The author of this article is Catherine McBride.
This article was first published in ‘Briefings for Brexit’ and we re-publish with their kind permission.
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Many people opposed to the UK leaving the EU will claim that they are concerned about UK lamb farmers and the potential loss of lamb exports to the EU. But lamb farming is the minnow of UK meat production. Of the 3.9 million tonnes of chicken, lamb, pork and beef produced in the UK last year, lamb accounted for only 8%. Yes, the UK did have net exports to the EU of 77,000 tonnes of lamb in 2017 but the UK also had net imports of 1.1 million tonnes of pork, chicken and beef from the EU. The UK’s net pork imports from the EU are more than eight times the UK’s net lamb exports to the EU. It will not be chicken consumers or UK lamb producers who should be worried about the UK leaving the EU, it will be UK pork consumers who are most effected.
But help is at hand, as most shoppers know: if you go to the supermarket and there is no pork or if the lack of EU imported pork has pushed up the price of UK pork, then you can switch to UK lamb which should be plentiful, as the meat that the UK presently sells to the EU will be available for domestic consumption. This is a process called import substitution. And while many people will notice that there is a vast discrepancy between the amount of meat that we import from the EU versus the small amount that we export there, that does not mean that the amount that the UK produces must remain static. UK farmers are not operating at maximum production, meat production from cattle, pigs and poultry have all increased since 2013. And if the returns to farmers are improved with less import competition from the EU, then production is likely to continue to grow to fill the void created if EU imports are reduced. Interestingly only UK sheep meat production has not grown over the last 5 years. Sheep numbers have remained roughly steady as have UK lamb exports to the EU. This would imply that selling sheep meat into the EU is not a growing industry, so why do so many of our illiberal elite claim to be worried about the loss of EU lamb markets?
Alternatively, imports from the EU could be replaced by imports from non-EU sources and luckily non-EU countries include the world’s most efficient meat producers. If UK imports from the EU are disrupted by Brexit, it would be relatively easy for countries outside the EU to make up the difference. And before you panic that UK farmers will be driven out of business by cheaper international producers, according to The Irish Food Board’s website, French and Irish beef are both 8.6% cheaper than UK beef at the moment. But even with this price differential, the UK still supplies 80% of its domestic beef consumption, clearly demonstrating that price is not everything. UK beef is a high-quality product that UK consumers are prepared to pay more for, rather than buy cheaper Irish or French beef. Interestingly, according to the Irish Food Board, US beef is only about 3% cheaper than UK beef, so after including transport costs, it will be unlikely to undercut the local UK product. That won’t be true of Australian beef which is (according to the Irish food board) 21% cheaper than UK beef or Brazilian beef that is 46% cheaper but then, they do have further to travel.
On the subject of Australia, it is worth mentioning that although their entire economy was originally established to provide food and resources for the UK, after the UK joined the EU and abandoned the Commonwealth, Australian farmers were forced to seek other markets for their products or go out of business. At the time the Australian population was about a quarter of the size of the UK’s population and there was only so much beef that the then 13.5m population of Australia could eat. But Australia did find other markets for its beef: Japan, China, Singapore, Malaysia and even the US. Consequently, Australia may not have enough spare beef to inundate the UK market. They could build up their herd size, but this is not going to happen overnight. However, seeking other markets has been very good for the Australian beef industry, as it will be for UK lamb producers if they chose to produce a quality product and market it effectively.
The world eats lamb: Africans, Asians, Indians, Arabians and even Americans. The US has a population of 330 million people but only produces 343,000 tonnes of lamb. That is less than a quarter of the per capita amount that the UK produces. UK farmers should consider doing a lamb for pork swap with the US. If the UK lamb farmers can’t find a market for their excess product, whether to UK domestic consumers or new export markets to the US, or the Middle East, or India, then maybe they deserve to go out of business.
The government should not be protecting UK food production from import competition. To do so would be harmful to UK consumers if the same quality products can be supplied from elsewhere for less. UK farmers must be prepared to improve their efficiency, search for new markets or for new sources of revenue. Farming is after all, private enterprise.