Half of British farmers bankrupt due to Brexit?

More than 50% of British farmers will go bankrupt in a no-deal Brexit. Sean Rickard, former chief economist of the National Farmers Union (NFU). The British Department of Agriculture responds in the negative.

Rickard argues that these bankruptcies are caused by a combination of the loss of export markets, the loss of support from the European Common Agricultural Policy (CAP) and various trade barriers. He reported this after the launch of a new anti-Brexit campaign in Farmer's Guardian† According to him, the agricultural sector of the sectors will be most affected by Brexit.

According to the economist, 60% of farmers' income in England and Wales comes from CAP subsidies. For that reason alone, Brexit would be a huge blow to agricultural entrepreneurs. Although he expects the land prices reacting quickly is not enough to absorb this blow.

Support doesn't help
The promised £6bn (€6,5bn) aid to agriculture will not save farmers either. Rickard argues that there are also other problems, such as the fall in the value of the pound. This will lead to a sharp increase in the costs of inputs, such as medicines for animals and crop protection.

Rickard cites sheep farming as an example. 96% of British exports go to the European Union. In a no-deal Brexit, it could take up to 6 months before imports of British food into the European Union are approved. This creates a trade embargo, which floods the mutton market.  

Defra supports farmers
However, Defra, the UK agriculture ministry, says the ministry has been clear that the CAP is being replaced by a fair system. It also reports that new trade deals are in the pipeline that will benefit British farmers. Even in the case of the no-deal Brexit, the subsidies will be reimbursed until 2022.

Anne-Jan Doorn

Anne Jan Doorn is an arable expert at Boerenbusiness. He writes about the various arable farming markets and also focuses on the land and energy market.

aj.doorn@boerenbusiness. Nl

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