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No-deal fears for Scots food and drink

A no-deal Brexit would be a disaster for Scottish agriculture and the food and drink sectors, a committee of MPs heard. 

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No-deal fears for Scots food and drink

Jonnie Hall, NFU Scotland policy director told Pete Wishart, chairman of the Trade and Foreign Investment inquiry into the effects of Brexit on Scotland, that for a small country with a population of under six million it was essential to look beyond Scotland’s borders for markets.

 

The consequences of moving to World Trade Organisation rules would be ’an absolute disaster’, he said.

 

“From everyone’s point of view it is important that all shoulders are to the wheel to get the Chequers deal over the line," added Mr Hall.

 

As regards future trade, complying with a common rule book with the EU was something the farming industry had long expected.


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“A bonfire of the regulations would be akin to shooting ourselves in both feet. The beef sector would be completely blown away by imports if there were no rules,” Mr Hall added.

 

Chequers

Theresa May’s Chequers deal or something very close to it was the best option of those that remained on the table.

 

James Withers, chief executive of Scotland Food and Drink, admitted it came behind staying in the single market with its four individual freedoms and a customs union but, if it survived the attention of the UK parliament and the EU, it would form a basis for going forward.

 

Reaching March 31 and moving into a transition period was vital. “It is the only safety net we can see,” he said.

 

Trade

Sarah Baker, strategic insight manager, AHDB said: “Any deal that achieves free trade with the EU will have the least impact on farming. The further away we move from the single market the more friction there will be in our trade.”

 

Mr Hall added: “Remember trade is a two-way street, especially with Ireland. Around 42 per cent of Irish food exports are to the UK and we are an important market for other EU Member States.”

 

The WTO option

Moving to WTO rules with common external tariffs could open up opportunities for some, said Sarah Baker, with imports being substituted by home production especially in areas such as pork, dairy and potatoes.

“It is not simple though. For pork, it is a question of carcase balance with fifth quarter markets being elsewhere," she added.

 

"Potato import substation would mainly be in processed products.”

 

There was a real threat to the exports of Scottish seed potatoes. Currently, these were shipped to non-EU countries under EU preferential rules.

 

Without these a WTO tariff of over 40 per cent would apply, killing off the trade completely.

 

Agricultural support

Mr Hall could see agricultural support becoming more important under a hard or no-deal Brexit.

 

“If conditions become really tough, governments here would need to decide whether they want 18,000 farm businesses or whether they would be happy to see only 10,000 remaining. Think of the social impact that would have.”

Evidence givers:

  • Jonnie Hall, NFU Scotland policy director
  • Sarah Baker, AHDB strategic insight manager
  • James Withers, chief executive of Scotland Food and Drink
  • Cat Hay, policy manager, Food and Drink Federation Scotland

Ms Baker added: “AHDB work shows the top 25 per cent of farms would remain viable under most scenarios but a big chunk would need support. Remember too that uncertainty is the enemy of investment.”

 

No-deal contingency

All the witnesses agreed the UK Government’s recently-released advisory notices added little to what was already known.

 

Cat Hay warned the food and farming industry to note the position of the organic sector where there could be at least a nine-month gap between a no-deal Brexit and the creation of new certification schemes.

 

This could be fatal for some businesses.

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