The real impact of a free trade deal with Australia will be felt by British farmers a decade from the end of direct support payments, industry executives say.
Prime Minister Boris Johnson announced last month that the UK has signed a principle Free Trade Agreement (FTA) between the UK and Australia.
The government has said tariffs and quotas on Australian agri-food products will be phased out over the next 15 years “to allow farmers to adjust to the new business environment.”
Farm leaders and economists were asked what the deal is likely to mean for the agricultural sector, its high standards and future trade at a multi-stakeholder session of the UK Trade and Business Commission on Thursday (July 1).
Former NFU chief economist Sean Rickard has predicted little will change over the next two years, but significant changes will be felt in 10 to 15 years.
“We know there are always winners and losers when it comes to trade negotiations,” he said.
“It just looks like agriculture is going to bear a disproportionate cost from this deal, and what worries me is that these are the model deals that will be made with others.”
He added, “In a year or two, we won’t see much of a difference… In 15 years, you potentially have a huge impact on an agricultural industry.
“I think the government is aware of this. When you look at the Farm Act, it’s not about growing food now. It is about encouraging farmers to do something other than produce food.
“They are preparing to downsize the agricultural industry. I think it’s such a waste of huge potential and opportunity. “
Phil Stocker, chief executive of the National Sheep Association, said Australia is a “very efficient” agri-food exporter and the “world’s largest exporter of sheepmeat”.
Larger volumes of Australian sheepmeat imports in about 10 years would bring prices down, he suggested.
“This is really concerning as this is likely to happen at a time when the basic payment is being withdrawn from farmers.”
Much of the testimony we have heard today has highlighted the clear benefits of the UK-Australia trade deal for the Australian market, with little detail yet on what the UK will gain.
– UK Trade and Business Commission (@UKTradeBusiness) July 1, 2021
Jilly Greed, Devon beef farmer and co-founder of Ladies in Beef, described the FTA as an ‘absolute betrayal’ by the UK government of the high animal welfare and environmental standards of UK agriculture.
“It’s like Christmas for Australia, then the other big exporters are behind New Zealand, Brazil and the United States,” she said.
“Currently there are around 3,700 tonnes of Australian product entering this country. This will increase to 45 times that amount to 170,000 t in 15 years.
“The current quantity of total imported products is around 240,000 t. We are only about 65% self-sufficient. This will undoubtedly have an impact.
Dmitry Grozoubinski, a former Australian diplomat and trade negotiator at the World Trade Organization, said three scenarios were possible.
First, Australia could significantly increase its red meat exports to the UK, which would lower prices and mean “Jilly [Greed] and his colleagues will be injured ”.
Second, Australia could continue to target its exports to its most lucrative markets in Asia, North America and the Middle East. In this scenario, “things stay pretty much as they are, which means the benefits to the consumer are almost nil.”
The most likely outcome was “somewhere in the middle,” said Grozoubinski, where Australian beef and lamb imports are increasing, providing more options for restaurateurs and packaged food.
“The impact on farmers will really depend on the extent of adoption by Australia,” he added.
The government’s own estimates suggest that the UK-Australia deal will only increase GDP by 0.02%, but Australia is expected to benefit from an increase in exports six times that of the United Kingdom. Great Britain thanks to the agreement.
No impact analysis
Farm leaders say they are concerned that the government has not carried out an impact assessment on the effect of an Australian FTA on the UK agricultural industry.
Caroline Lucas, Green Party MP for Brighton Pavilion, who chaired the session, said: “In its rush to grab the headlines, the government has compromised our standards, our climate commitments and even the livelihoods of our farmers.
“We will use today’s evidence to make constructive recommendations on how this can be improved, but we urge the government to stand firm and defend Britain in future negotiations rather than coming back for strike a quick deal. “
A spokesperson for the Department for International Trade said: “Any deal we sign will include protections for the agricultural industry and will not undermine UK farmers or compromise our high standards.”
The government has questions to answer on the standards line
The government is committed to protecting British agricultural standards in any post-Brexit trade deal – and it is adamant that this remains the case.
However, farm leaders are wondering how this will be possible if the UK concludes an FTA with Australia, where agricultural standards are lower than in the UK.
During the session, Jilly Greed said Australia produces 40% hormone beef, a method banned in the EU. “They put a lozenge under the animal’s ear and it accelerates growth by up to 30%.”
When transporting livestock, cattle in Australia can travel for up to 24 hours without food or water. But in the UK, the government plans to ban live animal exports and cut cattle travel times to a maximum of eight hours.
National Sheep Association chief executive Phil Stocker said the maximum travel time for transporting sheep to Australia is 48 hours without unloading, rest or water.
On the farm, Mr Stocker said Australian sheep farmers used “mulesing” on around 60% of the sheep.
This controversial method involves removing strips of skin from the hindquarters of sheep without using anesthetic to prevent attacks from flies and maggots.
“Our consumers here would be absolutely horrified if they knew we are buying lamb products that have been mules,” he added.
David Bowles, public affairs manager at the RSPCA, said the charity named six animal welfare differences between the UK and Australia in the beef sector and a couple in the sheep sector .
A free trade agreement is being signed with Australia that could allow lower welfare imports. It would be a big mistake; animals, the public and farmers deserve better. We will now push for the protection of our standards as part of the agreement https://t.co/9hwotAAOmv #ActNowForAnimals pic.twitter.com/uJvdEPU9gq
– RSPCA (England and Wales) (@RSPCA_official) June 15, 2021
“Yesterday the European Commission said it was going to get rid of the cages [in farming], but more importantly, in all future FTAs, they would require equivalence in animal welfare. The UK didn’t do that ” @ DavidBowles21 of @RSPCA_official on animal welfare standards during today’s session pic.twitter.com/KyeBJLoBqv
– UK Trade and Business Commission (@UKTradeBusiness) July 1, 2021
Mr Bowles said: “The government has said in its manifesto that it will not compromise on animal welfare standards in any free trade agreement. What does it mean?
“Does that mean we won’t lower them?” Well that’s fine, but if you don’t have equivalency or conditionality in your FTA, that means you are exporting your welfare standards.
“I think the government is timid, but a more reasonable way of saying that it is misleading as to what it has done.”