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Brexit in agriculture special: The top trump cards yet to be played...

While the first round of Brexit negotiations were no game, Abi Kay looks at who has the upper hand in the new phase.


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Brexit in agriculture special: The top trump cards yet to be played...

With talks on the UK’s departure from the EU finally moving on to a future relationship, there are still some thorny issues which could trip up negotiators in the coming months.

 

Here are six of those top trump cards which are yet to be played...


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DEVOLUTION

DEVOLUTION

Because the UK Government has chosen to leave the single market and customs union, which are governed by EU rules, the first Brexit task for parliament is to make sure there is legal certainty for businesses on exit day.

 

This is what the EU Withdrawal Bill aims to do, by copying and pasting the full body of EU law into British law, except the Common Agricultural Policy (CAP), which will be replaced by a different piece of legislation.

 

Principle

 

Despite all the main parties supporting the principle of the EU Withdrawal Bill, its passage through Parliament has not been easy.

 

Key among the controversies has been the ‘power grab’ clause, which Scotland and Wales have objected to.

 

First Ministers Nicola Sturgeon and Carwyn Jones have threatened to derail the Bill as it prevents the devolved regions from passing new laws in areas which were previously the EU’s responsibility, such as agriculture.

 

Instead, those powers will reside with the UK Government – at least temporarily.

 

Though progress has been made on common frameworks, the Scottish and Welsh Governments claim there has not been enough movement for them to recommend their parliaments give consent to the Bill.

 

Nicola Sturgeon also hinted at future battles after the divorce deal was signed as she demanded Scotland be able to make use of any special arrangements agreed for Northern Ireland.

IRISH BORDER

IRISH BORDER

Questions over the Irish border and its implications for trade and the peace process are some of the most significant facing Brexit negotiators.

 

Animal products and fresh milk cross the border on a daily basis for processing and finishing and all the products are currently produced under uniform conditions which apply to farmers across the EU.

 

If a hard border were to be reintroduced, farmers would face additional costs and paperwork because of new customs checks, animal health requirements and food safety rules.

 

Deal

 

Early hopes of clinching a divorce deal in December were dashed after the Democratic Unionist Party objected to a draft text which said there would be ‘no regulatory divergence’ on the island of Ireland.

 

Though the wording of the deal was changed, it remains controversial.

 

In the revised agreement, the UK promised to ‘maintain full alignment with those rules of the internal market and customs union’ if a solution to the Irish border issue could not be agreed in a future EU-UK trade deal or by any other Ireland-specific technical means.

 

The Government insisted ‘full alignment’ meant common goals could be achieved through different regulatory means, but others have claimed it would be single market membership ‘in all but name’.

TRANSITION

TRANSITION

Now the terms of divorce have been settled, Brexit talks have moved on to a transitional deal.

 

The Government has proposed a transition period of two-years, during which the UK would remain in the customs union, allowing Britain to retain unfettered access to European markets.

 

International Trade Secretary Liam Fox said he wanted Britain to be able to negotiate free trade agreements during the transitional phase, despite being unable to sign them because of the common external tariff of the customs union.

 

Access

 

The NFU has called on Government to improve farming rules during transition, claiming the acceptance of EU rules to retain access to the single market ‘should not prevent the UK from looking to improve regulation’.

 

But there has been considerable confusion about whether farmers would continue to be bound by CAP rules during transition, with Defra appearing to keep the option on the table, while at the same time insisting the Agriculture Bill – which would begin the move to a different policy – would be published in spring.

 

Across the Channel, Ministers from other member states have slapped down UK plans to negotiate a bespoke transition period, suggesting time and effort would be better spent working on a future relationship.

'NO DEAL'

'NO DEAL'

One possible outcome of the Brexit talks, dreaded by some and hoped for by others, is the ‘no deal’ scenario.

 

The triggering of Article 50 makes Britain’s departure from the EU at 11pm on Friday, March 29, 2019, a legal reality regardless of whether or not the UK and EU have agreed future trade arrangements.

 

If they have not struck a deal by this point, Britain would leave the EU and fall back on to World Trade Organisation rules.

 

There have been wildly different predictions about what this would mean for the UK economy.

 

Evidence

 

Farming Minister George Eustice has claimed the agricultural industry would be ‘fine’ under such a scenario, and there was evidence to show most farmers, except those producing sheep and barley, would see a boost in prices.

 

Transport Secretary Chris Grayling also said a ‘no deal’ Brexit would give British farmers a chance to grow more food, but lack of investment and uncertainty over future immigration arrangements could prevent this from happening.

 

Other research from the University of Sussex warned a ‘no deal’ Brexit could leave the UK short of food, with a possible return to volatility in supply and prices not seen since the 1930s.

TRADE

TRADE

The Prime Minister has said she is looking for a ‘deep and special’ economic partnership with the EU.

 

In her Florence Speech in September, she explicitly rejected the idea of basing any future EU-UK trade agreement on European Economic Area membership or a Canada-style deal.

 

While she acknowledged the Canada deal was the most advanced the EU had negotiated, she said its terms would ‘restrict mutual market access’ and benefit neither the UK nor the EU economy.

 

Determination

 

But European diplomats have claimed a Canada-style trade agreement is the only option left on the table because of Britain’s determination to leave the single market, customs union and the jurisdiction of the European Court of Justice.

 

Trade in food would be considerably constrained by the quotas and plant health controls in a Canada-style deal and the NFU has said it was ‘not something which would suit our future trade relationship with the EU’.

 

Concern has also been raised about a potential US-UK trade agreement because of different American standards and US economies of scale.

 

The Trade Secretary has been keen to push for a deal, but his interventions in the area of food have forced Defra Secretary Michael Gove to step in and promise standards would not be diluted in the pursuit of any agreement.

DOMESTIC AGRICULTURAL POLICY

DOMESTIC AGRICULTURAL POLICY

IF the UK leaves the CAP during transition, which is said to be the Government’s plan, a new domestic policy would have to be put in place quickly.

 

Step forward the Agriculture Bill, which Ministers claim would come before Parliament in summer or autumn.

 

The Bill will give Government the power to make payments to farmers, with the Rural Payments Agency and Natural England continuing to administer the cash, but Farming Minister George Eustice said he also wanted it to prepare for future changes.

 

Changes

 

In November 2017, farmers were given a tantalising glimpse of the Government’s thinking on those policy changes by Mr Eustice.

 

Speaking at the Tenant Farmers’ Association (TFA) autumn conference, he said a simple agri-environment scheme, open to all farmers and with a strong focus on soil health and good husbandry, would lie at the heart of the new policy, with a wider package of measures to boost productivity and manage risk sitting alongside it.

 

A White Paper setting out these plans is planned to be published ‘early’ this year.

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