An EU free trade deal that works for arable farmers and avoids undermining UK wheat production, a potential risk if a US trade deal allowing imports of white meat were agreed, is favoured by NFU Crops chairman Tom Bradshaw.
Reacting to the election result which saw the Conservative party win a majority of 80, Mr Bradshaw said: “We now know the direction of travel. The trade deal will be the most important part of leaving the EU. The central point is how close regulatory alignment is going to be with the EU.
“To maximise trade opportunities with the EU, alignment needs to be as close as possible. But for development of new breeding techniques and plant protection product regulation we need to have a different regulatory alignment. The key will be how divergent policies can be or how aligned.
“My preference would be to have a free trade agreement with Europe which would mean we have to stay closely aligned, but this means a trade deal with the US will be more difficult to achieve.”
Mr Bradshaw fears that a US trade deal could see cheap chicken and pork exported to the UK fed on lower cost US wheat which could see a reduction in demand for UK wheat for domestic pig and poultry production, a key feed wheat market.
“In the next month we will get a clearer idea of how hard ball the trade regulations with the European Union will be and how desperate the Government is to do US trade deals.”
If environmental parameters such as carbon emmissions are not included in trade deals, UK cereal production could be undermined, says Mr Bradshaw. “Today Boris Johnson said he wanted the UK to be a global leader in sustainability. This has to be taken into account in trade deals.”
Grain traders had already priced in the spike in Sterling following announcement of the election exit poll, according to ODA consultant Rupert Somerscales.
“The effect of the election result on wheat prices has been negligible.”
However, when trade negotiations begin after the predicted Brexit date of January 31, the pound is ‘unlikely to be in a happy environment during negotiations which could take 2-5 years’, said Mr Somerscales.
“While EU negotiations will take priority over those with other countries, there could be deals on the side with Australia, Canada and the US but the question is, do we have enough experienced trade negotiators to cope with more than one country at a time?”
The Crop Protection Association (CPA) has welcomed the clarity of the election results.
CPA CEO, Sarah Mukherjee said: “The new government has an opportunity to develop a joined-up approach to policymaking which ensures we balance the need to protect and enhance our natural environment, whilst supporting sustainable, productive agriculture.
“Simply aligning the UK to the EU rules would perpetuate the known problems which are likely to deteriorate further without UK participation. The UK would have little influence on future developments and would be vulnerable to challenge under global trade rules for adopting hazard rather than risk-based decisions.
“We are calling for ’Managed Divergence’ whereby existing regulatory approaches and environmental standards will be maintained and new developments monitored and implemented accordingly. The UK regulator is highly respected across the globe and is one of the few EU member states with a good track record of meeting deadlines.
“Our view is that, at present, whilst the current EU environmental regime could be workable, the politicisation of almost every recent decision on crop protection products delineates a trajectory that will ultimately lead to EU farmers losing access to most of the crop protection tools currently at their disposal. Ultimately, this will lead to the EU becoming uncompetitive and perhaps unable to provide a steady and reliable supply of safe, affordable food.”
Regarding crop protection, Hazel Doonan, head of crop protection and agronomy sector, Agricultural Industries Confederation said assuming the European Union Withdrawal Act takes the UK out of the European Union by January 31, it will then enter a transition period. “During this period we will have no input on what happens with crop protection regulation in Europe but will still be a recipient of the legislation. At the moment we don’t know what a trade deal would look like. We could still end up with no deal – it is not off the table.”