Friday, June 23, 2017

Challenges for grains post-Brexit

The AHFB has produced a comprehensive report on the challenges facing the grain sector post-Brexit: Grain challenges

The report emphasises that the global grain trade is driven by competitiveness. It is a high volume, low margin business, dominated by relatively few multinationals. The UK is a small player in a big market. In the past four seasons the UK exported 11 per cent of its wheat and 17 per cent of its barley crop. Competition for barley export business is likely to get tougher in future. There is no doubt that the UK faces tough competition from lower cost producers with higher outputs.

Any change in trade and support arrangements is likely to lead to structural changes on farm. Further farm consolidation could follow to achieve economies of scale.

The loss of preferential treatment in relation to the EU market is likely to mean loss of access agreements with non-EU countries such as Morocco and Algeria in the absence of new access arrangements and probably tariffs.

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