UK agriculture: green opportunities could tackle the challenges
30 September 2020: The agriculture sector could face issues post-Brexit transition period, but by focusing on quality, sustainability and technology, it could build a new place on the world stage.
UK agriculture is going through its most exciting period since 1947, according to Jonathan Thompson, a solicitor in the Rural Land and Business Department of Hunters Law. Not all of that excitement is positive, but the sector is not without its opportunities. Either way, it will be game-changing.
“We are faced with various bills going through Parliament, such as the Agriculture Bill and the Environment bill,” he explains. “There's going to be a multitude of statutory legislation coming out of it in relation to how agriculture works; it's enabling a completely new structure. So yes, there are challenges and there's a lot of pessimism around in certain parts of the industry. But even then, you've got to look at the positives. You've got to learn to dance in the rain.”
These measures could play a part in the sector’s recovery after a tough few months. While it may seem slightly removed, they may also help boost UK agriculture when it comes to international trade.
The Brexit conundrum
Agricultural imports and exports are at risk in the event of a no-deal Brexit. The UK agriculture sector has two big questions to answer in the months leading up to and after the end of the Brexit transition period: how do we maintain our export market? And how do we fill the gap in supplies with homegrown produce?
The latter issue could certainly provide domestic opportunities for farmers, with the right investment, says Mark Suthern, National Head of Agriculture, Barclays. “There's a massive opportunity for UK farmers to broaden what they grow and the livestock they produce to supply some of those imports. I'll give you a quick example: 82% of all tomatoes that we consume in the UK are imported. We all know that under the right conditions, farmers can grow tomatoes in the UK.”
On the exports side, the UK’s reputation as a producer of quality goods is a strong foundation on which to build new trading relationships across the globe. “Products marked with the Union Jack, the Saltire, the flag of St David etc are always popular abroad,” says Suthern. “We need to work out how we can capitalise upon that. For those farmers in mainstream production, their route to market is through processes and value. The responsibility really lies further up the supply chain, but it's absolutely key that we market the quality and provenance of British produce.”
Thompson agrees: “It comes down to quality and brand. That is what people are going to have to trade off, particularly in a no-deal situation. Because sectors of the market they currently get are not going to be there. And a vast amount of trade currently goes into Europe.”
The threats
Brexit is a potential source of problems, depending on the ultimate outcome of trade negotiations in the next few weeks, Thompson explains. No-deal, in particular, could pose a challenge as we revert to WTO tariffs. “It's an admin and a pricing issue. It comes down to the price at which you can profitably trade. Potentially, you have a no-deal and WTO tariffs, there's going to be problems for both imports and exports in terms of having a competitive basis for farmers and food and drink producers.”
Larger agribusinesses may have the volumes to be able to weather this. For smaller producers, however, margins can be very low. Add to this the trading complications introduced by COVID-19 and those low-margin businesses could struggle to maintain export sales post-transition period.
With quality being such a selling point for UK agriculture, some organisations are concerned about the lack of announcements or legislation around food standards. The assumption is that this is due to the potential trade deal with the US, where food standards will have to drop to allow the import of certain products. The UK industry will have to work harder to promote its quality as a result.
For some areas of agriculture, there’s a potential staffing issue. The drive to encourage furloughed and unemployed Britons to pick fruit during the lockdown turned out to be a damp squib. While fear of the virus may have played a part in this, the perceived wisdom is that UK workers don’t want these jobs. There is a concern that fruit and vegetable producers will struggle to resource themselves properly.
The UK government has set up the Trade and Agriculture Commission, chaired by former Food Standards Agency Tim Smith, to advise on trade policies the government should adopt to secure trading opportunities for the sector. All regions of the National Farmers’ Union (NFU) are represented, as are the British Retail Consortium, UK Hospitality, the Ulster Farmers’ Union and the Food and Drink Foundation.
“This Commission will bring a clear-eyed perspective on what is fair and works for consumers, farmers, food producers and animals,” said Smith at its launch. “I am delighted to chair it and look forward to independently advising the Government on how trade policy can both protect and advance the interests of British farming and the UK as a whole.”
Animal welfare and a green recovery
One of the Trade and Agriculture Commission’s remits will be to promote animal welfare globally. This feeds into the ‘British means quality’ message that will be the basis of UK agriculture trade in the future.
The sector already has a good reputation for its animal welfare. Both Suthern and Thompson agree that the sector should look to build on this further and build it into a wider narrative around the sector’s environmental credentials. Suthern encourages farmers and agribusinesses to start investing more in sustainability to capitalise on the growing demand for sustainable products. “The main driver of agriculture globally over the next few years is going to be the Green Revolution, a focus on carbon and targets. So we must be really mindful of those and how they affect and shape agriculture.”
The Agriculture Bill, introduced to the House of Commons on 16 January, aims to replace the Common Agriculture Policy. Funds under the new Bill will be allocated to farms that increase their efficiency and improve the environment. Thompson explains that this funding will be tiered, with tier one funds allocated to farms that accommodate their land use to benefit the environment, and tier two and three funds awarded to farms that work with adjoining landowners to provide a greater environmental benefit to the region.
“Also going through parliament at the moment is the Environment Bill, which isn't really considered much at the moment, but I think is extremely important,” says Thompson. “The Agriculture Bill and Environment Bill have to be considered together in terms of the future of farming because it all comes down to that issue of environmental management and land management.”
Agritech and efficiency
With the UK’s fairly temperate climate, the volume of food supplies could prove to be a significant advantage as climate-related issues impact other nations, says Suthern. To ensure it can take advantage, the sector needs to look at improving its efficiency and productivity. This will also help with growing crops that are traditionally imported – such as the aforementioned tomatoes – using controlled environment farming and other agritech solutions.
“The uptake of agritech is absolutely key,” he says. “Farmers should be aware of what technology that is available to them. We are in an industrial revolution, and the use of data, AI and robotics can make a difference to productivity, efficiency, sustainability and profitability.”
Suthern cites examples such as the use of drone technology in managing combinable crops and using multiple sources of data to take a ‘precision agriculture’ approach, using the exact amount of fertiliser, chemicals and energy to get the optimum output of your crops.
The UK dairy sector is using robotics particularly well, says Suthern, which is improving productivity, profitability and animal health. It also improves the wellbeing of farmers.
“I went to see a third-generation Welsh dairy farmer who had invested in robots. He said that his father had never seen the second half of a Six Nations rugby match and told me his investment will allow him to lead a more normal life. That's how I see the use of technology, with machines working alongside people to improve the life of the farmer. I think we'll see an improving skillset, bringing new people who want to work in the sector.”