The document discusses the potential effects of Brexit on UK agriculture and landscapes over the coming years. It outlines different Brexit scenarios from a hard Brexit with no deal to a soft Brexit with close EU ties. Economic analyses have found that introducing trade friction through tariffs or regulatory divergence could damage export-reliant UK farm sectors and raise food prices. The impacts would depend on future trade and agricultural support policies. Protected landscapes like national parks may be more vulnerable due to their reliance on grazing livestock and EU supports. The consequences for farming and landscapes remain uncertain as negotiations continue.

1. The possible effects of Brexit on our
landscapes
25th July 2018
Emeritus Professor Allan Buckwell
Senior Research Fellow
Landscapes for life
Conference 2018
University of Kent, Canterbury

2. Agriculture and Land Management
The possible effects of Brexit on our
landscapes
Two preliminaries:
Brexit is a 5-10 year process not an event
Agricultural market fundamentals not threatened, other much more
serious threats, the sustainability of current consumption/production
• The strategic Brexit questions are UK trade relations with the
EU and RoW, and domestic agricultural policies
– Hard Brexit
– Soft Brexit
– July White paper – a third way?
• The economic impacts of more trade friction than now
• Much analysis exists: but all hinges on assumptions
• Some qualitative thoughts about impacts for landscape

3. Time line for Brexit & UK agricultural policy
2018 2019 2020 2021 2022 2023 2024 2025
Exit EU
29/3/19 21 Month
Implementation
Period
Commencement of new
relationship with EU
BPS
as now
BPS
as now
BPS
capped 1
BPS
capped 2
BPS
capped 3
BPS
capped 4
BPS
capped 5
EU CAP Agricultural Transitional to escape the CAP New UK Ag Policy
UK General
Election 9/6/22
Backstop period
For NI, or whole UK?
Agriculture Bill expected summer ‘18, now coming later . . .

4. 4Slide presented by Michel Barnier to
European Council meeting 15 Dec 2017
Implications of UK ‘red lines’
Norway
Iceland
Liechenstein
Switzerland
Ukraine
Turkey
S Korea
Canada

5. 5
• Hard Brexit is to leave
– The EU because 52% of those voting (37% of electorate) said so
– The Single Market because we want to: restrict free movement of
labour, escape ECJ jurisdiction & avoid huge EU Budget
contributions.
– The Customs Union to be outside the EU Common External Tariff
(CET) and the EU’s FTAs, to be free to negotiate our own FTAs
• Brexiteers stress EU over-regulation; so we will deregulate,
there will be regulatory divergence = non alignment
• The aims are thus political, but with a belief that there is
economic benefit in the long run; damage limitation in
short run
• Benefits: getting back control (laws, borders, money)
deregulating, reaching better FTAs with 3rd countries
The logic of hard Brexit

6. 6
• Retaining the closest links with our nearest,
neighbours with whom we have most trade
• Reducing uncertainty, minimising disruption and the
the short run losses
• But: UK still subject to most EU regulation (but with no
vote over how it evolves) & to the ECJ, & will still make
sizable budget contributions.
• It is a half-in half-out option.
• Most advocates of soft Brexit would agree that full EU
Membership would be preferable.
The logic of soft Brexit

7. 7
The future relationship between the UK and the EU
1. UK leaves the EU, Single Market & Customs Union
2. UK negotiates a Free Trade Area (FTA) for goods with EU, UK applies “common
rulebook” avoiding customs &regulatory checks, and hard N Ireland border
3. We agree a Facilitated Customs Arrangement to avoid border checks, UK collects
UK and EU tariffs
4. New bespoke arrangement for services and digital
5. End of free movement of people; new immigration regime and new framework
to allow EU/UK citizens to travel both ways
6. Binding commitments to guarantee an open & fair trading environment, incl.
common rulebook on state aids, non-regression on Enviro. & Employmt.
7. Plus security partnership, cross cutting issues & institutions including dispute
settlement
But no impact analysis!
July 2018 White paper – a third way?

8. 8
• Primary and secondary legislation for agriculture is devolved; so too
are animal health, food safety & plant health.
• Three types of rules identified:
1. Sanitary and Phytosanitary rules - safeguarding human, animal & plant
health, these normally require border checks
2. Wider food policy, marketing and labelling, Geographic Indications
3. CAP (and CFP) regulations
• For 1, Common rulebook applies, so not border checks required
• 2 will be dealt with by the market with some reciprocal equivalence,
and a new UK GI system,
• For 3, as CAP is all decoupled, UK free to control its own subsidy
arrangements and can change its own tariffs and TRQs.
Some supreme optimism here.
Specifics on Agriculture and Food

9. 9
• Can it command support of UK Parliament? Is there a parliamentary majority
for any of the options?
• Is the proposal achievable? Barnier’s reactions are concerning. Has trust
been created?
• Proposal is at the soft end of the spectrum, key questions
– Can we really permanently respect EU rules we don’t make?
– Can EU accept UK Parliament correctly interprets the rule book?
– Will EU accept UK collecting EU tariffs?
– Are the bespoke arrangements too much cherry picking?
• Probablility is rising of either:
– protracted ‘back stop’/transition/extended A50 period whilst whole UK remains in
SM/CU, even beyond a general election (June 2022)
– Negotiation failure, no agreement, crash out (but maybe not until 1/1/21 – or later).
Chaos.
Implications of this basis for UK negotiation

10. 10
• EU: the world’s largest single market: free movement of goods,
services, capital & labour + harmonised regulatory standards & controls.
• This is as frictionless as possible to make trade. Even less friction in
Schengen and the Eurozone. EU has no customs controls at borders.
• Any move out of the EU, SM or CU, especially with regulatory
divergence will introduce more friction, and thus costs, than now.
• The three most discussed frictions are:
– Trade facilitation costs including customs controls, rules of origin
– Tariff barriers
– Non-tariff measures (NTM) – differing regulatory standards
• See Matthews (2017) for detailed analysis
Impact of introducing friction in trade

11. 11
• Distinguish the effects for imports vs exports.
• Any new friction
– for imports (M): prices rise for importer; production rises,
consumption falls, imports fall. I.e. more domestic protection
– for exports (X): prices fall for exporter; production falls,
consumption rises, exports fall, less domestic protection.
• Trade will diminish & divert
• Any further exchange rate change, (eg drop in €/£), reinforces
the price rise for imports, offsets some of price fall for exports.
• The bigger the new trade cost the larger these effects.
• UK has large net imports of food & agricultural produce from the
EU and RoW – food price inflation impact will be a concern.
The fundamental impact of additional costs

12. 12
UK Agricultural Policy
• Transitional process over 4 or 5 years
• Meanwhile:
– CAP supports as now continue for 2018 to 2019 or 2020 ?
– Will extend within similar support envelope until 2022 under CAP regulations transposed into UK
(EU Withdrawal Bill).
• Key issue are fate of CAP direct payments and labour.
– Reductions for larger payments, and phase out of basic payments
– More payments for public environmental goods
– Seasonal labour solution (SAWS) not grasped; no budging on FT unskilled labour
• Key vulnerabilities:
– Export based sectors highly dependent on CAP payments (lamb, barley)
– Sectors with high reliance on EU labour, eg horticulture, food processing, food service
• Broader longer questions:
– What is the UK approach to new technologies – digitisation, robotics, new genomics and
genetics? BIG emphasis on raising productivity. Do protected areas get left behind?
Meanwhile CAP is not static: reduced budget, new delivery model, Strategic goals for
both Pillars, large payments to be cut.
UK agricultural policy vs CAP

13. 13
• Analyses depend on assumptions & methodologies
• Static impact analysis of domestic policy & farm income
• Economic models allow adjustment in production,
consumption & trade as prices change, long run effects
• AHDB and Davis et al UK impacts, and Bellora et al EU
impacts
• Typical Policy scenarios analysed are:
• Trade relationship: Domestic Agric Policy
UK-EU27 Free Trade Area Status quo, CAP continues
No agreement, so WTO tariffs Support switches to Env PGs
Uni-lateral liberalisation Support cut, some switched
Much economic analysis of Brexit exists

14. 14
• Long transition + successful FTA with no regulatory change + modest
change in quantity of domestic support ⇒ little noticeable change.
• Over time, emergence of regulatory divergence will create significant
non-tariff barriers and trade friction. Some markets e.g. red meats &
barley could be very sensitive to these.
• WTO tariffs wreak damage to export sectors, protects UK, hurts EU
• Unilateral liberalisation damages all UK sectors
• Drastic unsympathetic change of CAP supports could worsen this
especially for the sectors most vulnerable to the ‘bad’ trade outcomes
(grazing livestock and cereals).
General results of these studies

15. 15
Couldn’t find analysis of farming characteristics in NPs and AONBs. I
assume on average, compared to (~70%) E&W not in these areas, NPs
and AONB:
– Have less agriculture, more forestry and wildlife areas/wetlands,
relatively less: intensive livestock (esp P&P), less Grade 1 land, field
scale veg. & protected horticulture. Maybe more general arable,
mixed & grazing livestock. More in N and W hence overall greater
dependence on grazing livestock
– Therefore have higher share of marginal farming activities & more
dependent on CAP supports.
– They make more use of rural development schemes: agri-enviro,
marketing, organic support, forest measures, diversification etc.
– Are just as exposed as food & agri generally to EU labour shortages
in food service & processing (slaughter houses, vet inspections)
No doubt with much variation between NPs & AONBs,
& within each category
Farming characteristics in National Parks & AONBs?

16. 16
• There is a potentially favourable outcome. The 25YEP + Review + new Ag policy based on
natural capital ➔ larger and better resourced rural policy.
• The disaster outcome (unilateral liberalisation) could lead to farm collapse and drastic reduction
in management and thus wholesale landscape change, but few are arguing for this.
• Within the broad possibilities, details of trade and domestic policy matter for individual sectors
and businesses. Some can be badly affected by some relatively small policy oversight.
• Localised business failure (including up or downstream) can impact on local community.
• Maybe protected areas are more exposed to the WTO tariff, and liberalisation possibilities.
Farm business failure implies farm restructuring, (bigger scale or more part time/not-first-
occupation farming). Could be +ve or –ve for landscape mgmt.
• Much depends on decisions on scale, generosity & ease of payment for Public Goods, and
farmer reactions. Recent experience is a bad place to start.
• Grazing livestock is in any case a threatened sector: lacks economic and environmental
sustainability.
Brexit impacts on farming in NPs and AONBs

17. 17
• Brexit could be a step up for landscape management – but such vibes are not strong
• Unclear which trade and domestic support scenario will come about: range of results
from very little change to widespread business failure.
• Protected landscapes are a little more vulnerable to the bad outcomes. They are also
more dependent on the domestic policy choices.
• More analysis is needed; there is time to do it.
• Tariffs on EU27 – UK trade will (artificially) further protect much UK farming, but
substantially reduce trade and stimulate EU27 to find other markets.
• Expect trade disputes as UK negotiates new trade agreements & departs from
regulatory alignment on standards and allowable technologies.
• Impacts will be more important for processed products than agricultural
commodities. But these reflect back to farm level.
• Uncertain bumpy road ahead and markets can over-react.
Concluding remarks

18. 18
• Matthews, A. (2017), Research for AGRI Committee – Possible
transitional arrangements related to agriculture in the light of the
future EU - UK relationship: institutional issues, European Parliament,
Policy Department for Structural and Cohesion Policies, Brussels
• Bradley D and Hill B (2017) Quantitative modelling for post-Brexit
scenarios, Agribusiness Consulting Informa, for AHDB
• Davis, J, Feng S, Patton M, Binfield J (Aug 2017) Impacts of Alternative
Post-Brexit Agreements on UK Agriculture: Sector Analyses using the
FAPRI-UK Model, FAPRI-UK Project, Agri-Food and Biosciences
Institute, Queens University Belfast. www.afbini.gov.uk
• Bellora, C., Emlinger, C., Fouré, J. And Guimbard, H. (2017), Research
for AGRI Committee, EU – UK agricultural trade: state of play and
possible impacts of Brexit, European Parliament, Policy Department
for Structural and Cohesion Policies, Brussels
References

19. 19
If you have been,
thanks for listening
allan.buckwell@gmail.com