BREXIT: A BRIEF LOOK AT THE AGRI-FOOD SECTOR


Elsewhere in this edition, Lauren Judd considers what trading under WTO rules implies, specifically in terms of what tariffs exist and how they might be applied. This brief article looks at some other aspects, above all some statistics on the agriculture and food sector in the UK, and then non-tariff considerations.


Let us start with some statistics (source: ONS), in 2016 agriculture   given sector or industry). However the agri-food sector as a whole, (i.e. food manufacturing, wholesale, retail and non-residential catering)  obviously substantial, but even more so when seen through the lens of UK employment, with the sector employing 3.9 Mln people, accounting  Bln in 2016. In terms of food consumed in 2016, 50% came from the UK, 30% from the EU, 4% each from Asia, Africa, North America and South America. The sector is thus very large, and will de facto be heavily impacted, whether there is or is not a Withdrawal, let alone a Free Trade Agreement


According to the National Farmers Union (NFU), the UK is the third cheapest producer of food in the world, though this appears to be based on a single metric, namely that UK farmers take just 6% of the value  business relationship between farmers and their producer and retailer customers. But it emphasizes that margins are extremely tight, and that any supply chain disruptions due to Brexit potentially an existential threat. One key area would be in the supply of animal medicines and vaccines, 95% of which are sourced from the EU, along with a high proportion of fertilizers and other agricultural chemicals.


Some may argue that the farming sector should be preparing for any form of Brexit by increasing production, (i.e. ‘onshoring’), but this is rather too glib from any number of aspects. For example, increasing production requires some fundamental assumptions about up front investment costs, be that equipment, land or raw materials, as well as access to (and the cost of) appropriately skilled labour.


20 | ADMISI - The Ghost In The Machine | January/February 2019


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