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The old Variable Premium Scheme is the best model for no-deal sheep sector support

If the Government announced sheep farmers would be supported by a scheme similar to the old Variable Premium now, it would maintain industry confidence over the coming months, says NSA chief executive Phil Stocker.

Surely this sorry state of indecision will end soon and we will either have a Brexit deal, or we won’t.

 

We should know in the next couple of months whether we have a transition period with an orderly withdrawal, albeit probably still full of indecision, or no deal and a sudden departure – with a lot of uncertainty.

 

Maybe very soon this first phase will be behind us – maybe.

 

We are far better prepared for a no-deal Brexit than we are led to believe by the media, and while Defra and the Department for International Trade have probably had the most to do, they are well-prepared with the aim of keeping trade and product flows continuing.

 

Does this mean everything will go smoothly? Well, I wouldn’t go that far.

 

Optimistic

 

Promises that a UK-EU trade agreement would be the easiest deal ever negotiated look optimistic.

 

We can only hope they are right, and we must do what is in our power to help, but it’s also right to prepare for the worst.

 

This is where contingency plans come in, and why organisations like the NSA spend a lot of time warning of worst-case scenarios.

 

It is not because we enjoy being prophets of doom, but because we need to drive home the risks of getting things wrong and make sure commitments are given to safeguard our food and farming industries.

 

By doing this work, we hope we can avoid things going wrong in the first place, and if they do ensure measures are in place to limit the damage.

 

Effort

 

You could argue it’s a lot of time and effort for what might not happen, but that’s just like no-deal planning.

 

We have been successful in getting verbal commitments, at least, that money will be there to protect our farming industry in the case of market collapse following a no-deal Brexit.

 

Nowhere has more support been promised than for our sheep sector. It may sound ungrateful, but as soon as money is mentioned, there are arguments about who gets it and how.

 

We must remember, though, that contingency planning should not be about income support handouts once things have gone wrong.

 

That does little to protect an industry working hard to improve its productivity.

 

Investment

 

Contingency support should be considered by Government and industry as an investment, particularly when we have had plenty of time to plan to avoid problems occurring in the first place, helping maintain the investments farmers, processors and others in the supply chain are already making.

 

Current Defra and devolved administration preferences are for a ewe headage payout following market difficulties as a result of a no-deal Brexit.

 

This is for reasons of simplicity, but also a laudable desire to make sure money goes to the lambing flocks.

 

However, on this basis, all lambing flocks will get the same money whether they have already sold into a strong market or a weak market after no deal.

 

Even worse, store lamb finishers who today are paying reasonable prices may get their fingers burnt, and with no breeding ewes will get no support at all.

 

Blunt

 

It’s a very blunt tool that will do nothing to give confidence or to avoid things going wrong in the first place.

 

A sudden no-deal departure from the EU will almost certainly bring desperate times for our sheep industry and no one knows for how long.

 

Desperate times require difficult and effective decisions, and if we lose viable access to the EU market, the most effective use of contingency money would be to invest it in a way that keeps that trade flowing viably for processors and producers, via something similar to the old Variable Premium Scheme which guaranteed returns.*

 

If this was announced now, it would result in confidence at the autumn sales and keep store and breeding stock prices up.

 

Preferable

 

Surely this is preferable to sitting back and allowing things to go wrong, and if we don’t have problems then it wouldn’t cost a penny.

 

Before he resigned in February, our Farming Minister George Eustice gave a commitment that in the case of no deal, our sheep industry would be supported to a level which would maintain its size, scale and nature.

 

Now he is back in his seat, this could be a real test of his understanding and commitment.

 

*This scheme operated by paying farmers the difference between an average price of lamb set over a number of reference years and the current market value.


Read More

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