As we edge closer still to the 2019 deadline, even considering a possible two-year transitional period, those worries are increasing as the UK government still has not reached a deal with European counterparts.
Now we know exactly what the UK government’s no-deal advice is as the first batch of technical notices have been published, more concerns are being raised as food sectors, industry representatives and policy experts digest the finer details each notice has revealed.
Brexit secretary, Dominic Raab, has promised there will be no shortages of particular food and ingredients even if the UK crashes out of the EU, but there is plenty of debate over how food and trade-related bodies and organizations will be certified, how UK businesses may be less competitive and what they need to know if a no-deal Brexit comes to pass.
On top of that, there is the issue of EU nationals working in specific sectors like farming and agriculture as it remains unclear precisely how they will be affected. Seasonal workers from EU countries have historically plugged the gap in the fruit picking workforce across Britain for decades as natives have tended to shun this work and EU nationals have been temporarily hired each season during peak harvesting periods.
Extra paperwork, increased costs and workforce shortages are worries that producers and suppliers have been debating for some time while warning of the dire consequences that a no-deal would bring – and, now there are other points to think about.
The list advises industries about the manner in which they are regulated in the event of a no-deal Brexit.
Producing and processing organic food if there's no Brexit deal
One of the major new focus points to come out of the Government publishing these technical notices is how Brexit will impact the trade of organics.
UK organic exporters could face a ban on their EU exports for at least nine months after a no-deal Brexit while new approvals for certification are sought. Not only does this include all organic food but also any UK food that currently displays EU marks or any kind of logos.
Six UK-based and two Ireland-based organic control bodies are currently approved by the Department of Environment, Food and Rural Affairs (Defra) to license individual organic operators. The control bodies oversee organic production and offer advice to ensure the integrity of organic products placed on the market.
But, UK businesses would only be able to export to the EU if they were certified by an organic control body recognized and approved by the EU to operate in the UK. To do this, UK organic control bodies will need to apply to the European Commission for recognition.
And crucially, UK control bodies are not permitted to make these applications until the UK becomes a ‘“third country.” Approval can take up to nine months.
The UK government says it’s exploring alternative approaches that should speed up this process and as the UK is retaining EU regulation in UK law, it expects to negotiate an equivalency arrangement with the EU which will allow the free movement of organic goods.
The government will ask the European Commission to discuss these applications in advance of March 29, 2019, but this has led to major concern from organic producers in the UK.
Clarity or confusion?
The Soil Association has said outright that “Brexit technical notices offer no further clarity to food and farming businesses.”
“The information outlined raises concerns that imports and exports to and from the EU may be held up for months. The critical issue of continuing recognition by the EU of the organic status of products certified in the UK is left entirely unresolved by this paper and a similar document that was issued by the EU some months ago,” says Chris Atkinson, Soil Association Head of Standards.
“We are also concerned that a new UK-owned imports traceability system to replace the current EU system would need to be in place by March 29, 2019. In our view, this is an unrealistic goal within the time frame. Delays could significantly hinder trade.”
Atkinson is referring to the EU Trade Control and Expert System that tracks the entire trade and certification process for animals, food, feed and plants, known as TRACES.
TRACES is the European Commission's multilingual online management tool for all sanitary requirements on intra-EU trade and importation of animals, semen and embryo, food, feed and plants, explains the EU.
Its main objective is to digitize the entire certification process and linked procedures and is in line with the declaration of the Digital Agenda for Europe. Around 30,000 users from more than 80 countries are interconnected through TRACES, centralizing all data, simplifying and accelerating the trading process.
According to the EU, TRACES facilitates the exchange of information between all involved trading parties and control authorities and speeds up the administrative procedures. It has the possibility to trace back and forth all the movements of animals, semen and embryo, food, feed and plants contribute to the reduction of the impact of disease outbreaks and bring a quick response to any sanitary alert, for the better protection of consumers, livestock and plants.
“Frictionless trade with the EU is critically important for the food and farming sector. It’s vitally important the UK remains in the customs union and stays aligned with EU standards on food and environment as a minimum,” continues Atkinson.
“A no-deal Brexit is the worst possible scenario. The technical notices published offer no further clarity to businesses and provide neither reassurance nor advice on how to prepare for a potential ‘no deal’ scenario. They confirm the scale of the challenge we face and the vital importance that the UK achieves a workable deal with the EU.”
“The EU is the UK’s closest, largest and most important trading partner, therefore ensuring effective trade with the EU should be the immediate priority over trade deals with other countries. Such deals pose potential risks, particularly to UK food and farming, partly due to the risks of allowing food of lower production standards to enter the UK. Irrespective of what form Brexit eventually takes, there is serious concern that UK farming will also lose the ring-fenced budget for farm payments that all other EU countries will continue to enjoy.”
Farm payments: Brexit’s impact on the agricultural industry
Another of the UK government technical notices relates to “how farmers who receive payments under the Common Agricultural Policy (CAP) would be affected if the UK leaves the EU with ‘no deal’?”
As the UK will have the freedom to design its own agricultural policy once it has left the EU, the nature of support for the agricultural sector will change. The Agriculture Bill will legislate for those changes in England, says the technical notice, and the future of agricultural policy has been the subject of a public consultation in each country of the UK. “The devolved administrations and UK government are working together to determine where UK frameworks need to be established,” it says.
Currently, financial support for the agricultural sector comes from the UK’s participation in CAP which makes EU funds available to reimburse, fully or in part, the support payments the UK Government makes to the sector. The UK is currently a net contributor to the EU budget and all EU funding is derived from funding by UK taxpayers.
But after March 29, 2019, if the UK leaves with no-deal, eligible beneficiaries will continue to receive payments under the terms of the UK government’s funding guarantee.
The Department for Environment, Food & Rural Affairs (Defra) and the devolved administrations are preparing domestic legislation (under the Withdrawal Act) to ensure they have the ability in law to continue operation of payments in a “no deal” scenario. This legislation preserves the EU law as it currently stands and “fixes” the legislation so that it is operable once the UK has left the EU.
“The domestic legislation will require beneficiaries to conform to the same standards as they do currently, in order to receive payments. This will include on-site inspections to UK farms receiving payments, which will continue as normal,” says the notice.
“All of these rules and processes will remain the same until Defra and the devolved administrations introduce new agriculture policies, either through the Agriculture Bill due to be introduced in the UK Parliament, or an Agriculture Bill in one or more of the devolved parliaments.”
The government has pledged to continue to commit the same cash total in funds for farm support until the end of this parliament, expected in 2022: this includes all funding provided for farm support under both Pillar 1 and Pillar 2 of the current CAP. This commitment applies to the whole UK.
However, the National Farmers’ Union of England and Wales (NFU), has responded to the publication of the technical notices by reiterating the importance of free and frictionless trade with the EU and called for clarity on the trade of all agri-food products in the event of a no-deal Brexit.
NFU President Minette Batters warned that this cliff-edge scenario if applied across the wider UK food supply chain, would be disastrous for farm businesses, the economy and society at large.
“While these notices are an essential part of government’s plans for preparing for all outcomes, they serve as a sobering reminder of what is at stake for farmers in the event of a no deal,” she says.
“The technical notice for organic farming is a warning for us on the future of trade of all agri-food products - if all these products were subjected to the same problems in approvals and certification then this could result in effectively a trade embargo on exports to the EU. Not only would this be hugely disruptive but it threatens livelihoods and businesses in the UK.”
“The absolute priority for the NFU continues to be that we maintain free and frictionless trade with the EU. Sixty percent of UK food, feed and drink exports were to EU countries and 70 percent of our imports in these products were from the EU. This trading relationship is worth £45.5bn (US$58.5 bn).”
“We look to government to clarify the vital issue of trading with the EU for the farming sector in the remaining technical notices due to be released. While we believe that a deal is the most likely outcome to the ongoing negotiations between the EU and UK, we urge both sides to find pragmatic solutions to the issues still outstanding between them. A no-deal outcome would be the worst possible one for the farming industry.”
The NFU says its policy experts are examining the notices already published in order to provide specific analysis on what they mean for farming and for our members.
The UK government say to expect more technical notices to be published in September.
Other reaction from industry
The UK food and drink industry need help to “turbocharge” the sector’s exports and restore productivity levels to avoid falling behind other European countries once Britain has left the EU. That was the official message coming from the Food and Drink Federation (FDF) in July when it published an industry-wide report highlighting the key growth opportunities for the food and drink industry.
The FDF said the report comes as the industry faces “unparalleled” challenges in the coming years as the market environment remains uncertain, largely as a result of Brexit. The FDF realizes there are huge opportunities for the British food and drink sector, but the key is to identify and harness the industry’s growth potential and improve productivity.
Now, the FDF says that publishing the set of “no-deal” Technical Notices is a “laudable decision” but adds they confirm what “a grisly prospect” for UK food and drink a no-deal exit from the EU would be.
“There is no sign of further progress on negotiating frameworks with the devolved administrations. There is no substantive information on mitigating the effect of ‘no deal’ on the island of Ireland, where the implications would be most significant,” says chief executive, Ian Wright.
“Specifically for food, today's notice about organic food certification makes clear that UK organic exporters may face a ban on their exports to the EU for at least nine months after a no-deal exit, while new approvals for certification are sought. These issues apply far more widely than just organic food – any UK food that currently displays EU marks or logos will be in the same boat.”
Wright also casts doubt on the UK Government ability to replace TRACES in time for the end of March and claims “the new burdens potentially facing food and drink exporters and importers set out will frighten many SME food businesses.”
“The piecemeal release of these notices indicates that many are not yet ready and agreed for publication. That hardly inspires confidence. As the consequences of a no-deal exit from the EU become ever clearer it is vital that to protect the interests of shoppers and consumers, the Government must deliver a deal with the EU.”
The British Retail Consortium has a similar response with Helen Dickinson, Chief Executive, emphasizing that securing a deal is essential for UK consumers and the importance of avoiding a cliff-edge scenario.
“Businesses can only plan based on the facts and securing a deal with the EU is essential to provide certainty and to protect UK consumers. Our food supply chain, in particular, is fragile and based on just in time principles, ensuring efficiency and economies of scale, bringing huge benefits to the British shopper,” she says.
“Any delays caused by increased red tape will have a serious impact on over one-third of our food imports. The Government's technical notices demonstrate the facts of a No-Deal Brexit – reduced availability and higher prices of food and medicine, increased delays and red tape at borders and a VAT bombshell for consumers and businesses.”
“EU and UK negotiating teams must deliver a Withdrawal Agreement in the coming weeks to avoid the severe consequences that would result from a cliff edge scenario next March.”
Source:www.foodingredientsfirst.com
