Farming businesses 'could be wiped out after Brexit transition'

Food prices could rise sharply and farming businesses could be wiped out at the end of a Brexit transition period, a House of Commons committee has warned.

The cross-party environment, food and rural affairs select committee said the timetable for concluding a new free trade deal with the EU by the end of 2020 was “extremely ambitious”.

In its latest report, the committee says the government must have contingency plans to protect consumers and business from the immediate impact of tariffs, which range from about 87% on frozen beef to about 42% on cheddar cheese and 50% on grated cheese.

“Although the government’s intention is to agree a comprehensive free trade agreement and customs agreement with the EU, there is no guarantee this will occur,” the committee said.

It called on the government to consider establishing a special fund to support agriculture, which is facing some the highest tariffs in WTO’s rules in addition to the loss of EU subsidies. It also warned that customs checks could mean rotting food with perishable goods imported from the EU unable to reach their destination on time if there were delays.

Part of the problems centre on the UK’s lack of self-sufficiency in food – it does not produce enough for its own population and relies on imports to satisfy consumer needs.

The committee concluded that dairy, sheep and cereals would be hit hardest by tariffs on the export front.

Consumer prices for meat and dairy were particularly vulnerable to price rises.

The British Retail Consortium told the committee that having applied the tariffs to four typical products in supermarkets, beef and cheese could increase by 30%, tomatoes by 18% and broccoli by 10%.

The average tariff on dairy is more than 30% – imported cheddar would go up 42% and butter 49% but would be as high as 87% for frozen beef products.

By contrast, the Brexit-campaigner Tim Martin, the founder and chairman of Wetherspoon pubs, said the cost of its meals would decrease by 3.5p and the cost of a pint by 0.5p if World Trade Organization rules applied.

Sheep farmers could be “devastated”, with farmers in Wales and Northern Ireland who export about 90% of their lamb products unlikely to survive a 50% tariff.

The committee called on the government to publish the agriculture bill as quickly as possibly, expressing surprise that the Department for Environment, Food and Rural Affairs had not already completed its sector-by-sector analysis.

It also warned that it would hold the government to account over promises made by the environment secretary, Michael Gove, to uphold existing standards on food and animal welfare.

“Whilst we recognise the huge benefit that trade agreements could bring, these must not be to the detriment of the UK’s reputation for high animal welfare, environmental and food standards,” it said.

A spokesperson for the Department for Environment, Food and Rural Affairs said: “Leaving the EU gives us a golden opportunity to secure ambitious free trade deals while supporting our farmers and producers to grow and sell more great British food. Any future deal must work for UK farmers, businesses and consumers, and we will not compromise on our high environmental or welfare standards.”