The single market goes far deeper than tariff free trade as far as farmers are concerned, according to Defra Secretary Liz Truss, who said it also provides added security in areas like animal health.
Leaving the European Union could result in damaging trade restrictions being placed on UK farmers in the event of animal disease outbreaks, Defra Secretary Liz Truss has warned.
In an interview outlining her pro-EU stance ahead of the June referendum, Mrs Truss repeatedly stated the importance to UK farmers of retaining access to the single market, which she stressed went way beyond tariff-free trade.
She said: “Sixty per cent of all our food and drink exports are to the EU. It is even higher for some of our agricultural products, for example, 97 per cent of lamb exports, 92 per cent beef, 67 per cent grain and it’s very high for dairy as well.
“It is so high because agriculture tends to be a highly protected area throughout the world and it is difficult to get into agricultural markets.
“For example, BSE has blocked us from being in markets such as the US for 20 years and we have not yet got beef and lamb into the Chinese market. There are non-tariff barriers such as health rules and certificates.
“This is why the EU market is so important, but it is also a secure market.”
She cited recent avian flu outbreaks, such as one on a duck breeding farm Driffield in 2014, during which, because of common rules on animal health, EU markets stayed open except for the restriction zones around the outbreaks.
“We had to stop exporting to South Africa, Thailand and China, which, over a period of seven months, cost our poultry businesses £30 million,” Mrs Truss said.
“The single market is deeper than just a free-trade area," she added.
"We share mutually agreed standards on animal health and labelling and our Chief Veterinary Officer gets to sit on EU committees to exchange information and agree common strategies on disease threats, such as bluetongue.”
A vote to leave on June 23 could therefore open the possibility of costly trade bans and restrictions in the event of disease outbreaks or when UK standards were deemed to have fallen out of line with EU standards, said Mrs Truss, suggesting the UK could be political whims of member states.
Leave campaigners, including Farming Minister George Eustice, have argued rolling forward something similar to current single market access would be relatively straightforward post-Brexit, partly because the rest of the EU would not want to jeopardise its own access to the lucrative UK market.
Mrs Truss dismissed the suggestion, pointing out, across all goods, the UK accounts for only 7 per cent of EU exports, compared with 44 per cent of UK exports going the other way.
She said any new deal would have to be negotiated with the remaining EU member states, which would have different priorities to the UK. The renegotiation could go way beyond the officially allotted two years, during which UK exports to the EU could face heavy tariffs, she said.
Challenged on whether the Government’s refusal to come up with a ‘Plan B’ was a policy intended to spread a ‘fear of the unknown’ among farmers, Mrs Truss said leaving the EU would inevitably create uncertainty.
Any Plan B the Government presented at this stage would largely amount to ‘speculation’.
“There is going to be uncertainty when you have to negotiate with 27 other countries. That is why it is a leap in the dark,” she said.
Mrs Truss said: “Nobody can make any guarantees about what a deal would be like, so there would be more uncertainty about trade compared with the arrangements we have now.
“There is not a single country which is not a full member of the EU which has that access on agriculture, in particular.”
She pointed out Norway and Switzerland, which have access the EU market as part of the European Free Trade Association, still have to pay tariffs on exports to the EU and pay into EU coffers, as well as complying with EU regulation.
Yet they are not part of the decision-making process on regulations and labelling and have no seat on, for example, the monthly veterinary meetings, Mrs Truss said.
“It is simply a more distant relationship,” she said
Mrs Truss was less forthcoming about how a UK Government might replace the Common Agriculture Policy (CAP) and whether current CAP support would run until 2020 in the event of Brexit, saying she ‘did not have a crystal ball’.
Asked whether, as Farming Minister George Eustice has suggested, the Government could afford a £2 billion support policy more targeted to UK needs, she said she wanted to see further reform of the CAP to simplify its rules.
Mrs Truss said: “Much of the debate has focused on CAP, but the point I am making is, we should not take trade for granted, something which is worth £11bn.”
Mr Truss said she had been ‘totally assured’ the Rural Payments Agency (RPA) is on course to deliver ‘almost all’ outstanding Basic Payments Scheme payments in England by the end of this month.
She visited the RPA’S head offices in Reading last Thursday to ‘assure myself progress was being made’.
She said the current batches were the ‘more complex cases’ but new systems have been implemented to cope with the workload.
“I have seen the figures and I was totally assured we are going get to ‘almost all’ by the end of March,” she said.