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Where next for the UK?
The headline message from the New Food Brexit Conference is that, whether we like it or not, Brexit (hard, soft or somewhere in between) will happen, with or without a deal with the EU; and businesses need to ready themselves for consequences foreseen or unintended.
From the New Food Brexit Conference last Tuesday 31st October, – the general mood from the post farm gate audience was downbeat with predictions of a deterioration of food safety, quality and the availability of labour, and an increase in food prices post Brexit. The only speaker with an upbeat take on the situation was Paul Temple, a farmer and AHDB board member. But more from him later.
The first speaker of the day, Erik Millstone, co-author of the report “A Food Brexit: Time To Get Real” and an obvious anti-Brexiteer made the case that outside the single market and customs union, food supplies and prices will be less predictable, and will be subject to tariff and exchange rate shifts.
If we are outside the customs union and subject to World Trade Organisation (WTO) rules, many of the benefits we take for granted now, such as improved environmental sustainability, and hygiene and food safety standards - internalised costs under EU standards will be in danger of being sidelined due to externalising of these costs under WTO rules. However, Millstone indicated that a race to the bottom as far as these attributes are concerned will be unacceptable to consumers who are used to some of the highest food safety and animal welfare standards globally.
Millstone went on to argue that until 2007 pre the financial crash; the UK had enjoyed some of the highest levels of food security ever, with food surpluses, ‘supermarketisation’ and over 60% self-sufficiency in food. However, post the 2008 crash and associated volatility in food production; food security has declined, producing occasional shortages of some items and rising food and energy costs. His argument is that Brexit ‘represents a serious challenge to the food system’ and will cause a continuation of the volatility and food insecurity we have seen post 2008.
This theme was continued by Terry Marsden, another co-author of the Food Brexit report, who indicated that a reduction in farms and processing facilities in the UK is leading to greater food insecurity, as well as some of the currently well-known issues around antimicrobial resistance in the food chain, herbicide resistance and the reduction of permitted chemicals in agricultural production, as well as dependence on food imports.
However removing ourselves from the constraints and bureaucracy of the EU food law system would give the UK the freedom to drive its own food system and policies that focus on UK needs such as self-sufficiency in produce including temperate fruit and vegetables and adherence to alternate benchmarks including the UN Sustainable Development goals and developing a more circular economy.
The session relating to staffing issues in the industry was questions and answers to an industry panel which included Meurig Raymond of the NFU, Andrew Keeble owner of Heck Sausages, Ufi Ibrahim of the British Hospitality Association, Caroline Drummond of LEAF and Carol Wagstaff, Director of the AFTP.
Both the hospitality and farming sectors rely heavily on seasonal and migrant workers, and are already feeling the effects of EU workers no longer finding the UK so attractive a place to work, as highlighted by Raymond of the NFU, who stated that there is already a drop of 29% in the number of seasonal workers. However due to the UK having, in effect, full employment, it remains very difficult to find UK based staff to fill the shortfall in the labour.
Another theme for the panel was raising productivity. Using the example of the ‘hands free hectare’, Wagstaff demonstrated that the cost of using the technology is currently costlier than the value of the crop harvested. She also explained that, as a prototype experiment, this is to be expected. Indeed, it is more pertinent to question not one of cost, but one of timing. That is, when is it likely that the use of this type of technology will become cost effective for most farmers? The Panel all agreed that industry needs to invest more in its staff but current inertia around Brexit indecision wasn’t helping in this regard and that food security will be at risk if parts of the industry collapse due to a lack of cost effective labour. Upskilling and developing existing staff is what the AFTP offers industry – opportunities for improving knowledge and the chance to transfer to new technical areas by retraining using AFTP courses.
Andrew Jarvis, the director of policy advisors ICF, gave further warnings regarding the UK’s post Brexit position with the EU when the UK would become rule takers rather than rule makers. We will no longer be able to exert the level of influence we currently do through lobbying, the disproportionate influence we have as part of the science base, expert committees and media.
A surprising report came from Tara McCarthy the head of Bord Bia, the Irish Food Board, who emphasised the trading relationship that Ireland currently enjoys with the UK. The UK is their largest overseas market, with 37% of the country’s exports finding their way to UK shoppers’ baskets. This includes 94% of Ireland’s mushroom exports and around 50% of their cheddar cheese. McCarthy painted a picture of real problems for Ireland’s cheddar producers who, because of the high tariffs associated with dairy products, would no longer be competitive in the UK market, and the French don’t eat cheddar cheese!
Another perspective was provided by Kevin Zwolinski head of Click on Logistics, a company providing consultancy in supply chain logistics and management. Zwolinski warned of the UK’s dependency on imported fresh produce. With around a 9:1 ratio of import vs export it would take several years for the UK to fill the gap left by a lack of EU imports of fresh produce from places such as southern Spain and the Netherlands by automation and alternate supplies. In addition to uncertainty around overall supply of fresh produce, the effects of tariffs and customs checks would lead to unimaginable delays at UK ports where currently less than 1% of vehicles are checked. For example, at Dover where 14,000 vehicles pass through each day; a two hour delay would result in around 1400 vehicles being held up which equates to a 28km snake of vehicles. If WTO regulations are implemented the UK could expect from 20-50% increase in physical vehicle checks being required depending on the commodity, and especially for fresh meat imports.
To balance all the negative sentiment, there was a briefing from Lord Robin Teverson - chair of the House of Lords Energy and Environment EU select sub-committee, who tried to provide a balanced view of Brexit with or without a deal. However, in line with the previous speakers, he did warn that the WTO tariffs relating to fresh foods are some of the highest, so a ‘no deal’ option could result in severe food price rises. A 0% tariff option would conversely result in food prices falling. He detailed the two positions currently put forward by different members of the government; on one hand - is the UK a free trader in a global market, as put forward by Liam Fox or, does it stand for high welfare standards and quality products as encouraged by Michael Gove. Teverson did finish with the warning that life is tough when negotiating free trade deals and there is no room for sentimentality or nostalgia.
The final voice in the room was that of Paul Temple – the one primary production speaker of the day. In line with the Horizon Brexit briefing report produced by the NFU and AHDB, Temple indicated that predictions show that whichever of the three predicted scenarios for Brexit (1. evolution, 2. unilateral liberalisation, 3. fortress UK) the top 25% of farming businesses will survive or thrive, with outcomes less clear depending on which of the AHDB scenarios take place for the remaining 75%.
Temple suggested that Brexit provides a huge opportunity for those farmers who embrace it; enabling livestock farmers to produce more of what people want, arable farmers to move to no till agriculture, which is better for soil health, and the farming community as a whole, to become closer to their customer base and understand better what the consumer really wants.
But, existing, long-standing problems in the farming sector need to be addressed for this to occur: improvements in the use of technology, young thinking and improvements in plant breeding, soil health and smarter farm management are all required for future success. UK farming will compete on the global stage where it faces stiff competition from livestock producers in Argentina, Australia and New Zealand and the arable giants in the US and Russia.
So, overall many areas of uncertainty still remain for the whole agrifood sector post March 2019. The audience was encouraged to plan for as many scenarios as possible and in the words of Theresa May’s political forebear Benjamin Disraeli, ‘prepare for the worst and hope for the best'.
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