News
23rd Nov

2018

Contingency Planning for the Sheep Sector in a No Deal Brexit Scenario

In our latest blog post, Devon TFA member Mike Dart sets out a contingency plan for the sheep sector in the event of no deal in the UK’s Brexit negotiations with the EU. 

In a hard Brexit scenario there is every possibility that lamb exports from the UK to Europe will be hit.  The last time that lamb exports to the Continent were denied to us was in 2001 during the Foot and Mouth (FMD) epidemic causing prices to crash by around 60%. This is because roughly 35% of our lamb is exported and of this 95% goes to the Continent, quite a success story of marketing really.  This crash in price happened with millions of sheep not even reaching market as these were destroyed as part of the FMD control policy or through the Livestock Welfare Disposal Scheme.  So, the price crashed despite all these sheep not reaching market. The sheep industry next year could be heading for a perfect storm of no EU exports and the UK breeding flock at near record numbers producing, in turn, record numbers of lambs.  If this is the case, what contingencies should we be considering in the event of a no deal Brexit?

One response could be a Government sponsored private intervention scheme where lamb would be bought off the market at a set price to help support the market.  Whether there would be sufficient cold storage available is a moot point given the size of the intervention that would be required.  However, this stored product would have to hit the market at some stage and its existence would overhang the market depressing prices in the meantime.

Another possible option would be direct support to the lamb producer. This could be achieved with the use of the DEFRA Annual Inventory of Sheep that has to be completed each year on the 01 December.  A direct payment per breeding ewe could be made to sheep producers in the event of a price collapse instead of paying for Intervention.  This would have several advantages including ensuring that support gets directly to those who need it.  Neither would there be any carry-over of stock to further depress prices.  The administration would be straightforward and should not be open to abuse or manipulation.

As we read of contingency measures being put in place for other industries in the event of a no deal, surely we should be looking at putting in place appropriate measures for the sheep sector which is likely to be the most badly affected farm sector in those circumstances.

Mike Dart, Devon TFA member

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