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By Andrew Fearn

Jul 6th, 2016

Impact of Brexit on the Agricultural Sector

So…it has happened and we are on the way out of the EU. The panic and speculation of the first few days after the vote have been replaced by a more reflective consideration of the implications of the decision. The political fall-out which has followed is unprecedented and it seems that we are genuinely in uncharted waters, says Andrew Fearn.

Estimates of the likely timescale of the UK’s exit varies widely but it seems probable that it will not be before 2018. That means at least 2 more years of the Basic Payment Scheme for farmers. That idea will produce a hollow laugh from the many thousands of farmers who have yet to be paid, partly or in full, as a consequence of their applications in May 2015. At least, in theory, there is a degree of certainty in the budgeting processes for the next year or so.

Thereafter, it remains to be seen. What level of support will the government of the day decide is appropriate? How will the competing requirements of the NHS and education budgets, for example, impact upon the amount available for agri-support. Will any new scheme look like the present version? More importantly, can DEFRA and the RPA devote sufficient resources and expertise to the project to ensure a smooth transition and timely payments to farmers?

All massive questions, of course, but the answers are critical for the welfare and prosperity of the agricultural sector. Uncertainty is likely to inhibit agri-business activity and, at the present time, that is the last thing that the industry needs!

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