• Written by Andrew Davis
  • Posted on Dec 12, 2018
  • Articles

Considering the turmoil pervading the Houses of Parliament at present, perhaps it was not surprising that Michael Gove was unable to attend the meeting of the Conservative Rural Forum held recently.  That left a large hole in the agenda but, as so often happens in these circumstances, it turned out to be an instructive and enjoyable discussion nevertheless.

Nick Allen, a close friend, Hampshire farmer and Chief Executive of the British Meat Processors Association, was drafted in at short notice to talk about the potential impact of Brexit on livestock farming and the meat sector.  Already due to speak was Jim Portus of the South West Fish Producers Organisation who talked about the potential impact of Brexit on the British fishing industry.

The Common Fisheries Policy is one of the most hated aspects of EU membership, at least to those involved in the industry.  That is hardly surprising as it gives significant access for EU trawlers to fish in British territorial waters.  For example, 80% of cod lives in our waters but we have only 9% of the allocated cod quota.  EU boats are allowed to catch 60% of fish in British waters.  No wonder our fishermen think we cannot leave the EU quickly enough.

But life is not that simple and we must shoulder some of the blame.  When we joined the Common Marker on 1st January 1973, there was a ten year transition period before we joined the Common Fisheries Policy.  During that time, our fishing fleet expanded considerably, to such an extent that, when we joined the CFP, there was excess capacity.  The Government set up a scheme to give grants for the scrapping or trawlers which included the fishing quota.  The Labour Fisheries Minister of the day, Elliot Morley, decided to save money by leaving the quota with the owners and only paying for the scrapping of the boats.  This left the owners to sell the quota, mostly to Spanish and Dutch companies.

With a keen grasp of the political situation, these new owners registered their boats in this country so they could legitimately fish as British boats even though the proceeds went back to Spain or Holland.  This will still be the case even after we leave the EU, leaving us with a dilemma.  The quotas are not time limited so the only way to resolve it would be for the Government to buy back the quota and reallocate it to British owners.  Even if there was the political will to do so, it might not be possible to prevent foreign companies owning British fishing fleets.  Quite apart from that problem, the French are demanding access to British waters as part of any future trade deal.

The British meat industry is equally vulnerable to the impact of Brexit.  International trade is critical, not least because of the demand for different cuts of meat, known as balancing the carcass.  Some parts of the carcass are in demand here, others have to be exported, for example to the Middle East.  For example, we export as much sheep meat as we import but not the same cuts.

The meat trade is international, most beef enterprises operating in this country are owned by Irish multinational companies.  As a result, much of our meat goes to Ireland for processing and packing, a trade that would attract WTO tariffs in both directions if we left the EU without a trade deal.  To give some indication of the impact of that, the price of beef fell by 30% when the very short-lived Foot and Mouth Disease outbreak of 2007 restricted movements.

The UK is nowhere near self-sufficient in pig meat.  We are for fresh pork but a large proportion of processed meat such as bacon is imported.  In a situation similar to the fishing fleet, a Danish company, Tulip, owns around 30% of all the pigs in this country, having them reared on contact by British farmers.

It is said that we have the highest standards of animal welfare, traceability and food safety of any country in the world and that we should strive to improve that further.  But the British consumer will pay no more than 10% extra for home products so, if the bar is set even higher, it will be almost impossible to prevent much cheaper imports from countries with lower standards.  In any case, higher welfare standards bring significant risk.  For example, 40% of our breeding sows are kept outdoors, bringing benefits of animal husbandry if not for the environment, but exposing them to the imminent threat of African Swine Fever arriving in this country from Belgium.

Another area of concern is access to labour.  Both the fish and meat industries are heavily dependent upon migrant labour and there are already severe shortages even before we leave the EU.  Those who process fish and meat products need very high levels of skill and yet they do not count as skilled jobs in the Government’s immigration policy.  Some, but by no means all, of the processing can be achieved by machinery but there is little investment with the uncertainty of Brexit.

The two speakers gave excellent and concise views on the potential benefits and threats of Brexit.  The truth is that, as in most other sectors of the economy, both industries are multinational and, unless we have a free trade deal with the EU and access to migrant labour, companies will simply relocate to other parts of Europe.