opinion LOOKING FOR A DEAL?


By the time that this edition of Feed Compounder is in the hands of its readers, there will be barely a month before the deadline, set on 15 June by Prime Minister Boris Johnson, for the conclusion of the detailed negotiations governing future trading and other relationships between the United Kingdom and the remaining countries of the European Union. The ten weeks following that deadline will be spent in preparing the detailed texts and other provisions that will characterise those relationships from 1 January 2021onwards. It may be that much has been going on behind the scenes and that


negotiations between the UK and the EU are further advanced than would appear at first sight. The prospect of an early agreement would, however, seem to have been diminished by recent political events in Westminster. In the overall context of the negotiations, the Economist magazine noted that it was ‘staggering to see a British minister brazenly admit to Parliament that the government intends to breach international law’. Yet that is what Brandon Lewis, the Northern Ireland secretary, did. The relevance of this to the overall debate on the future shape of Britain’s trading relationships with the EU and other countries is that, as the Democratic speaker of the U.S. House of Representatives, Nancy Pelosi has warned the UK, there will be ‘absolutely no chance’ of a trade deal with Washington passing Congress should the government override the Brexit withdrawal agreement signed by Boris Johnson. It has been widely pointed out that the UK needs to replace trade deals with many countries negotiated via the EU; the reaction to Mr Lewis suggests that the sentiments expressed by Ms Pelosi as regards potential trade deals with the U.S. would be widely echoed in other prospective trading partners. As far as the livestock feed industry in the UK is concerned, there


is a widespread body of EU legislation governing a substantial part of the activities of the feed industry. Where the UK is involved, imports of raw materials, including U.S. and Brazilian soybeans, form an important component, while exports are small in volume terms but frequently have a high unit value. Nevertheless, in the absence of any deal with the EU, rules regarding the feed industry would be translated directly into domestic legislation before being considered in the wider context of future agricultural policy development in the UK. What would be the key components of any deal between the UK


and the EU-27 as regards the livestock feed industry? This will depend, at least in part, on the evolution of British agricultural policy which, in its current form, appears to be directed towards the reduction of direct payments – the Basic Payments Scheme – and their replacement by


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payments for environmental activities. Concerns have been expressed that smaller farms in the UK would not have the financial resources to undertake the latter and would thus be disadvantaged compared to their larger compatriots – this appears to be a legitimate concern that should be addressed in due course. At the root of the debate is the question of what are the future policy options for agriculture in the UK. Much discussion has revolved around the cost of the Common


Agriculture Policy as a proportion of the total EU budget and it is inevitable that costs should feature largely in discussions of the future evolution of UK agriculture policy. At one end of the spectrum is what may be termed the minimalist approach which would rely on relative costs to define policy. At the other end of the spectrum, agricultural policy would be defined on a much wider basis, including basic assessments of the need for self-sufficiency – in other words, the proportion of the UK’s food to be produced domestically. The UK’s membership of the EU largely defined the latter, via the operation of the Common Agricultural Policy; a serious debate on the question needs to be recommenced following the completion of Brexit. As regards the question of whether a deal with the EU-27 should be


a policy objective of the UK, given the current circumstances, it needs to be borne in minds that a significant proportion of the UK’s food supplies are currently sourced from within the EU. The primary objective should be as free a degree of trade as possible. This, it should be noted, is likely to generate its own tensions; for example, concluding free trade agreements with other countries will be more difficult as they may ask for less stringent rules than applied by the EU, forcing Britain to choose between EU requirements and what third countries demand. That is particularly likely to happen in the context of agriculture and food in a free trade agreement with the United States. The EU will not allow American agriculture and food with what they characterize as ‘lower’ standards to enter its market from Britain; inevitably the question of chlorinated chicken comes to mind. Where does this currently leave the livestock feed industry in


the UK? As always, the primary consideration will be domestic demand of


livestock feed but there is also a significant demand for feed for livestock destined for export; feed for pigs is particularly significant in this context. Broadly, the industry should seek to argue for the greatest degree of free trade with the EU-27. In the immediate context, however, the industry should also continue planning for a ‘no deal’ outcome.


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