Leave – what will it mean for the agricultural industry?

Fri 8 July 2016

The monumental decision on 23rd June to exit the European Union is likely to have significant repercussions for the agricultural industry in the UK. In the short term, things might be fine because a weaker pound means our exports will be more valuable and the imports more expensive. This could see livestock prices improve, although the implications on the goods we bring in from abroad is that they will be more expensive to buy.

There will be many articles written about this subject over the next weeks and months, but it is only Article 50 that is important – when a decision is made by the new Prime Minister to begin the fixed two year period when we are due to withdraw. Longer term, it will mean the return of many of the decisions made in Europe to London and Cardiff and the administration of the Basic Payment Scheme (or whatever the new scheme will be called, if there is one) from these two centres. There is no doubt that British farmers do not have the political clout that the French or Germans do and so it seems very likely that support payments will be drastically reduced from 2019. The key to counter this will be to get a better price for our products by opening up new export markets, if possible, and finding someone who can provide genuine competition to our big retailers, who are very adept at pushing the prices down.

Economically there is likely to be a two to three year period of uncertainty whilst the City of London comes to terms with the changes and it is hoped that this will not impact too negatively on the banks who, love them or hate them, are the providers of the funds that lubricate the agricultural property market. It has always been hard to predict what future profits will be, in projected cash flows for borrowing, perhaps now more so than ever.

The engine room of the property market generally, is the south east and any uncertainty there always has a ‘knock-on’ effect on this area. There is likely to be hesitation in the house market for some time, yet the drift away from our slimy, grimy cities will continue and we live in a beautiful part of the world where people will still want to come and live. With the improvement to Broadband in rural areas, we will see the trend of more people working from home, whilst enjoying rural life, continue and that will help to underpin house prices.

So what the future holds is uncertain and we have taken a leap in the dark, without any guarantee that the parachute will open. The argument has certainly polarised the opinion on both sides, with friends and families voting differently, amid argument and counter-argument. There has not been much to smile about, but one local lad saw fun in defacing an unsolicited ‘Vote Leave’ poster at the end of his road, as the picture below shows.