National Farmers’ Union criticises economists’ positive vision of global tariff-free trade after Brexit
- Credit: Sarah Lucy brown
Farming leaders warned of a 'devastating effect' on British food production if the government pursues global free trade and unilaterally lowers import tariffs after Brexit.
The warning came in response to a report by Economists for Free Trade, a pro-Brexit group who claim that abolishing trade barriers and tariffs after leaving the EU could boost the UK economy by £135bn a year, giving households a £5,000-a-year boost.
The report's author, Cardiff University economics professor Patrick Minford, said a 'hard Brexit' would be economically superior for the UK than a 'soft' one, as it would boost competition and increase employment and productivity.
Meanwhile, a separate report from the Institute of Economic Affairs (IEA) says the UK could achieve lower prices for consumers, increased productivity and higher wages by removing trade barriers and pursuing a policy of unilateral free trade after leaving the EU.
It says it would 'not be a disaster' if Britain fails to forge a trade deal with the EU, as it could resort to World Trade Organisation rules for its relationship with Europe, while striking free trade agreements with major trading partners such as the US, Canada and Australia.
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However, National Farmers' Union (NFU) president Meurig Raymond said he had 'grave concerns' over the implications for British food production, and questioned the arguments made by both the IEA and Prof Minford.
'Under the scenarios they advocate, British farming would be severely damaged as cheaper imports are allowed in while British exports remain subject to high tariffs abroad,' he said.
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'These arguments involve a very narrow economic analysis that fails to acknowledge the benefits farming delivers to the public outside the limited confines of food prices in shops. The British public needs a viable and productive farming sector to continue to maintain and enhance the countryside they value and to provide a safe and trusted, as well as affordable, supply of British food.'
The reports follow the publication of a review by the Agri-Food and Biosciences Institute, which looked at possible trade policy scenarios post-Brexit.
It shows that in the case of unilateral trade liberalisation – where all tariffs on food imports are abolished – the price, volume and value of all British agricultural commodities would fall significantly, with prices for beef falling by 45pc and sheep by 29pc.
Mr Raymond added: 'These outcomes would clearly have a devastating effect on British farming and, by extension, the British countryside, the rural economy and our ability to feed ourselves in an increasingly volatile world.
'When it comes to trade policy after Brexit, the interests of the British public and of British farmers are best served through maintaining a deep trading relationship with the EU.'
Norfolk NFU chairman Tony Bambridge said the UK's food policy must have wider priorities than simply providing cheap food for consumers.
He said: 'Anyone who makes these trade deals will need to think: What are the consequences of making the average plate of food 10p cheaper a day?
'We have high standards, but we need to face up to the fact that British agriculture is not the most competitive in the world.
'We are comparative minnows in terms of economies of scale, and we will be competing with countries in Africa and South America where the national living wage either does not exist or is very low. The really worrying thing is that by bringing cheaper food from abroad, we will be exporting our environmental concerns to countries that are less concerned about the environment or animal welfare than we are.
'The good thing is that a large chunk of the public wants to support British farmers and maintain our high standards.
'We need to talk about the whole food and farming industry. The farm is an important part of the jigsaw. If you lose the Norfolk pig farmer, before you know where you are, you have lost the bacon factory and all the marketing, accounting and HR jobs that go with it. If you don't keep that primary production, the secondary production won't be there.'
A COMPETITIVE FUTURE?
While the NFU is keen to see growers protected from cheap imports, some Norfolk farmers believe unrestricted global trade could offer opportunities to compete in new markets – as long as the government invests in innovation and quality.
Frettenham-based dairy producer Emily Norton, a vocal advocate of Brexit during the referendum campaign, said protectionist arguments are 'outdated, and we should look to develop offensive trade interests over the coming years'.
'There is little argument that the status quo, either here or in the rest of Europe, is deserving of preservation in its own right,' she said. 'Productivity is slowly rising on UK arable farms and technological advancement is reducing input costs all the time, and it is vital to remember that food and fuel markets as we see them have been created by 45 years of direct and indirect EU intervention at enormous expense both to the taxpayer and to farmers in developing countries.
'So the question for UK farmers has to be: how does an independent UK create the right policy environment to incentivise and increase UK farm business resilience and rural vibrancy? The answer is not more tariffs and not more of the status quo. We need good and real government and private-backed investment in the things that will make a difference – exports, innovation, expertise, quality – so that we can stay ahead of our customers' ever-changing choices.
'As an industry, we should not fear cheap imports, but instead value the opportunity to provide high quality, nutritious, 'Brand Britain' food to sophisticated, connected consumers all over the world.'