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Farmers must spend time on no-deal contingency planning now

A no-deal Brexit could happen at a busy time, with crops needing to be drilled and lambs being born, so farmers must spend time on contingency planning now, says Susan Twining, chief land use adviser at the CLA.

The clock is ticking towards a no-deal Brexit, and while a solution may be found between now and 29 March that means the UK leaves the EU with a deal, the threat of a no-deal outcome is one farmers and landowners must be aware of and preparing for.

 

The CLA has been clear a no-deal Brexit would be the worst outcome for food and farming, leading to immediate export tariffs with our biggest trading partner and significant uncertainty across the countryside.

 

However, given the current political brinkmanship, it makes sense for businesses to consider what a no-deal might mean for their business and take actions to minimise the impacts.

 

Last week, CLA President Tim Breitmeyer and I met Defra Minister David Rutley, who is in charge of no-deal preparation in Defra.

 

Urged

 

We urged him to provide the industry with further information on the UK Government’s plans for the rural economy in the event of no deal.

 

Information on tariff rates and relevant contingency planning is needed now to make sure businesses have time to form their own plans for how to deal with what would undoubtedly be a tumultuous situation.

 

Meanwhile individual businesses must make their own contingency plans. Even if they are based on limited information, it is better to have thought through the issues and possible actions they could take in advance.

 

The Government has published a series of technical notes to advise businesses on the implications of a no-deal outcome, with some reassurances for farmers around continuing payments via the Basic Payment Scheme (BPS).

 

Practical

 

However, frustratingly there is no practical guidance on how businesses might be affected by changes in exchange rates and tariffs, timescales of likely trade deals, and possible impacts on inflation and interest rates.

 

Finally, there are no guarantees the Government will step in to support the industry, and if it does what form that will take.

 

There are many moving parts and lots of dependencies, but businesses should plot out some potential scenarios to identify the critical issues both practically and financially.

 

This could be about, for example, having enough feed or grazing if livestock can’t be sold.

 

Testing

 

Financial stress testing should consider the impacts of what will happen if there are significant drops in market prices or if there is an increase in costs.

 

This will help crystallise any need to change short-term plans to protect the business through what might be a volatile time.

 

A no-deal Brexit would happen at a busy time for farmers, with crops still needing to be drilled and lambs being born, so spending time on contingency planning now, however imperfect, will help to minimise the disruption and any adverse impact on business.

 

Susan can be found tweeting at @susantwining2

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