One year on and Brexit far from done

More action from the UK government is needed to solve asymmetric trade with the UK, labour shortages, the Northern Ireland protocol and seed potato trade block.

One year on from the UK’s departure from the EU, NFU Scotland has listed the top four outstanding issues facing agriculture.

Despite claims trade would be friction free the union claims the Trade and Co-operation Agreement (TCA), signed on 30 December 2020 still needs more work to bring about a new era of tariff-free and quota-free trade between the UK and the EU.

Unequal trade

One of the main gripes from Scottish farmers is the lack of border control inspections on produce entering the UK from the EU.

They feel that goods entering into the UK do not have to be checked to the standard of going the other way, from Britain to Europe.

Furthermore, they state the Northern Ireland Protocol is also damaging trade between Scotland and Northern Ireland.

Similarly, 12 months after Brexit, Scotland’s high-value, high health seed potatoes remain locked out of valuable European markets.

The labour shortage has still to disappear according to the union.

The offer of 30,000 migrant visas falls well short of the industry’s demand of 75,000 workers.

NFU Scotland’s director of policy Jonnie Hall claimed: “The home office was a law unto themselves” and stated that real traction is not being made on increasing the numbers of migrants to the farm and food sector. Hall pointed out that visas have risen in price from £65 to over £300.

He said: “Trade with the EU in the first 12 months of Brexit has been far from smooth.

“The friction at border controls for Scottish producers exporting to the EU, however, has been compounded by the UK government continuing to grant ‘grace periods’ to imports from the EU from similar controls.

“That asymmetric trade remains ongoing and is a damaging consequence of the UK’s lack of practical preparation for Brexit.

“Add in issues around specific products, such as seed potatoes, and specific issues, such as the Northern Ireland Protocol, and it’s clear that post-Brexit trade with the EU remains challenging at best and potentially damaging for some.

“Leaving the EU and the single market created other production, harvesting and supply chain issues across many sectors because of permanent and seasonal labour constraints.

“Meat sector processing challenges around staffing levels, felt most acutely by those in the pork industry, remain very fragile.

“And for the dairy, pig and poultry sectors, finding permanent staff has become increasingly difficult following our departure from Europe.

“However, the late and inadequate Seasonal Workers Pilot introduced by the UK government has left many growers in Scotland rethinking the risks around investing in high-value fruit and vegetable plants.

“Our horticultural sector punches way above its weight in Scottish agriculture, accounting for only 1% of our land area but 16% of our agricultural output.

“Access to seasonal labour in the field and in processing is key and we will be looking for a Seasonal Worker Scheme in 2022 that starts on time and goes beyond the 30,000 visas offered in this year’s pilot.

“Closer to home, the full implications of the UK Internal Market Act and the UK Subsidy Control Bill are yet to be realised in terms of just how level the UK’s single market will be. Trade with other parts of the UK remains the most important outlet for Scottish produce by far.

“Beyond the EU, the agreement in principle of free trade agreements with Australia and New Zealand has also cast a very dark shadow over UK and Scottish agriculture. While the full implications maybe a few years off, the so-called safeguards for domestic producers will provide little or no protection.

“It remains disappointing that, as we go into 2022, there remains so many Brexit unknowns. As things stand, the potential threats to Scottish agriculture continue to vastly outweigh the potential opportunities. “

Much work and greater commitment are needed from the UK government and NFU Scotland will continue its significant lobbying at Westminster in the interests of Scottish agriculture.”

The UK government has badly served the red meat processing sector in Scotland for the last 12 months, according to Scottish Association of Meat Wholesalers (SAMW).

The lack of a workable and practicable visa scheme, through which to recruit skilled staff from EU countries, coupled with ever rising costs from all directions, has placed Scotland’s red meat sector in an extremely challenging position as we enter 2022.

While acknowledging that COVID-19 created a massive “beyond control” challenge for the government in 2021, SAMW says members feel they have been failed on a range of pertinent issues.

No real help

“Maintaining our workforce at a level that keeps the business viable has been the overwhelming concern for my members throughout the year, and, with virtually no real help available from Westminster, businesses have been left on their own to fight a lone battle to find skilled workers,” said Alan McNaughton, SAMW president.

“I include the emergency visa arrangements that were put in place in October this year in my criticism. This so-called temporary solution completely missed the point in the first place and hasn’t delivered to any significant degree in the two months since being put in place.

“Member companies desperately need a long-term solution, tailored to address a serious shortage of skilled workers, not a sticking plaster response designed to get us through Christmas and the new year.

“Frankly, it didn’t deliver in the short-term and is unlikely to be any better next year. As such, the early months of 2022 will be dominated by continuing labour supply problems, accompanied by rising costs from all quarters.”

Abattoir costs

“The inevitable consequence of a high demand for labour is that wage rates are rising across all industries, energy bills are increasing sharply, our compliance costs continue to climb, while the price we pay for our raw material is rocketing skywards.

“The cost burden our members endure is rapidly becoming unsustainably high. A market correction is looming which may well mean that an explosion of costs and prices at the retail level will be inevitable at some point in 2022 with processors, wholesalers and retailers being forced to apply cost increases to their end products.

“Official economic forecasts for the UK are already quoting inflation reaching 5% next year and there is no way the production, processing and retailing of red meat can be exempt from such pressures. It could even be argued, in fact, that food inflation in some primary areas is long overdue in the UK.”

In addition to pressing for a visa solution for recruiting EU workers, which is actually capable of meeting the industry’s needs in 2022, SAMW is also seeking greater understanding and support from the government on a number of other issues.

Pig export licence loss

The Scottish pig sector faced major problems last year, the most damaging of which, aside from its own labour pressures, was the loss of export licences to China which has caused huge difficulties up and down the supply chain.

While the UK’s four pigmeat export plants, including Brechin, are now in the process of having their licences reinstated, there are still significant concerns over the ongoing shortage of butchers, which the new visa system is not easing, and the backlog of supplies on-farm which steadily built up during the peak of the sector’s crisis.

Exporting red meat in general to established customers within the EU has been a massive challenge for smaller, niche product businesses over the past year. Some operators have given up on trading opportunities which were previously extremely valuable and easy to manage.

If ministers are serious about boosting our export volumes, then a helping hand to provide a low-cost route to Europe and beyond is urgently required.

Restore BSE negligible risk status

The campaign to restore Scotland’s BSE status to negligible risk (NR) continues to demand attention. The NR status, on which Scotland led the UK, was lost in October 2018 following a single BSE case in northeast Scotland. This has cost member companies around £90m in lost revenue to date and needs to be urgently restored. The association is campaigning for this to happen in 2022.

SAMW is also requesting some financial support from the Scottish government towards extra costs incurred by the mandatory requirement for members to install CCTV cameras in abattoirs, a requirement which cost one medium-sized plant approximately £20,000, to quote just one example.

Writing to the Cabinet Secretary recently, the association drew attention to the fact that while mainstream processing businesses have not been awarded a single penny of support to cover their CCTV costs, grants of up to £5,000 were awarded to island plants.

In addition, SAMW also highlighted that some farmers have been awarded financial support under the Sustainable Agriculture Grant Scheme to install CCTV in their livestock pens. This needs to be rectified and support made available to all parts of the supply chain that are subject to this new statutory requirement.

Cut cost of red tape

Another support imbalance concerns the fact that while red meat processors face full-cost recovery for official controls, as delivered by Food Standards Scotland (FSS), other food sectors, such as fish processing, enjoy the free provision of similar controls.

“Twenty years ago, there were over 30 meat plants operating in Scotland,” said McNaughton.

“Now, we have only 14 plants processing livestock, with many parts of the country being without an abattoir in the local area.

“While there are different reasons for this shrinkage, the constant burden of compliance costs on our members has been a major contributory factor, especially while our competitor industries in the protein supply market continue to be spared from paying any of these charges. This needs to change in 2022.”