Preparing your farming business for the end of the transition period

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The Brexit transition period expires on 31 December. Talks are continuing over a trade deal with the EU and there is still uncertainty over exactly what the impacts will be on farm businesses. Whether the UK gets a deal or not, there will be changes that are likely to affect your business even if you don’t trade directly with the EU.

The NFU continues to work to highlight areas of concern for all sectors to government and make the case for steps to be taken to minimise the potential impacts on farming. But only you know your business well enough to identify how the changes that will occur from 1 January might impact your farming operations.

As part of your preparations, this checklist will help you identify your business risks and the level of exposure you have to the EU market.

Contracts

Think about your contracts. Have you entered into any contracts with parties supplying you inputs and outputs? If so, it will be important to understand who will be liable for any extra cost (especially if you have already agreed a price) or other compensation if, for any reason, you or your supplier fail to meet your obligations as a result of the end of transition.

Managing the financial risk

If no deal is agreed with the EU, a disruptive end to the transition period could impact the financial health of other businesses in your supply chain. It is important for you to consider how you might protect your business from these risks. This might include:

  • Being wary of releasing large quantities of produce to a buyer if you suspect there will be problems in collecting what you are owed.
  • Considering asking for payment at the point of order or delivery.
  • Thinking about selling produce to a number of different buyers to reduce the risk to your business in the event that one or more of your buyers fail to pay you on time and/or become insolvent.

Inputs

  • Think about your inputs - for example, feed, fertilisers, veterinary medicines, plant protection products, machinery purchases, machinery parts, and service agreements.
  • When do you need or use these inputs? Does that coincide with the period around the end of the transition period? Could there be disruption as a result of this?
  • Where do these inputs come from? Are they manufactured in the UK, the EU, or do they come from a third country such as China or the USA?
  • If they are imported into the UK, talk to your supplier to understand whether they anticipate any delays or increases in prices - for example, if duties are applied at the border or if there are delays of consignments.

Outputs

  • Think about your outputs - for example, if you are exporting live animals, selling livestock to abattoirs, grain to merchants, or fruit or vegetables, or other products, that may be destined for the EU or Northern Irish market.

Do you know where your product is going?

  • Has your buyer given any indications or guarantees over their ability to keep taking product to send to this destination?
  • If you are sending product directly to a customer in Northern Ireland or within the EU, have you considered what new requirements there will be? Speak to your plant health officer or APHA to understand some of these requirements.
  • There will be new customs procedures in place from 1 January 2021. Have you prepared your business for the new HMRC and EU customs procedures? Visit the government’s Check, Change, Go website to find out more.

Further help and advice:

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