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Protecting EU trade trumps new trade deals for ag businesses

Tomas Pietrangeli, Arla UK managing director, said he could not see many opportunities for dairy in trade deals with countries such as New Zealand.


Alex   Black

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Protecting EU trade trumps new trade deals for ag businesses

Maintaining access to the single market was more important than striking trade deals with any other countries for agricultural businesses at the NFU conference - Businesses preparing for change event.

 

Asked whether what advice they would give to the Government on maintaining market access versus striking new trade deals with countries such as New Zealand, Australia and the US, Tomas Pietrangeli, Arla UK managing director highlighted 90 per cent of dairy exports were to the EU.


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“You can talk about the 10 per cent, it does not really matter until we get the 90 per cent right,” he said.

 

David Gunner, chief executive of Dovecote Park, highlighted those countries were all ‘massive agricultural exporters’.

 

“That is more of a threat than it is an opportunity.”

 

And imposing tariffs on exports to the EU could force Jordans Dorset Ryvita, the maker of Jordans cereals, Dorset cereals and Ryvita to move some of its production to the EU.

 

Exports

 

Chief executive Paul Murphy it was an increasingly export driven business with 42 per cent of products now going overseas.

 

He added they had also made plans to mechanise and would not be relying on unskilled labour anymore.

 

Businesses were also cautious on investing with the panel hearing farmers were waiting on making investments.

 

Sandfield Farms managing director Derek Wilkinson said he was glad his Sandfield Farms did not need any major decisions around infrastructure because of Brexit.

 

“If we had to, we would certainly be delaying it.”

Less than half know their cost of production

As few as one in five farmers knew their cost of production, it was claimed at the NFU conference.


The ’managing change and building financial resilience’ session looked at what farmers could be doing as a huge shake-up of subsidy loomed.


While several panelists and audience members suggested many farmers did not know their cost of production and were potentially ill-suited to make it through the Brexit turmoil, others suggested farmers were ready to weather the storm.


Neil Wilson, head of agriculture at HSBC, said: "Half of farmers do not borrow any money so they have no debt pressure. If they can come through Brexit, farmers will want to work with them to get to a point where they are cash generative businesses once again."

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