The report Brexit: Trade in Food, published yesterday by the parliamentary select committee on the environment, food and rural affairs, warned that the government must start preparing a 'plan B'.
“Although the government’s intention is to agree a comprehensive free trade agreement and customs agreement with the EU, there is no guarantee that this will occur.”
"The government must be prepared for a situation where we trade under WTO rules, and start preparing accordingly," it said. "High tariffs on imports would raise the cost for consumers while removing tariffs could lower the cost for consumers but have a devastating effect on the long-term future of the UK’s agricultural industry,” the report said.
“Such a move could put many UK farmers out of business, which would be detrimental to the rural economy, and render the UK dependent on imported food.”
The sheep, daily and cereal sectors would be hardest hit, as these are the most reliant on exports. Under WTO rules, the tariff for UK to EU exports is over 30% on dairy products, 46% for cheese, 21% for tomatoes and could be as high as 87% for frozen beef.
This would result in an “unappetising hit to weekly food bills”, said chief executive of trade group the British Retail Consortium (BRC) Helen Dickinson.
The committee, which includes members of parliament from four political parties (Conservative, Labour, Democratic Unionist Party and the Scottish National Party), called on the government to publish its Agriculture Bill - which will replace the EU’s Common Agricultural Policy - as soon as possible. Before this, however, the Department of Food, the Environment and Rural Affairs (DEFRA)should conduct a sector-by-sector analysis of the impact of Brexit to inform the Agriculture Bill.
Investment at border posts
“The agricultural industry needs clarity as to the government’s long-term vision and future support,” it said, adding that DEFRA should consider setting up a fund to support the food industry meet “the challenges ahead”.
Meanwhile, investment into “the right IT systems and infrastructure” at border inspection posts was imperative in order to ensure smooth trade. Delays could lead to increased cost and, with perishable goods, food waste.
This was echoed by Dickinson of the BRC. “We’ve been absolutely clear that any friction introduced to the flow of goods, particularly fresh and perishable ones, will lead to spoilage, gaps on shelves and ultimately higher prices for consumers," she said.
Welfare and safety standards
The committee also warned that trade deals should not be made to the detriment of the UK’s reputation for high animal welfare, environmental and food standards.
Michael Gove, Secretary of State for Environment, Food and Rural Affairs told the committee the UK would be "assertive" in defence of its own interests. High welfare standards were not only important to consumers but also to the UK’s international reputation, he said.
The committee said Brexit was an opportunity for the government to improve on EU country of origin labelling (COOL) rules. Currently, EU rules on meat allow manufacturers to label a product with the country where the last significant production process took place, as opposed to the country where the animal was reared or slaughtered.
The Royal Institute of International Affairs advised the parliamentary committee that this could mean manufacturers use chlorine-washed chicken from the US in a British made chicken pie and label it as ‘Made in the UK.’
Sustain Alliance, a public interest group for responsible food and farming policies, advised the committee to make it mandatory for manufacturers to provide information on production methods for milk and meat, as is already the case for eggs.
The EU’s quality labels, such as protected designation of origin (PDO), added value to British businesses and must be “retained in a similar form after the UK leaves the EU”, the report said.
The government must also ramp up efforts to further develop current third party trade partners and find new ones. Currently, around 10% of the UK’s trade is with countries such as South Korea, South Africa, Peru, Chile and Iceland, for instance. These links could be further developed.
Stakeholders also told committee members that not enough resources were being invested in raising the profile of UK food exports abroad.
The UK’s biggest pork processor Tulip said: “Denmark is a major exporter of pig meat and has 20 people sitting in China. In the UK pig sector, we have one person in China.”
The report said the EU remained “a natural trade partner” for the UK, however, and while it would pursue new market opportunities, these would not replace EU trade.