EU in new trade deals with China and Japan

New map identifies UK as drought-affected, and EU farmers told to prepare for effects of hard Brexit

The European Commission has published a ‘drought map’ of Europe, and it shows much of northern and large parts of central Europe as problem areas. Scotland, much of England and all of Ireland are deemed to be drought affected.

This will pave the way for early CAP payments from October, in a repeat of last year when this happened because of wet weather conditions.

The impact of the drought varies, with farm lobby organisations claiming the impact is worst in central Europe and the Baltic states. In Scotland, conditions are said to be “causing problems” for potato and cereal farmers, but some countries say they are in crisis and are forecasting a drop of 6% in cereal and oil seed yields.

The race is on to access the Chinese beef market in the wake of the steady rolling back of its BSE-driven ban on EU member states.

This is a lengthy task, with individual processing plants having to be approved followed by the pursuit of commercial business.

Ireland, which was the first to have the ban lifted, is well ahead and ABP, Larry Goodman’s business, is reporting significant success.

It has already secured business worth close to £50 million with a major restaurant chain with 400 outlets across China, along with an online supplier that specialises in mail order beef sales to the prosperous middle class in Chinese cities.

Unusual as this may sound, online beef sales are one of the fastest growing sectors in China.

Across the EU, farmers and food businesses are being urged by the European Commission and member state governments to prepare for the UK leaving the EU with no deal in place.

This would see World Trade Organisation tariffs introduced on sales into the UK, while UK exports would face the same. This would disrupt food markets, with the UK importing around 60% of its requirements. Key countries to suffer would be Ireland, Netherlands and Germany as key suppliers to the UK market.

The International Monetary Fund has warned that a hard Brexit would reduce EU-27 economic growth rates by around one per cent, with Ireland hit hardest.

The EU and Japan have formally signed one of the world’s biggest free trade deals.

This will pave the way for tariff-free trade in a number of commodities, a big win for EU exporters of beef, dairy products, pork and wine.

Unlike other trade deals there is no downside for agriculture in terms of imports, with the concessions to Japan focused on the motor industry. The EU deal is the product of many years of negotiations and the UK will benefit from this deal until it leaves the EU, after which it will face the task of trying to secure a similar arrangement.

Drought conditions in many parts of Europe should pave the way for early CAP payments.

Richard Wright.