BREXIT AND THE EQUIVALENCE OF STANDARDS

This post first appeared online at http://www.thatsfarming.com on the 3rd July 2017

One can hear the first post-election murmurings about British farming policy after Brexit and one can see that it is going to be about appealing to the highly urban British electorate and the interests of, for want of a better term, agri-business.

Britain is going to raise the standard of its foods whilst producing more. It is about protecting the environment and having less regulation. There will be free-trade agreements whilst not joining a race to the bottom on food standards. It will appeal to the masses and protect the interests of a few. It will be a myriad of finely-balanced juxtapositions!

First up is a moratorium on live exports for (presumably) slaughter. This is only a consolidation of the position already attained by the animal rights movement. It will be popular and it will be an easy political points scorer. Will it even have much impact upon the British livestock farmer?

Will the British farmer, nonetheless, insist that such a no-live-export standard is imposed upon countries that sell into the British market? Probably not in the context of a formal trade agreement as compromises will be reached here, there and everywhere and this will be one. Others will be found to facilitate the signing of trade agreements. In simplistic terms, this will mean that the UK market will be open to, for example, hormone-reared beef from the USA. But will it?

There is the assumption that allowing means happening. Such imports may happen but will they be significant? Nowadays to supply a UK supermarket you almost certainly must be quality-assured. It is not a premium attribute, it is a necessity for market entry. It is why Irish farmers have had to implement pan-industry farm assurance. It costs money and delivers little beyond preserving market access, but it is now a necessity. It is a baseline standard imposed by the food supply-chain.

Free trade does not mean the removal of all market differentiation to the point that only the bottom rung of the ladder exists. Ireland itself has sought to move that bottom rung up a few staves. The QA schemes will stand it in good stead post-Brexit, even if that is only about supplying, as of now, the budget ranges of three major UK supermarkets and the food service sector.

I can see that UK farming and food policy will be about raising UK production standards AND allowing greater market access from outside. The raising of UK standards will relate to all sorts of environmental, food security and animal welfare issues and some will be formalized and others not. The latter will be built into more extensive quality-assurance schemes. The formal will be avoided as it will be difficult to negotiate trade deals, EU accepting, with such standards in place. Hence, it will be about ‘informal’ standards, albeit ones that are tacitly supported by the UK government. It will be about allowing the consumer to choose and, through that choice, supply-chain players imposing the standards themselves. Thus, these will fall outside the scope of new trade-agreements.

I doubt if it will be possible to grow more, sell more and export more whilst standards are raised. Typically, higher quality and higher production are not happy bedfellows. The grow more approach may, ultimately, be sacrificed to the raising of environmental standards and the pursuit of farming systems that the wider populace will accept as truly sustainable. And there may already be too much advocacy power aligned against sustainable intensification for the concept to survive consumer scrutiny as food standards become increasingly defined by consumer perception.

To market liberalists free-trade and allowing comparative advantage to function are ideals. They are also ones that can be met by the export more high-quality British produce line. The cost structure of British farms make competing with global producers difficult so British farmers will be encouraged to adopt higher standards and to export premium, highly-traceable, produce to the rest of the World. At the same time, free-traders will be happy to see basic commodities imported; albeit ones that are produced with baseline farm assurance. It is simple trade theory that can be followed if British producers buy into aggressively raising their own standards in a way that this is clearly understood and supported by British consumers and foreign buyers. UK farmers will supply the higher ends of the domestic and export markets, whilst lower-value commodities are imported into Britain to underpin a lower-cost-foods approach towards a part of the UK population.

So where does this leave Ireland? Does the country wish to be a global player and to compete with, say, Argentina? Or does it wish to compete further up the ladder of market standards? And this is not just about in the UK market, it is about elsewhere as the UK farmer and food producer is clearly going to be pointed at the same premium international markets that Ireland aspires to. Ireland’s first response to Brexit should be to fully comprehend what is happening in the UK and to ensure that it has at least an equivalence of some standards, as it now has through its farm assurance schemes.

It is possible that the UK will raise the food standards bar as it devises a food and farming policy that meets a multitude of objectives. These will impact upon Irish farmers and food producers both in their key UK market and elsewhere. Hence, Ireland needs to understand exactly what is happening in the UK food markets and in how farming and food production and its array of related standards is evolving. Ireland will need to innovate but it will be less about factory-produced products and more about how products reflect rising environmental standards and consumer concerns about farming practices. Ireland needs to be researching all aspects of the food chains, but is it? Or is it going to face a market-knowledge shortfall for which its farmers will pay dearly further down the road?

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