‘Farmers can help provide solutions’
Economist looks at the challenges and future of post-Brexit farming
WELSH farmers might need to strap in for a rough ride if the UK’s trade talks with the EU end in no-deal, a leading economist has warned.
But even if a deal can be struck it’s likely to be weighted in favour of the EU – and agriculture will find itself a long way down the UK Government’s list of priorities, according to Dr Edward Jones, of Bangor University.
The economics lecturer, a 2020 Nuffield Scholar, said: “When it comes to the essence of trade deals it’s very simple – the bigger the economy is, the more it can dictate the terms.
“The biggest kids in that playground are the US with an economy worth more than 21 trillion dollars, followed by the EU with 16 trillion and China at 14 trillion.
“The UK economy is sixth at 2.7 trillion but, frankly, that doesn’t matter because the big three will call the shots as they account for 60% of the world economy.”
Over the years the EU, with a population of about 500m, has been able to negotiate some very successful trade deals. The UK, said Dr Jones, has done very well out of this arrangement.
Although Britain has now signed a new trade agreement with Japan, in the short-term this is expected to add a mere 0.07% to the UK economy.
At the same time the deal commits the UK curbs on state aid.
As Welsh farmers export 40% of their lamb, mostly to the EU, Prime Minister Boris Johnson has pledged to buy all unsold Welsh Lamb in the event of a no-deal.
But Dr Jones said this isn’t sustainable in the long-term – and it remains unclear what Boris will do with all that lamb.
The wider food and drink sector in Wales is facing similar uncertainty: in 2018 threequarters of all of its exports went to the EU.
All this at a time when the world is grappling with the coronavirus pandemic.
Dr Jones warned: “To lose the EU market would be a huge blow to farmers and food to tougher producers in Wales. The pressure would then be on the UK Government to strike trade deals with nations like Brazil and Argentina – and both can produce agricultural produce much cheaper than in Wales.
“Protecting Welsh agriculture is not going to be at the top of the list of the Government’s priorities in a trade deal.
“But for negotiators from Argentina and Brazil, the chance to break into our markets will be at the top of their agendas.”
Post-Brexit farming will also face the uncertainty of a new support scheme in which claimants will be paid for public goods such as helping wildlife, mitigating floods, planting woodlands and improving soils.
Ultimately, believes Dr Jones, food production could be unshackled from subsidies and paid for entirely by the free market.
Yet food and public will remain linked in ways, he suggested.
“We face challenges like climate change and feeding a growing population and farmers can help provide solutions,” he said.
“But if farm businesses aren’t financially viable, they won’t be able to help address these challenges.
“I would struggle to find a country where farmers aren’t supported either directly or indirectly by their governments.” goods other