The impact of brexit on UK agriculture: challenges and opportunities

Brexit has ushered in a new era for UK agriculture, bringing about significant changes that are reshaping the industry’s landscape. As the United Kingdom charts its course outside the European Union, farmers and agricultural businesses face a complex web of challenges and opportunities. From trade dynamics to regulatory shifts, labour shortages to environmental policies, the impact of Brexit on UK agriculture is far-reaching and multifaceted.

The agricultural sector, long accustomed to the framework of the EU’s Common Agricultural Policy, now finds itself navigating uncharted waters. This transition period has brought about both immediate disruptions and long-term strategic considerations for farmers, policymakers, and industry stakeholders alike. As the dust begins to settle, it’s becoming increasingly clear that adaptability and innovation will be key to thriving in this new agricultural paradigm.

Common agricultural policy (CAP) reform and UK subsidy restructuring

The departure from the EU’s Common Agricultural Policy marks a significant shift in how UK agriculture is supported and regulated. For decades, CAP provided a framework for agricultural subsidies and rural development programmes across EU member states. Now, the UK has the opportunity to tailor its agricultural support system to better suit national and regional priorities.

The UK government has outlined plans for a new Environmental Land Management Scheme (ELMS) to replace the Basic Payment Scheme under CAP. This shift represents a fundamental change in philosophy, moving from payments based on land area to a “public money for public goods” approach. Under ELMS, farmers will be rewarded for delivering environmental benefits such as improved water quality, enhanced biodiversity, and carbon sequestration.

This transition, however, is not without its challenges. Many farmers have relied heavily on CAP payments, which often represented a significant portion of their income. The phased reduction of these payments and the introduction of a new system based on environmental stewardship require substantial adaptation from the farming community. Some farmers may need to diversify their operations or invest in new practices to align with the goals of ELMS.

The move from CAP to ELMS represents one of the most significant policy shifts in UK agriculture in decades, potentially reshaping the rural landscape and farming practices across the country.

Moreover, the devolved nature of agricultural policy in the UK adds another layer of complexity. Scotland, Wales, and Northern Ireland are developing their own approaches to agricultural support, which may diverge from England’s ELMS. This could lead to a more diverse agricultural policy landscape within the UK, potentially creating both opportunities and challenges for farmers operating across different regions.

Trade dynamics: EU single market exit and new global partnerships

Brexit has fundamentally altered the UK’s trading relationship with its largest agricultural export market, the European Union. The exit from the EU Single Market and Customs Union has introduced new barriers to trade, impacting the flow of agricultural goods between the UK and EU member states. These changes have significant implications for UK farmers and food producers who have long relied on frictionless trade with Europe.

World trade organization (WTO) rules and tariff implications

In the absence of a comprehensive trade agreement, UK-EU agricultural trade would default to World Trade Organization (WTO) rules. This scenario would introduce significant tariffs on many agricultural products, potentially making UK exports less competitive in EU markets and increasing the cost of imports for UK consumers. For example, under WTO rules, beef exports could face tariffs of up to 92%, while dairy products could see tariffs as high as 35% .

The introduction of tariffs could lead to a reshaping of trade flows, with UK producers potentially seeking alternative markets for their goods. This shift might necessitate adaptations in production methods, packaging, and logistics to meet the requirements of new export destinations.

UK-EU trade and cooperation agreement: agricultural provisions

The UK-EU Trade and Cooperation Agreement, which came into effect on January 1, 2021, provides for tariff-free and quota-free trade in goods between the UK and EU. However, it does not eliminate all barriers to trade. New customs procedures, regulatory checks, and rules of origin requirements have been introduced, adding complexity and cost to cross-border trade.

For the agricultural sector, these new procedures can be particularly challenging, especially for perishable goods. Delays at borders due to increased paperwork and inspections can impact the quality and shelf life of fresh produce, meat, and dairy products . Farmers and food producers are having to adapt their supply chains and logistics to account for these new realities.

Exploring new markets: CPTPP and beyond

As the UK seeks to diversify its trade relationships post-Brexit, it has set its sights on joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). This move could open up new opportunities for UK agricultural exports in markets such as Japan, Canada, and Australia. However, it also presents challenges, as UK farmers may face increased competition from agricultural powerhouses within the CPTPP bloc.

The UK is also pursuing bilateral trade agreements with countries around the world. While these agreements may create new export opportunities, they also raise concerns about the potential influx of agricultural imports produced under different standards. This has led to debates about maintaining food safety, animal welfare, and environmental standards in the face of new trade deals.

Impact on specific sectors: lamb, beef, and dairy exports

Certain agricultural sectors are particularly vulnerable to the changes brought about by Brexit. The sheep farming industry, for instance, has been significantly impacted. The UK exports around 30% of its lamb production, with the vast majority going to EU markets . The introduction of new trade barriers and potential tariffs could severely affect this sector.

Similarly, the beef and dairy sectors face challenges in maintaining their export markets in the EU while also confronting potential increased competition from imports under new trade agreements. These sectors are having to explore new markets, invest in product differentiation, and potentially restructure their operations to remain competitive in the post-Brexit landscape.

Labour shortages and seasonal worker schemes

One of the most immediate and visible impacts of Brexit on UK agriculture has been the exacerbation of labour shortages, particularly in sectors reliant on seasonal workers. The end of free movement between the UK and EU has significantly reduced the pool of available labour for farms and food processing facilities.

End of free movement: effects on fruit and vegetable harvesting

The fruit and vegetable sector, which has traditionally relied heavily on EU workers for harvesting, has been particularly affected. Many farms have reported difficulties in recruiting sufficient workers for peak seasons, leading to concerns about crops going unharvested. This situation has forced the industry to explore alternative labour sources and invest in automation where possible.

The labour shortage has also put upward pressure on wages in the agricultural sector, potentially impacting the competitiveness of UK produce. Some farmers have reported increasing wages by 10-15% to attract and retain workers, costs which may ultimately be passed on to consumers.

Seasonal agricultural workers scheme (SAWS) pilot programme

In response to these challenges, the UK government has introduced the Seasonal Agricultural Workers Scheme (SAWS) pilot programme. This scheme allows a limited number of workers from outside the EU to come to the UK for up to six months to work in the horticulture sector. While this has provided some relief, many in the industry argue that the current cap on worker numbers is insufficient to meet demand.

The SAWS programme is a crucial lifeline for many farms, but its limited scope highlights the ongoing challenges in addressing agricultural labour shortages post-Brexit.

The effectiveness of SAWS and its potential expansion are subjects of ongoing debate, with industry bodies calling for increased quotas and a more streamlined application process. The success of this scheme could be critical in ensuring the UK’s ability to maintain domestic food production levels.

Automation and AgriTech solutions for labour gaps

The labour challenges brought about by Brexit have accelerated interest and investment in agricultural technology and automation. From robotic harvesters to AI-powered crop management systems, UK farmers are increasingly looking to technology to fill labour gaps and improve efficiency.

Companies like Farmonaut are at the forefront of this AgriTech revolution, offering satellite-based farm management solutions that can help farmers optimize their operations with fewer workers. These technologies not only address labour shortages but also have the potential to increase productivity and sustainability in the long term.

However, the transition to more automated farming practices requires significant investment and may not be feasible for all farm sizes and types. This raises questions about the future structure of UK agriculture and the potential for a divide between larger, more technologically advanced farms and smaller, traditional operations.

Environmental land management scheme (ELMS) implementation

The Environmental Land Management Scheme (ELMS) represents a paradigm shift in UK agricultural policy, moving away from the area-based payments of the Common Agricultural Policy towards a system that rewards farmers for delivering environmental benefits. This transition is not just a change in funding mechanisms but a fundamental reimagining of the role of agriculture in environmental stewardship.

ELMS consists of three components: the Sustainable Farming Incentive, Local Nature Recovery, and Landscape Recovery. Each of these elements aims to encourage different types of environmental improvements, from sustainable farming practices to large-scale habitat restoration projects.

The implementation of ELMS presents both opportunities and challenges for UK farmers. On one hand, it offers the potential for new income streams through environmental services. On the other, it requires farmers to adapt their practices and potentially invest in new skills and technologies. The success of ELMS will largely depend on its accessibility to farmers of all sizes and its ability to deliver tangible environmental benefits while maintaining agricultural productivity.

As ELMS is rolled out, farmers will need to carefully consider how to integrate environmental measures into their business models . This might involve practices such as:

• Creating wildlife corridors and habitats
• Implementing regenerative agriculture techniques
• Improving soil health and water management
• Adopting precision farming technologies to reduce inputs

The transition to ELMS also raises questions about food security and the balance between environmental conservation and agricultural production. Critics argue that an overemphasis on environmental outcomes could lead to reduced domestic food production, potentially increasing reliance on imports. Policymakers and industry stakeholders are grappling with how to strike the right balance between these competing priorities.

Regulatory divergence: UK agricultural standards Post-Brexit

Brexit has opened the door for potential regulatory divergence between the UK and EU in agricultural standards. While the UK has largely retained EU regulations in the immediate aftermath of Brexit, there is now scope for the development of distinct UK approaches to various aspects of agricultural regulation.

Genetically modified organisms (GMOs) and gene editing regulations

One area where the UK is already charting a different course is in the regulation of genetically modified organisms (GMOs) and gene editing technologies. The UK government has signaled its intention to take a more permissive approach to gene editing in particular, viewing it as a potential tool for developing more resilient and productive crops.

This divergence from EU policy could open up new opportunities for agricultural innovation in the UK. However, it also raises questions about the future of UK-EU agricultural trade, as differing standards could create new barriers. Moreover, public acceptance of these technologies remains a challenge, and the UK will need to navigate carefully to maintain consumer confidence.

Pesticide usage and maximum residue levels (MRLs)

Pesticide regulation is another area where the UK may choose to diverge from EU standards. The EU has some of the strictest regulations on pesticide use and maximum residue levels (MRLs) in the world. Post-Brexit, the UK has the option to set its own standards, potentially allowing the use of pesticides that are restricted or banned in the EU.

While this could provide UK farmers with access to a wider range of crop protection products, it also raises concerns about environmental impact and could complicate exports to the EU market. The UK will need to balance the interests of agricultural productivity with environmental protection and trade considerations in developing its pesticide policy.

Animal welfare standards and export certification

The UK has long prided itself on high animal welfare standards, often going beyond EU requirements. Post-Brexit, there is potential for the UK to further enhance these standards. However, this also presents challenges in terms of maintaining competitiveness in international markets where lower standards may allow for cheaper production.

Export certification for animal products has become more complex post-Brexit, with new requirements for health certificates and inspections. As the UK develops its own animal health and welfare policies, ensuring smooth certification processes for exports will be crucial for maintaining access to international markets.

The development of UK-specific agricultural standards post-Brexit represents both an opportunity for tailored policies and a challenge in maintaining international trade relationships . Striking the right balance between innovation, environmental protection, and market access will be crucial for the future success of UK agriculture.

Devolution impact: agricultural policies in scotland, wales, and northern ireland

The devolved nature of agricultural policy in the UK adds another layer of complexity to the post-Brexit landscape. Scotland, Wales, and Northern Ireland have the power to develop their own agricultural policies, which may diverge from those implemented in England. This situation creates both opportunities for tailored regional approaches and challenges in maintaining a coherent UK-wide agricultural strategy.

In Scotland, the government has emphasized its commitment to maintaining close alignment with EU standards and has been critical of some aspects of the UK’s post-Brexit agricultural policy. The Scottish government’s approach focuses on supporting small-scale and family farming, promoting environmental sustainability, and maintaining high food standards.

Wales has developed its own sustainable farming scheme, which shares some similarities with ELMS but is tailored to Welsh agricultural conditions and priorities. The Welsh approach places a strong emphasis on supporting rural communities and preserving the Welsh language alongside environmental goals.

Northern Ireland faces unique challenges due to its position under the Northern Ireland Protocol, which keeps it aligned with some EU regulations to avoid a hard border on the island of Ireland. This situation creates a complex regulatory environment for Northern Irish farmers, who must navigate both UK and EU rules.

The divergence in agricultural policies across the UK nations could lead to:

• Different levels of support for farmers in different parts of the UK
• Varying regulatory standards, potentially complicating internal UK trade
• Challenges in presenting a unified UK position in international trade negotiations
• Opportunities for policy innovation and the sharing of best practices between nations

As the UK continues to develop its post-Brexit agricultural policies, balancing the interests and approaches of the devolved nations will be crucial. The success of UK agriculture in the post-Brexit era will depend in part on effective cooperation and coordination between the four nations, even as they pursue their own policy priorities .

The impact of Brexit on UK agriculture is multifaceted and evolving. From trade dynamics to regulatory changes, labour challenges to environmental policies, the sector is undergoing a period of significant transformation. While challenges abound, there are also opportunities for innovation, sustainability, and the development of a distinctly British approach to agricultural policy. As the industry adapts to this new reality, the resilience and ingenuity of UK farmers and agricultural businesses will be key to navigating the post-Brexit landscape successfully.