Farming Without knowing the rules we can’t gamble on Brexit
While conjuring up the image of Noel Edmonds at this time on a Monday morning might not be fair, the parallel between the “Deal or no Deal” game show – where it’s just too easy for contestants to go home empty-handed – and the current game of political poker over Brexit simply can’t be avoided.
But while the farming industry might be able to safely ignore the man from Crinkley Bottom, sadly the Brexit row and the risk of no deal cannot be so easily put to one side.
Some commentators are claiming that the impasse revealed in the Brexit negotiations last week was always on the cards in the game of Brexit baccarat - but there is now an overwhelming necessity to move the discussions on to the next level.
While you might hope that there is a cunning game plan at the back of the UK government’s negotiating strategy, a steadfast refusal to publish any of the results from its own Brexit impact assessments certainly throws some severe doubts over the strength of the hand which the country is holding.
And last week even saw a swift attempt to discredit themodellingworkcarried out on the effects of Brexit on our own industry by the Agricultural and Horticultural Development Board with Defra’s knee-jerk reaction being to disparage the work, claiming it had been based on “hypothetical and highly unlikely scenarios which did not reflect the government’s negotiating position”.
It’s true that the prediction of a 50 per cent drop in average farm incomes picked up by the papers was under a worst case scenario – but that figure actually masked the possibility of deeper cuts to many of the key farming sectors.
The three main scenarios used in the AHDB’S modelling exercises were : “business as usual” which would see support and trading conditions remain as close to current levels as possible; unilateral trade liberalisation which would let in moreimportsfromoutside Europe; and “fortress UK” which would see us revert to World Trade Organisation most favoured nation status under which both importsandexportswould be exposed to considerable tariffs.
A closer reading of the report reveals that the commonestfarmingenterprises which account for most of the land use across the UK - cereals and upland beef and sheep production – could well face a far worse fate. Indeed the modelling shows that these sectors will be hard hit under all three scenarios – and under the “fortress UK” option, they will see their average farm income turned into a substantial loss.
But while the AHDB itself might have been a little stunned b y all the attention the report raised, especially as it is just the latest in more than a dozen publications on the Brexit issue – few of which, it has to be said paint a glowing picture of post-brexit farming life – it’s main aim was to make farmers aware of what might be about to hit them.
And while the organisation is probably correct in worrying that the farming industry could sleep walk into Brexit, its assertion that “doing nothing is the riskiest strategy” begs the immediate question of what it is we should be doing in the face of such uncertainty - and you can’t really blame the industry for taking a bit of a wait and see attitude.
As asserted, farmers might indeed be guilty of concentratingtoomuchon the day job, especially after a year like this and the tendency is to keep the shoulder to the wheel in order to overcome the day-to-day struggles – and indulging in some of the more esoteric elements of business management theory can be well down the “to do” list.
But we’d all like to be in the top 25 per cent of performers who, according to the report, are still likely to be making money in the post-brexit world – however there will be few businesses out there who aren’t already trying to optimise their output while minimising their costs.
Farming has always been a gamble. If you’re not going to rely on sheer luck, the only way to win is to understand the odds and to try to stack them in your favour.
That’s not easy when you don’t know the rules of the game.