Better In or Out - What Could the EU Referendum Decision Mean for UK Agriculture, Fisheries?

UK - There has been a multitude of information and scare mongering from both sides of the EU referendum campaign. With the vote being held tomorrow (23 June 2016), here I will try to sum up the views of many UK agricultural organisations, as well as taking a look at the effects of a BREXIT on other countries.
calendar icon 21 June 2016
clock icon 9 minute read

The opinion taken by many of the UK's agriculture organisations has so far been neutral or remain.

The National Farmers Union (NFU) for example has said that it would not actively campaign or join campaign groups or advise members how to vote but it believes the interests of farmers would be best served by remaining in the EU.

The British Veterinary Association also chose to take no position. However it noted that EU membership has allowed the UK to influence and improve animal health and welfare standards in other Member States.

The EU also helps fund many of our animal disease eradication and surveillance work. For example, half of the funding for the UK’s bovine TB eradication programme comes from the EU. Without this funding would UK animal welfare suffer?

Compassion in World Farming (CIWF) noted that an exit would hamper the UK’s ability to restrict agricultural imports that do not meet UK animal welfare standards, as we would need to adhere to World Trade Organisation rules.

Despite being on the remain side, many have acknowledged that the EU is far from perfect and is in need of a reform.

The UK Environment Secretary Liz Truss said she would like to see changes in the Common Agricultural Policy (CAP) but that to leave the EU would be a leap in the dark.

“I believe that by voting to remain within a reformed EU, we can work to reduce bureaucracy and secure further reform, while still enjoying the significant benefits of the single market, which gives us access to 500 million consumers,” she said.

The environment secretary added: “Food and farming is our largest manufacturing industry employing 3.8 million people.

“Sixty per cent of our food and farming exports are to the European Union, bringing in £11 billion to our country."

AHDB chairman Peter Kendall, also believes farms will be better off inside the EU.

Mr Kendall argued that 14 per cent of the UK's poultry and 19 per cent of its pork were exported to EU nations, so it is essential to retain that open market.

“We need a reality check of what those who want to leave are advocating,” he said. The drive for cheaper food and reduced import tariffs would leave UK farmers competing against ever lower priced imports – and if EU countries imposed new tariffs that would only come off the farmers' bottom line, he added.

In the run up to the referendum there is already a lot of market uncertainty. If the UK were to decide to leave then this would likely continue.

If the UK leaves, the country would need to first negotiate a withdrawal agreement, which could take around two years. The UK would then also need to discuss the terms of its future relationship with the EU.

During that time the UK would continue to abide by EU treaties and laws, but not take part in decision-making.

As well as this, the UK would also need to establish new trade agreements and policies for agriculture - the outcomes of which are uncertain.

Opportunities for UK Outside the EU

On the leave side, Daniel Hannan, Conservative MEP for South East England, has warned that the UK has been paying too much into the Common Agricultural Policy and not receiving enough back.

In 2014, he said that the UK paid in 4.6 billion but only received 2.9 billion from the CAP.

“Every year since we joined there has been an imbalance.”

He said that British farmers are receiving about €229 per hectare, but farmers elsewhere in Europe are receiving considerably more.

Mr Hannan explained that virtually every country in the world, apart from New Zealand, supports its agricultural sector, but the UK farmers are not receiving the support they should from the EU.

“I’m certain we could do better running our own affairs,” he said.

Similarly, UKIP MEP for the East of England, Stuart Agnew, claimed that EU regulation only adds cost to British farming, and insisted that even within the EU there wasn't a level playing field.

Leaving the single market wouldn't be a disaster, Mr Agnew said. “We export a lot to China and they're not in the single market. We also import far more goods from the EU than we export to them – there's a deal to be done here.”

Colin Rayner, a farmer from Berkshire said British farming had survived before EU subsidies and would survive after leaving the EU.

“The EU isn't going to be recognisable in 10 years time – it's time for us to be brave enough to stand on our own two feet,” he said.

George Eustice, Minister of State for Farming, Food and the Marine Environment, is also firmly in the Brexit camp.

Mr Eustice has argued that by leaving the EU UK farmers would have the opportunity to shape their own agricultural policy.

"For the first time in over forty years, Ministers would have the power to change things and farmers will be given a say in shaping their future. A UK agricultural policy will not be dumped on everyone from on high like the CAP," Mr Eustice explained.

Phil Stocker, Chief Executive of the UK’s National Sheep Association, praised Mr Eustice for his emphasis on the opportunities of leaving the EU.

“It was encouraging to hear Mr Eustice echo NSA’s frustrations on the increasing amount of red tape and regulation farmers are up against, and his promise appears to be that if we exit the EU we can drastically reduce this while still demonstrating equivalence with EU regulations for trade,” Mr Stocker said.

What is Best for Our Fisheries?

According to Mr Eustice, the case for leaving the EU is overwhelming.

The UK would be able to assert itself as the lead power in the North East Atlantic to deliver fairness and sustainable fishing, said Mr Eustice.

Outside the EU we would be able to re-establish national control over some areas and also we could argue for a fairer share of quota allocations in many fish stocks, he said.

However, ClientEarth and 12 other signatories, including two former UK fisheries ministers and six academics, have challenged George Eustice over his claim that leaving the EU would be good for UK fisheries.

Liane Veitch, ClientEarth fisheries scientist, explained that the Common Fisheries Policy (CFP) is working and has led to increased fish stock levels. Leaving the CFP now would mean a big threat to the improved management of the stocks that are essential for the UK fishing industry.

The majority of UK fish stocks are also shared with our EU neighbours because they extend beyond what would be our exclusive economic zone (EEZ) and those fish won't respect national borders.

If we left the EU we would have to negotiate management agreements to these shared stocks (essentially all of the UK's main commercial stocks). We would also be wanting to retain our access to EU waters and EU markets - meaning big concessions to UK waters would be likely.

Arguments that we need to leave the EU to manage our quota better are completely unfounded - the UK has the right to allocate its quota however it wishes, including preferential access to small-scale vessels or to support fishing communities, and it does so.

Any unfairness or inequalities is a result of UK policy, not EU law, and the decision to change this is up to the UK, said Ms Veitch.

How Would a Brexit Affect Other Countries?

As well as understanding the affects on our own country it is important we also understand some of the impacts on other countries.

For many countries an exit could be very damaging. Irish Farmers Association (IFA) President Joe Healy has warned that the UK is very important to Ireland's agri-food market, with over 40 per cent of Irish agricultural exports heading there.

It is the destination for over 50 per cent of our beef, 60 per cent of our cheese, €350m worth of pigmeat exports and almost 100 per cent of our mushroom exports, said Mr Healy.

"Should the UK vote to leave the EU, Irish agriculture would undoubtedly suffer negative consequences, both in the short-term and the longer term," commented Mr Healy.

"The costs of trading with the UK would, inevitably, rise. In addition, the threat of displacement of Irish product from the UK market is very real, should the UK enter into preferential trade agreements with other exporting countries."

In the US, market analysts Steve Meyer and Len Steiner explained that the US dollar index has already declined sharply after polls suggested that British voters will decide to stay in the EU, after all.

However, either way, the vote has the potential to dramatically impact broader financial markets, causing significant changes in currency values and affect short term growth projections for the global economy.

According to the analysts, despite all the various projections by economists, the reality is that no one really knows the true impact if Britain decides to leave.

For US livestock producers, Mr Meyer and Mr Steiner believe the most important implication in the short term is what happens to the value of the US dollar and the effect this has on the relative price of US products sold overseas.

Leave or Remain?

With the vote imminent, it is not truly clear what the outcome will be for farmers if the UK is to leave the EU. It must also be remembered that the consequences of leaving will stretch much further than just the effect on agriculture.

Although I will not say how others should vote, I am a firm believer that the UK should stay in the EU. As well as there being far too much uncertainty and many un-answered questions around leaving, by being in the EU the UK has so many opportunities to grow and improve the lives of people and animals living both inside and outside the EU.

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