Government claims that no deal with the EU is “better than a bad deal” after Brexit have been debunked by a new House of Lords report, which warned up to 97% of the UK’s food exports could be at risk in such a scenario.

Published less than a week after European Commission leaks suggested prime minister Theresa May and the EC’s positions on Brexit were “galaxies apart”, the long-awaited paper, by the Lords EU Energy and Environment Sub-Committee, suggested the government faced significant challenges over trade and exports, funding, food standards and labour in a post-Brexit agriculture sector.

The 92-page report, titled ‘Brexit: agriculture’ cited FDF evidence warning that the “overwhelming majority” (more than 70%) of the UK’s food & drink trade was with EU member states, rising to 94% of UK food imports and 97% of exports when including third countries with free-trade agreements with the EU.

It said the prospect of failing to agree a free-trade agreement with the EU and falling back on WTO rules would incur “substantial costs associated with tariff and non-tariff barriers when exporting to the EU, with sectors such as pig and sheepmeat at particular risk”.

The committee also doubted “UK participation in these [existing trade agreements] can be preserved after Brexit”. This potentially places access for UK food producers to external markets in the weeks and months after Brexit in doubt.

“It is essential, therefore, that the government should, as a matter of urgency, clarify whether or not such agreements could be grandfathered to preserve preferential trade arrangements for agri-food products,” the paper said.

While Brexit presented “an opportunity to tailor agriculture policies more closely to the differing needs of farmers and consumers across the UK”, the committee added the government would have to “work closely” with the agriculture sector in order to respond to these “critical challenges”, and would need to significantly boost the capabilities and budget of Defra.

Mixed messages

The government was currently giving “mixed messages” to the agricultural sector, added the committee, with the vision of the UK as a leading free-trade nation with low tariff barriers to the outside world, at odds with the declared commitment to high quality and welfare standards. Reconciling these two visions would be a “considerable challenge”, it said.

Tariff and non-tariff barriers could also disrupt integrated supply chains between the UK and the EU, and pose a particular challenge for the agri-food sector in Northern Ireland, the report added.

The committee also added its voice to the growing concerns over post-Brexit access to labour, and warned technology would not be able to “materially reduce the UK’s need for EU agricultural labour”, nor was there sufficient local labour to address the shortfall.

And in a pointed reference to claims the UK could forge trade links with non-EU countries if free-trade negotiations with the EU were to fail, the committee warned “for a considerable period of time”, it would not be possible to off-set lost EU trade “by increased trade with third countries or by expansion of domestic markets”.

The report concluded that without a trade deal with the EU, farmers risked high tariffs and non-tariff barriers on exports, “which would render their business uncompetitive”, while simultaneously having to adjust to a new UK policy for funding.

“This could have detrimental effects on an industry - and rural communities - which need long-term clarity and policy stability to adjust to the post-Brexit policy environment. Transitional arrangements will be critical to the long-term success of UK farming.”