Britain certainly stood up and was counted this week wasn’t it! Whichever direction you took, the immediate effect was felt across the world. Chris Hutchinson, chair of the tenants at Spitalfields reported on Friday morning that import prices rose by 10% as the pound fell overnight, the pound initially rallied somewhat but the financial cost of a weaker currency will be felt across produce in the weeks to come.
The Master Fruiterer, stated that ‘Friday was the blackest day for Britain since the outbreak of the Second World War’. But we are British and we will make the best of what we are handed and there are opportunities, aren’t there?
Speaking with Ali Capper, chair of the horticultural board for the NFU, she said: “Our biggest issue remains labour, we had challenges with that in the EU, so there is no change there, we still need this and an immediate solution to permits and managed access is imperative.” Look at crop protection for instance, also a major source of challenge, perhaps now British growers have an opportunity to manage the development of a UK Maximum Residue Levels (MRL) regime for home produced and consumed food; look at the situation in imported produce that have used certain actives withdrawn in the UK, there is surely no question that we would be allowed to use them ourselves? The opportunity presented by the adaption of an international protocol, perhaps using the USA IR4 regime, would enable us to shape a list and a policy around this? Ali continues “The most important point for the UK is that we have a level playing field with produce coming into our market place, all using the same group of environmentally safe products as those from our principal importing nations across all areas, both food, plants and ornamentals.” Ali also reminded me that we need to be mindful of those elements of subsidised working that have an easily calculable ROI, Producer Organisations (PO) being a point in case. It is very important that the UK Government creates or replicates the structure to encourage cooperative working, there is an expectation within the NFU that the government would be looking to be emulating a scheme of some description.
What has been the viewpoint from a fruit grower? I approached the Goatham family for their take on the result, Ross Goatham said: “Our primary business objective remains to increase the quantity and quality of British grown apples and pears available to the public. We urge retailers and consumers to support the British economy at this volatile time by buying British produce and goods and therefore supporting British growers, farmers and other sectors of the economy.”
The marketing desks are taking a similarly pragmatic tone, I spoke with Ashley Bernhard, MD of Avalon Produce who said: “Top fruit investment requires a longer term view of changes in the economy than other food producers. Confidence is the key to maintaining levels of investment.” When talking about confidence in the future he said: “The referendum result will impact that confidence in the short term. EU grants via the POs have been an effective source of funding and it is essential that horticulture finds its voice in the coming months to ensure that an appropriate format for replacement funding is put in place without delay. In the past horticulture has been pushed to the back of the queue.” He also expressed concerns about our ability to harvest our crops. “The impact on the labour market and land prices is extremely difficult to predict; we know what we are losing but we don’t know what it will be replaced with. Again, decisions in Westminster will have a huge impact in these areas. In the short term, we are concerned that these uncertainties will destabilise the growing environment.”
However he does remain positive about the robustness of the top fruit industry and that longer term all of the issues will be addressed; the biggest challenge is to reach that stability as soon as possible. He said: “The key task for UK horticulture is to find the conduit to ensure that it gets fair representation in the new order.”
When I spoke to Chris Hutchinson from New Spitalfields, his immediate reaction was that it was a disaster. He said: “Our business is so intertwined in Europe”. Will it change trading? I asked. “Well I don’t think that there will be instant changes but the continent are geared up to feed the UK, we need Dutch produce and with prices rising due to the falling value of the pound, produce will be more expensive. In the long term I see this result as terribly detrimental, food service contracts are a big part of trade on the market, big city companies are preparing to leave us. In my opinion we need taxes to fund the NHS, big businesses make a massive contribution and it is a very sad day for Great Britain, not a step towards greatness in my opinion.”
I also spoke with Jess Latchford who led the debate on food waste at the recent London Produce Show. Jess is the MD of Waste Knot, a rapidly rising voice in the campaign to repurpose waste in the national food chain, she said: “The fall in the value of the pound against the euro and the dollar makes us more competitive as it’s cheaper for international buyers to purchase our produce (getting more for their money) which should in turn increase their production on UK farms due to increased demand.
“Likewise, the cost of importing to the UK has now risen which I would hope would lead to retailers focusing more on homegrown produce.”
Waste in retail ultimately will remain the same as it is purely down to estimating stock levels correctly. With regards to feeding low income families, short term, Jess Latchford doesn’t anticipate any impact on the price of food. Long term, any increases in costs of produce from the EU incurred due to (in her opinion, very unlikely) trade tariffs being imposed by EU countries would likely be offset by our unrestricted access to global producers outside the EU.
Speaking with William White, the regional director of the NFU, his view was that “the vote to leave the European Union has caused inevitable uncertainty and the enormity of the task ahead is only really just starting to sink in as farmers and growers wonder about things as diverse as the future of their PO and whether the John Deere European parts system will continue to recognise the UK. Britain’s farmers will rightly want to know the impact on their businesses as a matter of urgency.”
The fact that British farming is the bedrock of the £108bn food and drink industry – Britain’s largest manufacturing sector, counts for a lot in terms of what happens from here. The NFU intends to be at the front of the queue in discussions with DEFRA – the aim of the union is to secure an early commitment that British farming is not disadvantaged. Rest assured there’ll be a multitude of siren voices wishing to influence future policy and these voices are unlikely to be taking the side of progressive modern agriculture.
There is an extraordinary meeting of NFU Council on Friday 1 July where the detail of future agricultural policy and legislation will be thrashed out. While policy won’t be arrived at in a rush, our first lobbying event has been scheduled to take place on 5 July where Union representatives will set out their early aims to maintain access to markets, labour and to engage with government to secure the best deal for British agriculture.
Politics is coming home now and over the months ahead I think you’ll see the relevance and strength of NFU lobbying power coming into its own.
Everyone I have spoken to has returned to the question of trade and there was a degree of consensus that coming out of the EU gives us an opportunity to manage imports during our peak season. But that we need really good negotiators in place immediately who will broaden our marketplace globally; some commercially astute individuals who understand the market place, trading conditions and the production quality involved. A low pound is good for farmers and with the combination of the National Living Wage and the race with the discounters, we as farmers will have to make the best of this vote. We must get on with it, as competitively as possible.
Additional writing by Cameron Stone of Cranbrook School
So how will leaving actually work, and what happens now? In analysing the press so far we find that the process of leaving the European Union is one that will take time and no matter the current political climate, things will begin to slow down as the long and arduous process of negotiation begins.
To start the formal process of leaving the EU our Sovereign must trigger Article 50 of the Lisbon treaty, by doing this we give up any position of power and influence that we once had. From the moment we invoke article 50 we become powerless within the union, any debate or change at a high level that could well affect the UK over the years that we remain in the EU, is out of our control.
This period of time in between being part of the EU and being independent is where much of the uncertainty lies. Without having completely left Europe it is hard for us to put into action the plans that we might have moving onwards as an independent group, yet we no longer have any power within the union that we technically still reside in.
This no man’s land situation has never occurred before, and we are left powerless during the reference period which could last between two and five years, this however only encompasses the process of leaving the EU, agreeing on UK and EU trade could take considerably longer. To quote Michael Dougan, a European Law professor: “The overwhelming consensus is that these things do not take two years to negotiate, the rough guide that we are all talking about in the field is around 10 years.” During this time a lot could change and events could be altered drastically by a change in power or changes in society.
However, once the primary negotiations have ended and we have left the EU we can begin to make the changes that we feel necessary. And from this point onwards new economic growth can take place with both small and larger businesses, 74% of British firms believe that Britain can continue to grow and be influential on an international scale. This new possible growth promises benefits to all, with the right trade agreements and cooperation from Europe and the rest of the world we could see an impact as high as 1.6% on UK GDP.
On the other side of the argument we have to accept that the response from the EU might not be favourable, and that bitterness at our leaving the EU and its effect on the stability of the whole union could negatively impact on our trade agreements with Europe. The outcome of the referendum will not be seen for the next few years and ultimately our fate lies in the hands of the 27 member states. The UK has always been a friend and an ally throughout both formation and duration of our EU membership. With all of this in mind we can hope that friendship between the member states and the UK can continue.
