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Fred Searle

BY FRED SEARLE

What does Brexit mean for UK fresh produce?

The last-minute agreement with Brussels is a relief for Britain's fresh produce trade, but supply chains are set to get slower, more complicated and more expensive. Here's how the industry reacted to the deal

What does Brexit mean for UK fresh produce?

Border delays remain a real concern

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After three-and-half years of painstaking negotiations and posturing, Britain has finally reached a Brexit deal with the European Union – but what does it mean for UK agriculture, and what does the sector make of it?

Generally, the trade has reacted with relief and caution to the agreement, which was announced on Christmas Eve and received parliamentary backing on 30 December. However, some, including FDF chief Ian Wright, have voiced frustration that the deal was left to the 11th hour, making supply disruption likely.

The deal means free trade with the EU in most agricultural products, including fresh fruit and vegetables, will continue. But the industry will face new border checks, customs declarations and additional paperwork such as export health certificates. This looks likely to lead to border delays and price increases in some products.

The continuing absence of tariffs has been broadly welcomed by the fresh produce sector, with the UK importing 67 per cent of all its fresh produce, a third of which comes from the EU. It is also good news for exporters reliant on the EU market.

Seed potatoes

Unfortunately, Scotland’s seed potato sector has been hit hard by the deal, with £13.5m of exports in doubt following the end of the Brexit transition period.

As a member state of the EU, the UK exported 30,000 tonnes of British seed potatoes to the mainland Europe each winter, but trade looks unlikely to continue because the EU refused to grant the UK 'third country' status for the product.

British seed potato growers, who are mostly based in Scotland, had been racing to export as much of this year’s crop to European countries such as Germany, Ireland and France before the transition period ended on 31 December.

Ware potatoes

The future of ware potato exports to Europe was also in doubt, but thankfully a last-minute agreement was reached by the EU, granting the product 'third country' status and allowing trade to continue. 

Given that Britain currently exports around 100,000t of ware potatoes to the Republic of Ireland each year, the EU is an important export market for UK potato growers.

Nationwide Produce managing director Tim O’Malley, who had been campaigning for the EU to grant ware potatoes so-called ‘third-party equivalence’, described the announcement as “better late than never”.

Organics

There was also welcome news for the organics sector after the EU agreed to recognise the UK as equivalent for organics until 31 December 2023, extending the 12-month agreement that had previously been made. 

From 1 January 2021, the UK is expected to work to organic standards based on the current EU organic regulation. Although the EU will move to a new EU Organic Regulation in 2022, it is expected that UK certifiers will continue to apply the existing EU regulation for a minimum of three years, according to the Soil Association.

UK farming groups had feared a potential ban on organic food exports if talks surrounding post-Brexit organics equivalence agreements failed, but the European Commission’s decision means the UK’s six organic certification bodies will now be recognised for the next three years.

The move will ensure continued access to the vital EU and Northern Irish markets and bring certainty to producers, the NFU said. The UK is the world's ninth organic market and sales of organic produce to the EU are worth £225m every year.

Industry reaction

Here’s what some of the industry’s key voices said about the Brexit deal.

NFU president Minette Batters said: “The successful conclusion of a deal between the UK and EU is very positive news for British agriculture. The EU is our largest trading partner and we have been clear throughout negotiations that maintaining tariff-free access to the EU market is absolutely crucial for our food and farming industry, not only for farmers’ businesses and livelihoods, but for our ability to continue to provide a secure supply of quality, homegrown food for the nation.

“We will now analyse the details of this agreement to ensure it meets the needs of British food and farming. The tariff-free element will be a particular relief for farmers that rely heavily on the EU export market, such as our sheep farmers, as well as farmers across British agriculture that produce the safe, traceable and affordable food that underpins more than £14 billion worth of export sales each year to the EU. 

“It does remain the case though that our relationship with the EU will experience a fundamental change at the end of the transition period on 1 January 2021 and we do anticipate that there will still be disruption to trade at the border. 

“New checks, paperwork and requirements on traders will add costs and complexity. It is vital government does all it can now to prioritise exports of our high quality, perishable agricultural products to make sure that these products are not left languishing in queues at the border when the changes take effect.”

FDF chief executive Ian Wright said: “UK food and drink is breathing a sigh of relief that we have a deal but we will hold the celebrations until we have scrutinised the detail. We must first answer key questions about which individual sectors of the industry will be unable to access the EU market without facing tariffs under the agreed rules of origin.

“We welcome the prospect of a more constructive approach to enforcing new rules, on both sides of the border. We hope for a much more collaborative relationship between London and member states with the minimisation of disruption at the border due to new trade frictions introduced as a priority.

“The Prime Minister promised UK businesses over a year of transition in which to adapt to a new set of rules. He has delivered us four working days. Food and drink manufacturers will do their best to keep food flowing. However, the chaos at Dover and the last gasp nature of this deal means that there will be significant disruption to supply and some prices will rise. Disappointed shoppers and consumers will rightly ask why a deal had to take so long.”

Organic Farmers and Growers (OF&G) chief executive Roger Kerr said: “We are pleased that a trade and security agreement has been reached between the EU and the UK and within it there is a three-year national organic equivalency agreement – something we have been calling for from the outset of the negotiations. 

“A three-year arrangement is welcome as it simplifies labelling requirements and provides more certainty  than the 12-month individual control body recognition.

“We hope that the UK can negotiate a further agreement to avoid the need for Certificates of Inspection for goods coming from and going to the EU from GB, similar to the arrangement Switzerland currently have with the EU. This would further reduce the cost and bureaucratic burden of UK and EU businesses and help facilitate trade.”

Logistics UK policy director Elizabeth de Jong said: “A deal is great news for the UK economy since it removes the risk of tariffs being placed on almost every item imported from the EU, which would have raised prices and slowed the rate of economic growth.  

“We are still absorbing all the details, but it looks as though HGVs will continue to have access to the EU market, and aircraft will still be permitted to fly to and from the EU, which safeguards the UK’s highly interconnected supply chains and protects the jobs of those charged with keeping the country stocked with the goods it needs.

“Meanwhile, Logistics UK is urging traders to continue to get ready for new trading conditions as they were before, as the new trading relationship will still require many of the same preparations, not least the introduction of customs declarations and additional checks on food and livestock.  Logistics UK is advising traders not leave paperwork to the last minute, or ignore it, as this will cause delays to journeys.”

Cold Chain Federation chief executive Shane Brennan said: “Cold chain businesses will breathe a sigh of relief today. A deal avoids the certain collapse of key export markets and tariff related price inflation for thousands of food lines. Above all we hope it allows a spirit of collaboration in working out how the new systems, paperwork and border traffic flows will work. 

“The thousands of Europeans currently stranded in Southern England are proof of the costs of not working together, and so we have to learn the lessons of the ongoing crisis as we implement this deal. 

“The real implementation period for this deal starts now. Businesses must renegotiate commercial deals, rethink supply lines, retrain staff and restructure businesses. 

“I know that in time our economy will thrive, because our great food, pharma and logistics businesses will make sure it does, but our food chain will be slower, more complex and more expensive for months if not years. Brexit is not done; the real work starts now.”

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