on, a really good deal.

“They can’t get better than where they are at the moment. They have free access to 500,000 European consumers, free movement of people,” he said.

Born in 1971, he has never known life outside the EU but he knows the Irish stories about poverty, a low standard of living and farmers immigrating to Canada, United States and Australia.

“Prior to European entry, Ireland wasn’t a very good place to live. It wasn’t easy to be in Ireland and Europe has been very good to Ireland,” he said.“People forget that. The European Union is probably at the forefront of workers’ rights, human rights, climate change and the kinds of things people take for granted now. The European Union is not a bad place to live.”

Gavin Dick of Scotland said the effects may not be known until the break is complete. Things might be better in 15 years, but those living through the change may have a considerable adjustment ahead of them.

Dick is the manager of the cereals and oilseeds division with the British Agriculture and Horticulture Development Board. The organization represents all commodities except poultry and collects farmer levies to support education, marketing and research.

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The lack of information is troubling as the organization tries to provide farmers with possible scenarios and business plans to help them survive a post-EU world.

“We are delivering forests of paper but in those forests of paper there is not a single action that a farmer can react to from a business perspective,” he said at the Scottish Rural Centre outside of Edinburgh.

The British decision to leave the EU bloc followed a June 2016 referendum when 51.89 percent of the British public voted to leave. Most of Scotland, Northern Ireland and regions around London voted to remain.

British Prime Minister David Cameron resigned when the vote was lost and Theresa May took over and quickly called another election leaving her Conservative government in a minority position, but she promised to honour the referendum decision.

Separation is scheduled for March 29, 2019. The British government repealed the European Communities Act of 1972 in September. Following that, May asked for a two-year transition period and a commitment to keep paying 10 billion pounds a year to the EU until 2021.

It was hoped to be a conciliatory offer but Donald Tusk, president of the European Council told reporters, “We will discuss our future relations with the U.K. once there is so-called sufficient progress,” he said. “I would say there’s not sufficient progress yet.”

The National Farmers Union representing 55,000 producers in England and Wales did not anticipate the referendum outcome. It advised farmers to stay.

There was little information beforehand and in the days leading up to the vote, it became a divisive issue, even within families, said Minette Batters, deputy president of the NFU and a beef and lamb producer from Wiltshire.

“The government was so adamant it wanted to remain, the way the debate was handled, it got more and more toxic the closer we got to the vote,” she said in an interview at NFU headquarters at Stoneleigh Park near Warwick.

More farmers voted to remain than leave but there is a general agreement about why the vote went the way it did.

“It was all about taking back control of our own democracy, our own borders and we can build a future inside the U.K.,” Batters said.

“There are advantages and minuses in being part of Europe for 40 years. On the food supply it has been good going in with tax-free access to 500 million people. It has been very good to the U.K. and very good for Europe,” she said.

“Politically, it has deferred all the decision making to Brussels. The fact that we don’t have any food policy hasn’t mattered because we trade with Europe and the rules have been set by Europe and interpreted by us,” she said.

The government promised to release a made-in-the-U.K. agriculture policy next year.

“So, the challenge is now is to position where agriculture sits with government. That is no mean task because in their eyes we can afford to import our food from anywhere in the world,” she said.

Batters, who raises pedigreed Herefords and a has a commercial herd of Simmental-Angus cross cows, is examining her business plans. She needs to know how she might market her calf crop in 2018 and 2019.

“It is bizarre. We don’t know if we are trading with Europe or not and that is the craziness of all of this,” she said.

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She anticipates more consolidation of farms and some farmers may quit. The red meat sector could be among the hardest hit.

There are opportunities for expanded trade in dairy, but the U.K. is in short supply of lamb and beef. Cheaper imports could flood in and force domestic livestock prices lower.

“If we have full and unrestricted access to the European market, we will be protected. If we do not achieve a deal with the EU, we will be trading with the rest of the world.”

Consumers say they support British products but often price trumps loyalty, she said.

The British government has committed to continue farm subsidies until 2020 and many depend on that money to live.

Farm debt is at a record 18 billion pounds sterling.

“Some of that will be on-farm investment but a lot of it is people borrowing money to live on.”

Like many farmers, she also depends on hired help.

Thousands of workers from the European Union come to the U.K. every year to work in processing plants, hog farms and horticulture. Many meat inspectors come from Spain.

A system of work permits to bring in labour is under consideration but under the current climate many of these people have decided to work elsewhere. Many are paid less in the U.K. because of the weaker currency and many do not feel welcome in Britain.

Politicians may also take farmers and food production for granted. Most voters are urban and the Conservative cabinet is less interested in agriculture and it has limited trade experience.

“The main proportion of MPs are urban and their worries are the benefits system, education and the national health system and farming is taken for granted, really. It is always available 24-seven, you can always buy food,” she said.

Paul Hogan, European commissioner for agriculture and rural development, said if there are uncertainties surrounding the rules of BREXIT, then blame can be laid solely at the doorsteps of the U.K.

“In my view, and in the European Commission’s view, the U.K. is responsible for this. They voted to leave and it is up to them to come up with the answers,” he said.

Hard BREXIT

That describes what will happen if the U.K. and EU fail to reach an agreement by March 29 2019. Britain would revert to World Trade Organization tariffs on imports and exports to and from the EU rather than the zero tariffs granted to member states.
 The split could run into obstacles, such as an election in Germany with a possible leadership change or coalition government. 
 That could delay the European Council from moving ahead and EU negotiators have said an agreement must be reached by October 2018 to leave time for the member states to 
endorse BREXIT in 
their own parliaments.

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