UK agrisupply businesses looking outside the UK due to Brexit uncertainties

With so much uncertainty surrounding what Brexit means, UK agribusinesses are already moving operations out of Britain and others are taking irreversible decisions on business location and investment, a workshop organised in London by the Agri-Brexit Coalition heard recently.

Speakers were drawn from across the sectors represented by the Coalition members including machinery, animal health, crop protection, fertiliser, seed breeding and grain and feed trading. For some, plans to expand from a UK base into the EU27 had been put on hold; others were looking or had taken decisions to create operational hubs for manufacturing and/or logistics inside the EU-27. Such moves would simplify operations for components or finished goods.

Despite the diversity of speakers, ranging from established UK family firms to multi-national animal health and crop protection companies, the plea was the same for certainty on issues of trade and regulation.

Many of the sectors have complex supply chains, for instance vegetable seed can cross national boundaries several times as a variety is developed and then multiplied up for sale. Customs delays and tariffs would undermine this sector. However, the biggest headache would be the need for thousands of phytosanitary certificates which at present are not required in the single market.

In crop protection, a move from a hazard to risk-based approach would be welcome. However, for growers looking to export produce to the EU, the European approvals system would likely take priority. Both crop protection and animal health businesses highlighted the complexity of product labelling that Brexit may bring and the extra investment needed is unlikely to be justified for niche crops or health issues.

Talk of liberal trade regimes is a double-edged sword for some businesses. Whilst it may open up other markets, it would also expose the UK to the potential of product dumping – putting both UK standards and business at risk. To lobby against unfair trade a Manufacturing Trade Remedies Alliance has been formed which includes UK-based fertiliser industries.

Regardless of the goods or services supplied, the whole agrisupply industry depends on a sustainable UK agriculture. The uncertainty of how farming fortunes may fare adds to the overall uncertainty. The potential for improved traceability and quality produce undoubtedly exists, but policy makers need to be careful of unintended consequences as they devise legislation going forward.

“Time and again speakers spoke of the frustrations at the lack of clarity on government’s plans. As Brexit rapidly approaches, the agribusiness and agrisupply industries need guidance on the future trading environment they will face,” said Ruth Bailey, Chief Executive of the Agricultural Engineers Association who organised the event on behalf of the Agri-Brexit Coalition.

“Despite all the challenges, there is still plenty of optimism amongst the supply industries. Everyone will still be in business on day zero and well-beyond. There are opportunities, which agribusiness is keen to grasp with innovative products, technology and services.

“We hope that the workshop was a wake-up call for the government officials who attended and gave them an insight into the complexity of issues that businesses need resolving.”

The Agricultural Engineers Association is a trade association representing manufacturers and importers of agricultural machinery and outdoor equipment (horticulture, professional and leisure grass care, and forestry).