AHDB report offers series of post-brexit outcomes
While the headline threat that leaving the European Union could see UK farm incomes slashed by more than 50 per cent might have represented a “worst case” scenario, the organisation behind the statistic said that their aim was to stop farmers “sleep walking” into Brexit.
The Agricultural and Horticultural Development Board (AHDB) released figures yesterday which showed the potential impact of different scenarios on the farming industry in their latest publication on Brexit.
But despite being labelled by Defra as being based on “hypothetical and highly unlikely scenarios which did not reflect the government’s negotiating position”, the board’s senior analyst, Sarah Baker, said that the report was not issuing a likely forecast but sketching out some of the possible outcomes.
She said the different scenarios took into account the policy and performance challenges which the industry could face across all sectors after the UK leaves Europe by looking at different trading arrangements, farm support measures and labour availability.
But while the organisation said that results differed markedly between the sectors, regardless of enterprise, the top 25 per cent of businesses remained profitable under every scenario.
Phil Bicknell, AHDB market intelligence director, said that this gave farmers the chance to learn from the high-performing groups – and to use them as a benchmark for what could be achieved by adapting the way they ran their own farm businesses.
He said: “This analysis underlines the fact that performance matters. As individual farms, we know that we can’t determine policy but we can recognise that performance is key to preparing for the challenges ahead.”
The scenarios looked at include a “business as usual” approach with current levels of support; a liberal approach to trade with tariff-free access to the UK and reduced support; to a cliff-edge Brexit, and reverting to World Trade Organisation regulations with dramatically reduced support payments.
Bicknell said the model would allow scenarios to be updated as more detail of policy decisions in key areas became known, allowing a more accurate picture to emerge.
Meanwhile, speaking at yesterday’s grain outlook conference, Jack Watts, AHDB lead analyst, said that the key issue was for farmers to realise they were facing a time of considerable change.
He said: “Adopting a ‘wait and see’ approach is a highrisk strategy – there is plenty that individual businesses can do now to get fit for the future.
“For many family farms this needs to involve stepping back from ‘the day job’ and taking a cool and dispassionate look at what they want the business to achieve – and looking at the economic and social objectives which drive the business.
“This is often a tough thing to do and bringing in an external facilitator to ensure that things are looked at in a realistic and pragmatic way can be a sensible move.”