Thread by @eurorealist

Farmers face the biggest Brexit hit and still they don’t think they need to worry! THREAD
In a grim report published on Friday, the #government Agricultural, Horticultural and Development Board @TheAHDB predicted that post-Brexit #farming incomes would fall by 25%. @FarmingUK /1

This wasn’t just in an apocalyptic #NoDeal scenario. If it was, farmers seeing this figure could mutter Project Fear and carry on their arduous work. The problem is that this collapse occurs IN ANY BREXIT SCENARIO @bbcfarmingtoday. /2

It is no exaggeration that entire enterprises, for example poultry production, could be unviable if the AHDB predictions are correct as @RCorbettMEP notes. This is a problem because, in Shropshire @BBCShropshire poultry accounts for 86% of all cattle and livestock. /3

Sheep is 10% and cattle, 3%. Shropshire has the second highest amount of sheep than any other local authority in England, the second greatest amount of cattle and the third greatest number of chickens. /4

Farmers face higher labour costs, roller-coasting prices and slashed profits. Even if Theresa may’s benighted #SoftBrexit Withdrawal Agreement gets itself over the Parliamentary line before the Halloween cliff-edge date, there are no sunlit uplands for British #agriculture. /5

Why is this?
Three reasons....../6

1.Domestic agriculture policy: In sectors where direct financial support accounts for a significant proportion of farm business income, the AHDB report shows the dramatic immediate impact of reduced support levels on business profitability. /7

2.#Trade policy: The UK is a net importer of products for most food sectors, and the EU is a key trading partner. In areas such as dairy and pigs, the scenarios show that farmers may just about benefit from rising prices, reflecting the rising costs of trade. /8

In sectors where exports are significant, such as cereals and sheep meat, rising costs of trade for UK products into EU markets will mean downward pressure on domestic farm-gate prices. /9

3.#Immigration policy: Higher labour costs, resulting from restrictions on migrant workers, will reduce farm business incomes. /10

So to understand the general impact on farmers, first we need to know in which agricultural sectors the #UK is a net produce importer or exporter. Where the UK is a net importer, farmers tend to gain from rising prices. However..... /11

as fixed and variable costs for #fertiliser, feed and labour are predicted to rise whilst EU subsidies vanish, being an importer would still reduce overall income in a “deal” scenario. /12

But, in a #hardbrexit scenario the dumping of cheaper global livestock produce on the UK market could lead to a collapse in farm-gate prices under a no deal outcome. Why? /13

Because under the World Trade Organisation tariff regime there is a 0% tariff on the first 230,000 tonnes of livestock produce meaning a fall in average farm profits from around £42,750 a year to £26,285 in 2022. /14

The @TheAHDB says that sheep farmer’s income - even if #softbrexit is done with the EU – will plunge from the current average of £25k per annum into a marginal annual loss. In a no deal scenario, sheep farmers would face a business-busting loss of on average £10k each year. /15

Income for #beef and sheep falls to £15K with a deal but to £9K in no deal.
Income for #pig farms drops under a deal to £21K. The average farm loses £10K a year under no deal.
•Incomes fall for the #poultry farms under a deal to -£32.60 per 1,000 birds @Jonathan__Leake /16

BUT all these falls are a drop in the ocean if the CAP basic income support is removed. Expect an income collapse of 50% on top not least because @DefraGovUK have already stated that direct payments will be focused on agri-environment management in 2020 instead of production /17

What farmers need to understand is that the @AHDB sees no positive outcome on already stretched incomes from any kind of Brexit. It says in its conclusion that change is coming. The question is only how fast it will come. /18

In the event of a deal, farmers’ first priority is to deal with the removal of direct payments. If there is no deal with the EU, accelerated restructuring of farming sectors seems inevitable. The only farms which may weather the oncoming storm are the large, top performers /19

@Farmers4EU need to protect their incomes! To do that they need to ensure that their supply contracts, regulatory compliance, employment practices and subsidy regime are in order to avoid the shock that will come from Brexit – with or without a deal. @FBCManbyBowdler ENDS

#Brexit works in mysterious ways for everyone. Time to wake up.