Brexit has been a bust
Brexit has been mostly a bust for farmers in England and Scotland. That’s the consensus discovered during Iowa Farm Bureau’s Market Study Tour of the two countries June 17-24.
The United Kingdom’s exit from the European Union in 2020 upended long-standing trade relationships with other European countries and injected uncertainty regarding the structure of future government support for agriculture.
“Most folks we’ve talked to have said that Brexit has been a pretty negative event for England and Scotland so far,” said Christopher Pudenz, Iowa Farm Bureau economics and research manager, who led the study tour.
“It also seems that the next 12 months are going to be pivotal for what their agricultural policy looks like moving forward, and whether it is going to be beneficial for the agricultural community.”
Nineteen Farm Bureau members from across Iowa took part in the Market Study Tour to meet with farmers, agricultural groups and government officials regarding the current state of the UK ag economy and the impacts on U.S.-UK trade relationships.
After meetings with the National Farmers Union of England and the Department of the Environment, Food and Rural Affairs (DEFRA) in London, the Farm Bureau tour moved north to visit farms in Cambridgeshire.
The group also toured crop and livestock farms in Scotland and attended the Royal Highland Show, an annual event showcasing Scotland’s livestock, machinery and technical innovation, as well as providing educational workshops.
Washington County Farm Bureau member Tye Rinner said every farmer he talked to at the Royal Highland Show had a similar reaction when he asked about Brexit — expressing frustration about the impacts to farming.
While most farmers favored leaving the EU at the time of the Brexit vote, England National Farmers Union Vice President David Exwood said the trade impacts show the vote was a bad deal for agriculture.
After years of unimpeded trade, UK agricultural products now face export barriers to EU nations.
Additional inspections mean that it takes longer for meat and other products to reach their destinations and also makes exporting more expensive.
Farmers are also unhappy about a trade deal the government struck with New Zealand and Australia that provided very little benefit to UK farmers while exposing them to more competition from imports that don’t face the same level of environmental and animal welfare restrictions that are imposed on England’s farmers, said Nick von Westenholz, NFU’s director of trade and strategy.
“In the trade deals that were made, it’s obvious that agriculture wasn’t on their mind,” he said. “Australia basically grows the same things we do. Asking UK farmers to go toe-to-toe while maintaining their sustainability, environmental and animal welfare commitments significantly risks the longevity of the UK agricultural sector in the future.”
At a farm in Cambridgeshire, Iowa farmers saw a range of environmental practices implemented by Martin Lines, including hedge rows, buffers and acres set aside to attract wildlife and insects that provide natural control of crop-destroying pests.
England’s government regulations prohibit the use of many insecticides and herbicides on crop ground, which raises the cost of production for UK farmers.
Michael Johnson, a Page County Farm Bureau member, found UK agriculture to be much more highly regulated than he expected, emphasizing far-reaching sustainability objectives at the expense of production.
“It seems like those goals have been set by society and the government,” he said. “Farming here would be concerning to me in terms of what the future looks like because those kinds of things don’t tend to stop moving in that direction.”
Dave Bolin, a Butler County dairy farmer, said conversations with Lines and other UK farmers provided ideas that Iowa farmers can take back to their farms to benefit the environment while maintaining productivity.
“I think there are things we can learn but still use with our production. You have to remember, we need to produce food and feed people too,” Bolin said. “He’s taking land out of production, and he’s more concerned that land that’s feeding animals isn’t (growing crops that) feed people. I think that if we grow feed on some of this land for animals, we will feed even more people with milk or meat.”
The study tour also revealed obstacles to a potential trade agreement between the UK and United States, Pudenz said.
While the UK was initially eager to sign a trade deal with the U.S. following Brexit, negative reaction to the deals with Australia and New Zealand has caused negotiators to push the pause button.
“My take on trade is that it depends on who you talk to,” said Pudenz.
Farmers and trade negotiators hold a more pessimistic view of a trade deal with the U.S., but agribusiness representatives sound more optimistic, he said.
Johnson said he sensed UK farmers are opposed to future trade deals unless incoming products are held to the same standards domestically.
“There’s opportunity for us because we can produce a high quality, lower cost option,” he said. “For them, I’m not sure how many opportunities they see. There is some variance in what we produce — they do a lot more sheep — but even there, I don’t see a ton of opportunities on their side of things.”
Pudenz said there could be an opportunity for increased U.S. pork exports to the UK due to declining European pork production. However, he said any trade deal is likely to take time.
“I look at the factors in play, and I look at the United States’ strength — and especially Iowa’s strength — as a pork producer, and I see a potential market opportunity for U.S. pork producers,” said Pudenz.
“We could see the UK as a potential future market for pork and beef in the future. But how long is the future? That could be a 5- to 10-year play. I don’t think it happens in the next three years.”
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