The effects of a no-deal Brexit and what you can do to prepare

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While the NFU is working on behalf of members to ensure the best Brexit for British farming, leaving without a deal could have significant impacts on British farm businesses. Here's how your arable business could be affected, what you can do to prepare and what the NFU is asking government to do in the event we do leave the EU without a deal.

John Pawsey, Chair of the Organic Forum says:

“It is vital the UK has recognition of UK standards from the EU. We understand the recognition process to be lengthy: UK certification bodies will be required to apply for European Commission approval, which can only commence after the UK leaves the EU and can take up to nine months. This would be catastrophic for the organic sector, which is worth £2.3bn (SA, 2018), with around 9% of organic sales being exported and the majority going to the EU.

Organic goods generally attract a higher premium than conventionally produced goods. It therefore follows if UK producers cannot export and market goods to the EU as organic, they will have to be sold in the UK at conventional prices. Given costs of production are higher for organic products; this will reduce the profitability of producing organic food and may make organic enterprises unviable. The inability to export these products to the EU would lead to a greater supply on the UK market, placing further downward pressure on organic prices domestically.

Organic dairy products are a key export and it is estimated that, should no access for organics be secured in a no-deal scenario to the EU and other export destinations, such as the United States, then around 50 million litres of organic milk will have to be absorbed back into the UK market. This is calculated to reduce every organic dairy producer's return by circa £15,000 (OMSCO, 2018).

It is vital that DEFRA and the EU commission listen to the asks of the NFU, to prevent these catastrophic impacts at farm level”.

Top three needs for the Organic sector

For Government and the EU Commission, to expedite the process of recognition when the UK gains third country status.
For the UK to continue to maintain equivalence with EU standards in the long term, for trade to be maintained.
For DEFRA to provide clarity on the labelling of organic products

What you can do

Members can ensure that they have close dialogue with packers/processors to understand:

What contingencies that business has in place, if they are impacted by a no deal Brexit
What is their forecast for production/sales.

Farm businesses should also try to understand what their contractual obligations are, click here to view the Contracts and Risk Management advice on the NFU Brexit Hub.

Published: 16/10/2019 at 10:58

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