BITTERSWEET BREXIT

July 20 'No Deal' is looking more likely again, as we pass the date to extend transition, where the 'oven ready deal' seems to have burnt out, and the government don't seem bothered. UK retailers warn shoppers face price hikes if no EU trade deal agreed.

"Under the UK government’s tariff schedule, which would apply from the beginning of next year if an EU trade deal is not agreed, 85 per cent of food imported from the bloc will face tariffs of more than five per cent. This includes 48 per cent on beef mince, 16 per cent on cucumbers, and 57 per cent on cheddar cheese, the BRC said. The average tariff of food imported from the EU would be more than 20 per cent. "

July 20 100 Company leaders warn government about No deal "One of the first cross-industry efforts since the onset of Covid-19 to exert pressure on UK government negotiators to strike a business-friendly EU trade deal. 'The government must now deliver for us all, and on their promise to get a good deal, not a bad deal, and definitely not a no deal'”.

Go bust

Oct '19 Half of our farms will go bust with 'No Deal' warn NFU "A deadly cocktail of immediate tariffs, border checks, increased red tape and cheaper food imports from outside the EU will result in the “decimation of UK farming”. A new group 'Farmers for a People's Vote' launched with the NFU’s ex-chief economist, the founder of an organisation of female farmers called Ladies in Beef and the director of Farmers First, bringing together nearly 3,000 operators from across the UK. It is impossible to know just ow many would go down the land, but "What we do know is that over 40 per cent of them will have no net income if the basic payment is removed." Study details

"The prime minister is considering proposals to buy up excess lamb and beef – at an eye-watering annual cost of £500m – with most likely to be culled in the absence of alternatives."

'Civil unrest possible in rural Wales after no-deal Brexit'

Why - when the NFU Council voted 'overwhelmingly' to 'Remain' during the Referendum - did they not campaign for that?

"Grain farmers face an additional pressure: if the UK leaves the EU without a deal at the end of the year, a tariff regime would spell disaster for farm exports. For that reason, many will want to sell their barley crop before the end of December, which may mean having to accept lower prices."

Go bust

Food Supplies

Government Tariff plans

Farms

Tariffs (explained)

Why will lamb be hit hardest?

Lamb farms to the slaughter

Perfect Ingredients for food chaos

On the move

Consequences

No Deal for Farm & Food:

Food Supplies

Michael Gove claims that fresh food supplies won’t be hit by a no-deal Brexit are “categorically untrue”, the trade body for UK retailers said (Sept 1)

The cabinet minister (Gove) responsible for the UK’s preparations for no-deal gave an interview to the BBC on Sunday, saying “there will be no shortages of fresh food” if Britain crashes out of the bloc on October 31.

The British Retail Consortium (BRC) said it had been “crystal clear” with government in saying that was not the case.

Why experts are expecting food shortages (Aug '19). Government is secretly preparing for major disruption to imports and price increases on some foods.

But Defra refuses (Sept 12) to give details on no-deal Brexit food supply disruptions. FOI request from Green MP Caroline Lucas denied on grounds it would threaten EU negotiations.

As likelihood of 'No Deal' increases - because all cabinet Ministers have sworn to back 'No Deal' - preparations are increasingly important.

Leaked Yellowhammer document says won't be shortage, although trouble with some ingredients, but will reduce availability and choice.

'Incoming ministers in Boris Johnson’s administration are being told that unless they can pass specific new laws through a hostile House of Commons, the UK will have no legal basis on which to levy protective tariffs in the event of a no deal. "

Remember we have 2000 of them for farm goods, and a further 15000 for foodstuffs like biscuits cakes and pies. In March 2019 In event of 'no deal' government plan to slash 80% tariffs, including those on many finished food products (pies, cakes, biscuits etc) and some farm produce including cereals. Sheep will retain its tariffs (100% of MFN taxes), Beef around 50%, but Cheddar like cheese only 13%. But according to this new advice, they cannot levy any taxes in incoming food and farmstuffs.

Government Tariff plans

March 2019 In event of 'no deal' government plan to slash 80% tariffs, including those on many finished food products (pies, cakes, biscuits etc) and some farm produce including cereals. Sheep will retain its tariffs (100% of MFN taxes) Beef around 50%, but Cheddar like cheese only 13%. Details and farmers reaction here. How on earth were these figures arrived at?????

New DEFRA Secretary Villiers says to Select Committee " an announcement on any possible reforms to the tariffs would be made ‘shortly’, while Michael Gove told Parliament’s Brexit committee he wanted the new schedule to be published before October 14. Villiers also confirms there wont be much change to the tariffs published in March. National Pig Association urged Villers to ditch recently confirmed 'no deal' tariff of 4% (cf present 45%) on imported pork, claiming it "would force UK producers out of business and result in ever more imports".

The Defra Secretary also confirmed Ministers would be able to make quick changes to tariff rates if they caused problems. She said: “There will be an emergency review mechanism within the tariff schedule, so if we feel there is unfair or excessive market disruption as a result of the no-deal tariff schedule, we have the option to make amendments prior to the six or 12-month period where the formal review has taken place.”

NFU chief Brexit and international trade adviser Gail Soutar told Farmers Guardian the emergency review mechanism would offer ‘much-needed flexibility’, but suggested more detail was required.

NFU June 2019 on 'No deal' '"We feel no deal is really bad for our industry and we had a snapshot when they published the tariff schedule and it was very clear and of huge significance for this area. “Horticulture was left out with no tariff protection, eggs were left out with no tariff protection, and the entire arable sector, which should be able to demand reciprocal tariffs, was left out; in the first year alone you would see a £300 million price tag with no tariffs on the arable sector."

And that is ignoring the tariffs which will remain - on beef and sheep meat, going TO the EU.

No Deal' would hit food sector hardest "because it is the sector with the highest tariffs and some of the most onerous regulations — with perishable goods vulnerable to brief delays. "

"The food implications for consumers and public health of a no-deal Brexit are seeping out of government but deserve full scrutiny" "Earlier this year, a leaked memorandum to cabinet ministers by Sir Mark Sedwill, the head of the civil service and National Security Adviser, indicated that food prices in the UK could rise by up to 10% and there would be disruptions to fresh produce supplies." It is healthy food that is likely to be hit hardest. Lang in the Lancet.

Dept of Education 'officially sensitive' document says "Schools may have to close, exams could be disrupted and fresh food for pupils’ meals could run short because of panic buying with prices soaring by up to 20% in event of 'No deal'. Sept Minister tells schools to explain for food stockpiling in event of 'no deal'.

Gove (June 2019) admits farmers may never recover from bad/no deal, particularly livestock and hill farmers

Government stands down 6000 staff now 'No Deal' off till October.

DEFRA was the second biggest spender. "Only two weeks ago it was still recruiting in the US for new staff. In February it emerged that it had turned to the private sector for a gold command centre in Whitehall that could stay open “potentially for two years. The emergency control centre was to have a team of officers producing briefing notes for ministers and checking for emerging urgent policy changes."

Online shoppers face rationing "Supermarket websites are planning to introduce restrictions amid claims shelves will be empty within five days of a no-deal". Some are drawing up plans to restrict the quantities of some goods that can be ordered online in an effort to stop consumers stockpiling.

Holiday makers banned from taking Cornish pasties to Europe. "“Any animal based product you will not want to put into your luggage. No import of any ham, sausage or other delicacies. that’s the end of that”, said the official.
'Retailers worried about looting Tesco 'tough enough without no deal'
"Grocers are going to extreme lengths to prepare for a no-deal Brexit, including stockpiling non-perishable goods, lowering their quality standards and beefing up security to protect supply chains, stores and staff,
Retailers are taking “extraordinary measures” to prepare for the chaos they fear could ensue due to disruption in the UK’s food supply, according to a report from the consumer insights group Kantar" who also say " Shoppers are already showing signs of concern; the ‘recessionary behaviours’ previously identified after the 2008 recession. Slowing of out of home eating and drinking growth, plateauing of purchases of health food categories, more snacking, and an increase in packed lunches all show that shoppers are nervous."
Jeremy Hunt Tory contender promises to put aside £6 billion for fish and farm industries "The foreign secretary will seek to reassure the “sheep farmer in Shropshire” and the “fishermen in Peterhead”. The money is " designed to soften the blow from any trading changes such as the introduction of tariffs and delays at borders. " Tim Farron says this proves what a catastrophe Brexit would be and that at last a Tory has been honest abiut the consequences fro farming.

Farms

Government Guidance to Farmers in event of 'No Deal'"I want to urge all farmers to familiarise themselves with the guidance and understand what a ‘nodeal’ Brexit could mean for them. "
"On exports to the EU, there is important information on the new process for Export Health Certificates (EHCs) that businesses will need to apply for in advance" and to make sure they go through a border inspection.
"When it comes to labour, farmers will still be able to access and employ seasonal workers from the EU in the event of no-deal until at least December 2020, helping to meet demand for those busy summer months."
'No deal makes UK farms more competitive says new study

Parliament votes - BY ONE VOTE - to legislate against 'No Deal' (April 4 '19).

OK if you shop at Aldi & Lidl! According to a Brexit supporter they would be OK, as these shops are German, they won't have any problems with supplies, as it will come straight from Germany!
Various obscure pieces of trade law have taken on mythical status, one being Article 24 of the General Agreement on Tariffs and Trade (Gatt). Supporters of a no-deal Brexit say it would allow the UK to continue to trade with the EU without tariffs (taxes on goods crossing borders) for up to 10 years, while the two sides negotiated a permanent future trade agreement. BUT you need a trade agreement in order to make use of Article 24, and the EU would be under no obligation to agree anything with the UK in the aftermath of a no-deal Brexit.

Gove utterly clear about consequences for farmers of 'No Deal'.

With 'no deal', overnight there would be tariff walls either side of the British Channel. That is the default position, unless we want to alter our tariffs. But the EU are not going to alter their's, So we would face tariffs of 30+% when selling lamb to the EU - at present over 90% of our export market. And when the tariffs have been sorted, there are the non-tariff barriers.

Don't let 'No Deal' mean 'No meal' say Sustain

Hill Farmers out of business Professor @Cumbria Uni argues" tariff difficulties from a no-deal would cause “acute levels of hardship” - despite the Government saying it would, until 2022, provide funds to farmers in place of the EUs CAP subsidy.
A 'no deal' would put me out of business. "The animals are content and the farmers are working hard. Everything should be fine, but there is a big, dark cloud lurking on the horizon: the possibility of a no-deal Brexit...We need real blue-sky thinking, not the black clouds of a no-deal Brexit."

Catastrophic according to NFU

Tariffs (explained)

UK imports from EU face '£9bn tariff bill'.

"Government is expected next week to spell out its plan to mitigate a potential £9bn food-price shock from a no-deal Brexit, as analysts predict the cost of staples such as beef, cheddar cheese and tomatoes could soar."
Retailers warn 40% tariffs in event of no deal, leading to vegetable shortages and higher prices.Jan Ministers quietly planning to do away with tariffs in event of no-deal.
Feb '19 Gove promises that UK will apply tariffs in event of 'No Deal'. The government will apply tariffs to food imports to protect British farmers.But barley is up for debate . Brewing barley futures doing badly as no EU country forward buying UK brewing barley (the top class) if it is going to be hit for ca £100/ton tariff into EU. At present it's price is same as animal feed.
Food Retail Sector faces £9.3 Billion Bill for 'no deal' Brexit, according to Barclays. "Food retailers would be affected by a new average tariff of 27% on food and drink goods entering from the EU, significantly more than the 3-4% levy that would hit non-food products. Additionally, every consignment of goods from the EU will require a customs declaration which starts at a minimum of £50." Will somebody tell Tim Martin?

Why will lamb be hit hardest?

4 reasons.

1) Subsidies - upon which sheep farmers depend - more than anybody, are guaranteed for a few years, but nothing in terms of long term planning.

2) Tariff on sheep coming in - in immediate aftermath, will stay at 100% of its present value, according Government Guide of 1500 pages. While that sounds OK, there is also the matter of quotas - amount allowed in before tax kicks in. New Zealand have deal with EU to have quota of 228,000 tonnes sheep meat, of which UK takes 45%. How will this quota be sorted out? NZ meat representative said they "will be disadvantaged if London and Brussels carry through a threat to divide the quota 50:50 between the UK and EU, as will loose flexibility" and “The biggest risk we have is the situation of a no deal with no transition period.”

3) Tariff on UK sheep exports. Far and away most of our these exports go to the EU - around 97%. Compared to EU £400k market only £5m go outside EU. Talk of deal with Japan..who in same period bought £4000 worth. This will be killer, as cant see France wanting to reduce tariffs, forcing us to eat a lot more of our own - if not being undermined by NZ quotas with tax fee imports.

4) Standards. Many people are saying we'll keep standards of health, safety, welfare and the environment. They forget the reason we have those is so we can trade in the biggest market - protected from outsiders who do not have the same standards. Outside EU, we will not have that protected market that nakes it worth investing in the standards. While some say they want to maintain standards, there are loads happy to get rid of them. And there can be no inspection police force - as they are only standards - not laws.

Possible cull of 10m lambs

"These may have to be slaughtered and then buried or burnt, rather than eaten, in the event of a no-deal Brexit, government officials have told farmers.
This is because UK lamb may be banned from sale to the EU from March 30 under meat hygiene rules applied to non-EU countries. If exports are allowed to continue, they would face tariffs of 45%."

"There is a paper at the moment in Defra setting out a plan for slaughtering a third of all British sheep in order to maintain the integrity of the market. That is an inevitable consequence of a high tariff obstructing British exports". Vince Cable Yorkshire Post Jan 19

Lamb farms to the slaughter

"We have the problem that if we leave the European Union with no deal, on WTO terms, the EU’s tariffs on dairy products, lamb and various other items, which are quite high, immediately kick in. The problem with that, as we discovered when we had the foot-and-mouth epidemic, is that if we cannot export, prices crash. The only logical response from the farming industry, in order to maintain the value of the stock, is to slaughter large herds. This will happen.

"On WTO rules"..But

2 insurmountable Hurdles. "The UK must produce its own schedule covering both services and each of the 5,000-plus product lines covered in the WTO agreement and get it agreed by all the 163 WTO states in the remaining parliament. A number of states have already raised objections to the UK’s draft schedule - 20 over goods and three over services."
"The sheer volume of domestic legislation that would need to be passed before being able to trade under WTO rules: there are nine statutes and 600 statutory instruments that would need to be adopted. The government cannot simply cut and paste the 120,000 EU statutes into UK law and then make changes to them gradually".
Oh - and we are not in the WTO, other than as member of EU, so have to apply to join and that could take considerable time (according to WTO Director).

British food stores ridicule idea of Brexit stockpiling plans, saying "they have had no contact with the government about stockpiling". One supermarket chief said: "the government’s position demonstrated “complete naivety” about the way the sector worked."

Run on food

Brexit could mean a return to rationing Britain is facing the prospect of food rationing because of shortages as a result of Brexit, Prof Tim Lang in a bombshell report has warned. He says insufficient supplies after the UK leaves the European Union could see the government forced to adopt a measure last used during the Second World War and the post-war era. Lang said the UK is currently less prepared for rationing than it was in 1939 as planning had started three years earlier by Sir William Beveridge ahead of the build-up to the conflict. The Government is “sleepwalking” into a post-Brexit future of insecure, unsafe and increasingly expensive food supplies,
Raab reveals reality of 'no deal' by admitting stock piling food. Government will have to handle possibility of panic buying."The onus on stockpiling will fall on retailers, just as the bulk of no deal preparation will actually be done by private agencies. But the revelation is in reality no revelation at all: the United Kingdom is nowhere near being self-sufficient in food and in the event of a collapse in Britain’s trading arrangements, food, medicines and other vital supplies would run out very quickly indeed. " May says to 'to take comfort' from plans to stockpile food as “we don’t know what the outcome is going to be”. " But where are we going to put it, with so little warehouse space?
Head of Premier Foods, the Kipling cake manufacturer says: "“Smart companies will have worked out where the pinch points are with ingredients and be building up inventory". The head of Food & Drink Federation says food manufacturers have two main concerns. " One is getting product in through ports around the Brexit date, so that you can continue to manufacture. The other concern is — what will happen to the price of ingredients? “If there’s no deal, you’d expect sterling to tank, so people are trying to hedge against those concerns by storing ingredients like spices that can be kept in dry storage, as well as chilled and frozen food, although there is a shortage of chilled and frozen warehousing in the south of England.”

Premier foods spending £10 m on stockpiling ingredients for their Kipling Cakes, Bisto and Oxo. It said it was “shortly” to begin building up stocks of raw materials “in the absence of certainty over the arrangements for the UK’s departure from the EU”.

Hospital Food at risk from 'No deal'. Hospitals could run out of much of the imported food that goes into millions of patient meals in the event of a no-deal Brexit, the Department of Health and Social Care admitted in a letter to all NHS trusts in Englan, saying contingency plans are being put into operation. About 40% of food provided to in-patients was imported from the EU, much of it “just-in-time” .

"In the event of a no-deal Brexit, it is possible that the British government may try to ease the rise in food prices by lowering tariffs on products from the European Union that are not grown in Britain. Citrus fruits, like oranges, would be candidates. This would limit some of the pressure on prices", said Dmitry Grozoubinski, a former trade negotiator at the World Trade Organization.

Crashing Out

The possibility of a 'no deal' is becoming more likely as we get closer to the March 29 2019 without a deal. 'Crashing out would mean that overnight, all the tariffs (2000 different taxes for agricultural products and 15,000 for processed foods), would still surround the EU, protecting their farm and food producers.
Whereas we now have the same tariff walls round all of us in EU. Coming out with 'no deal' means there would be tariff walls (for around 2000 farm-stuffs and 15000 food stuffs) on either side of the Channel/Irish Border. And that is just the tariffs - there are the non-tariff barriers (health) to consider too. Some say this is a good opportunity to do away with all these tariffs, but the impacts would be monumental and should be the subject of massive debate.
Welsh Show, Farm leaders lining up to warn about 'No deal'. “We might just accidentally fall off a really severe cliff edge because we do not have a deal,” Click graphic for more.
PM at the WELSH show promises "The UK will maintain environmental protections, safeguard animal welfare and support the production of high quality food" - for ENGLAND.
Priti Patel first said a no deal may be worse fro Ireland than UK, then said possible food shortages in Ireland, in the event of no deal, may focus their minds and help sort out with the 'backstop'. While she said this was quoted out of context, others saw it as a throwback to the infamous days of the Irish Famine. Some have pointed out that 'food as a weapon' - espoused by the US Secretary of State Earl Butz, is illegal under international law. No deal - according to DEFRA - increases risk of food fraud and smuggling

Fishing

Fishing industry 'may not survive' No Deal Brexit says Director of British Fishing Company. While many fisher folk "are still strongly for Brexit, the people who run the companies have warned that disruption caused by a no-deal Brexit could destroy the industry. "Government farm payments in event of 'No deal' adds nothing new Fisher people will have to have catch and export health certificates and much more.
UK would run out food a year from now with no deal Brexit says NFU

The bird, whose call sounds like “a little bit of bread and no cheese”, is a handy precis of the UK’s post-Brexit food rationing policy.

No Problem

Many Brexiteers say that 'no deal' is not a problem as we can get on doing deals elsewhere. Not so easy - see Globalisation for our exclusion from £1.7 TRILLION's worth of trade.
Liam Fox says that a 'No Deal' is 60:40 likely (July 18). This is the same Liam Fox that said that a UK-EU deal would be 'one of the easiest in human history'' (July 17). This is part of new (July) PM plant to blame the EU for any trade deal breakdown.
CLA (Country Landowners Association) statement about government's 'No deal' advice that takes in organic produce, rural development funding and trading.
NFU says 'No deal' would be catastrophic' for British Agriculture
Government 'doomsday' report says: "The supermarkets in Cornwall and Scotland will run out of food within a couple of days" - and that is not the 'Armageddon scenario'.

No Food

Were we to leave without a deal there couldn’t be a worse time than 29 March, unless you like woody swedes and sprouting potatoes. A 'leave‑backing former cabinet minister' recently stated: “We won’t be able to get certain foods like bananas or tomatoes but it’s not like we won’t be able to eat. And we’ll be leaving at a time when British produce is beginning to come into season so it’s the best possible time to leave with no deal.”
The said Minister clearly doesn't understand that the months April-May are the 'hungry gap' when local vegetables have finished, waiting new salad crops in June. Oh and 99% of our bananas come from outside the EU. As far as food provision we couldn't pick a worse time to leave.

Perfect Ingredients for food chaos

No deal' disastrous for food firms "A no-deal outcome would have a "seismic impact", said the Business, Energy and Industrial Strategy committee. An EU free trade deal should be the number one priority, the MPs said. "To ensure the continued success of our food and drinks industry, the government must provide clarity and certainty on our future relationship with the EU and seek continued regulatory, standards, and trading alignment with the EU in the processed food and drink sector." ie stay in.
Perfect ingredients for national food crisis. Hallf our food "comes from abroad, and most of that is in the form of ingredients to be turned into the foods we eventually eat. It arrives just in time to be used, after which the finished goods are immediately dispatched. “I don’t think the government understands that,” the head of the Food & Drink Federation said. "We suggested to government months ago that we should talk about contingency planning, but we haven’t yet had the conversation.”
In Jay Raynor's article Will our cupboards be bare?, he quotes Tim Lang quoting a senior adviser to a senior minister that currently the best notion the government had for dealing with a hard Brexit was to abandon all checks and regulation of food coming into the UK, with huge ramifications for both quality and safety. “That’s not taking back control. It’s abandoning it.”
Picture on left by Romas Foord.

On the move

Raab's solution is to find other countries to move food from. But "For the US to replace the combined food imports from the other nine of the top 10, would require a vast food flotilla and logistics operation exceeding that of the 1940-45 Atlantic convoys.” See Report. Jay Raynor says "It is a dereliction of duty and an abnegation of the basic responsibilities of good government, on a truly staggering scale. Those involved should hang their heads in shame. "
There is, according to the Guardian, "something truly ridiculous about the government preparing to stock up for a hard Brexit on 29 March 2019 – facing the prospect of wartime shortages of supplies, not least of the vast quantities of food we import daily from “the Continent” – when it is not 1914 or 1939 and the only war we are preparing for is a war on ourselves."
New Brexit Secretary Raab (July 23) says he hasn't said the government is stockpiling food - just making sure supermarkets and manufacturers 'could be made' to have enough to kae sure shelves are not emptied. "Ministers are to unveil emergency plans to make sure that Britain has “adequate” food supplies in the event of a chaotic no-deal departure from the EU" said the Brexit secretary.

Consequences

These are the consequences of the EU and UK failing to reach a deal for businesses:

The UK becomes a third country, with no preferential deal for customs purposes or for VATLicenses and approvals issued by the UK are no longer recognised by the EUCompanies based in the EU can no longer operate in the EU as a member state and need to either move business or establish a representative in an EU country (many vegetable farms have two centres of operation - one in UK and other in say Spain to provide throughout the year)UK professional qualifications are not recognised by the EUThe UK stops being part of EU systems – like the aviation area or the energy market

No Deal for Farm & Food:

What a 'No Deal' means to farm and food producers.
1 The EU subsidies will be 'up for grabs'. We'll leave both CAP and Fisheries policy.
2 Leaving the Single Market means harmonisation standards do not have to be followed - unless you want to export into Europe. It will mean border checks on food over 'non-tariff' barriers - those to do with health and safety of food AND, 'Country of origin'.
3 Leaving the Customs Union means stepping off the tariff cliff designed to protect farm and food producers. We would have tariff barriers checks - ie pay taxes to EU Customs.
Depending which way the government goes, this could mean either 1) maintaining the same tariffs ourselves for time being. This means having tariff walls both ways across the English Channel/Irish border
2) Doing away with all the 2000 & 15000 food related tariffs, so food and farmers not protected at all from cheap imported food from all over the world, That would decimate rural economies

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