UK agricultural exports are facing the prospect of crippling EU tariffs from the end of this year, with the Government said to be ‘close to abandoning hope’ of reaching a trade deal with the bloc.
According to reports, the working assumption of the Government is now that the UK will exit the Brexit transition period at the end of December on World Trade Organisation (WTO) terms.
David Frost, the UK’s chief negotiator, also warned the country must accept the possibility of not reaching a deal after little progress was made on key sticking points in the latest round of talks this week.
This outcome would spell disaster for the sheep sector, which sends 97 per cent of its exports to the EU, and could force the Government to resurrect its £150m no-deal rescue plan for the sector, which was put together in 2019.
Hopes for a fast-track agreement with the USA have also been dashed, with both sides now agreeing nothing will be concluded this year due to wrangling over access to the UK market for American agriproducts.
The news came as York University professor Bob Doherty reiterated the importance of getting a UK-EU deal.
Speaking during a Farmers’ Union of Wales (FUW) seminar on supply chains at the virtual Royal Welsh Show, he said: “We import 30 per cent of our food from the EU, particularly fresh produce from southern Europe and ambient goods from other EU states.
“One of the lessons we need to learn from the pandemic is we need a very good EU trade deal.”
Concerns have also been raised about the readiness of the food sector for a WTO exit.
According to a new Institute for Government report, the Covid-19 crisis has left many businesses less prepared now than they were in the months leading up to a potential no-deal in October 2019.
NFU Brexit and international trade director Nick von Westenholz pointed out farmers were in an even trickier place than most because there is not much they can do to prepare.
“The impacts will be down the supply chain, so will be indirect and will primarily come through lower returns caused by extra friction and costs,” he said.
“There may also be a tightening of input supplies, so we suggest members make sure they have got sufficient stocks of important inputs.
“But the main advice is to focus on ensuring the business is resilient to withstanding negative effects on the wider economy.”
TFA chairman Mark Coulman also called on the Government to urgently provide more clarity on how farmers can prepare for post-Brexit policy changes.