Defra Secretary George Eustice’s claim that the sheep sector may not need no-deal support is a travesty, says Ceredigion Plaid Cymru MP Ben Lake.
A year ago, in the immediate aftermath of the UK General Election, the presidents of both the Farmers Union of Wales and NFU Cymru urged the UK Prime Minister to waste little time in negotiating a free trade agreement with the EU, and to avoid a situation where UK-EU trade was conducted on WTO terms.
Having just acquired a mammoth majority in Parliament, few could have imagined then that we would find ourselves on the brink of such a perilous situation.
Fewer still could have imagined that we would be so poorly prepared for an outcome that has become ominously imminent.
The consequences of trading on WTO terms have been well rehearsed these past 12 months.
Under WTO rules, the EU’s common external tariff will be applied to imports from Great Britain, meaning tariff rates as high as 48 per cent for chilled lamb carcasses and 65 per cent for fresh boneless beef.
Research by AHDB, Hybu Cig Cymru, and Quality Meat Scotland suggested prices could slump by 24 per cent if the UK were to trade with the EU on WTO terms.
In response to such sobering analysis, a lot of attention has been given to the different ways we could support the red meat sector in order to help it survive such a calamity, although it remains to be seen precisely what this support would entail.
While we hope for the best, the Government should have ensured it is prepared for the worst.
On the basis of recent statements, it would appear they have failed in this regard.
Given that we are less than a fortnight away from a potential no-deal exit, this lack of clarity on possible support measures is a cause for serious concern, but it was extremely alarming that the Secretary of State, George Eustice, seemed to suggest recently that the sheep sector may not need support.
Giving evidence to the Environment, Food and Rural Affairs Select Committee on December 8, the Secretary of State acknowledged no-deal tariffs would be a challenge to the sheep sector, but that ‘lamb prices are currently around 15 per cent higher than they were 12 months ago, and some 20 per cent higher than they were five years ago.’
It must be stressed that current high lamb prices cannot be guaranteed in a no-deal exit.
A combination of factors, including a weaker pound and the relative inflexibility of Australian and New Zealand suppliers to respond to the ever-changing European lockdown restrictions and associated demand shifts have meant Welsh lamb exports to countries such as Italy have increased significantly in recent months.
Crucially, this increase has occurred under our current terms of trade with the EU: a no-deal exit would introduce serious tariff and regulatory barriers to this trade.
Notwithstanding the fact that the buoyancy of current lamb prices is partly driven by strong exports to the EU, the most alarming aspect of the Secretary of State’s remarks was the suggestion that 2015 might be used as a reference when determining any sector support.
As any sheep farmer will know, 2015 was a unique and appalling year for lamb prices – the worst in living memory.
Judging whether the sheep sector needs support by comparing prices to a year when farm incomes were on the floor would be a travesty, and push farmers across Wales out of business.
At the time of writing, this outcome may still be avoided.
The UK Government and the EU have agreed to continue talks in the hope of securing an agreement on the future relationship.
We must all hope that negotiations succeed – even at this late hour – to avoid a no-deal outcome, which would deliver a heavy blow to farmers across the UK.
Ben can be found tweeting at @BenMLake