According to the UK Government, the barley and sheep sectors are the most vulnerable agricultural markets when it comes to the impacts of a no-deal Brexit – because these sectors export so much to the EU. the FUW has consistently lobbied for financial support for all industries adversely affected by Brexit, including the Welsh sheep industry.
Over a third of sheep meat produced in Wales is exported annually and of this, more than 90% is exported to the EU. hybu Cig Cymru – Meat Promotion Wales believes that changes to the red meat industry are inevitable whatever the outcome and estimates that the additional bureaucracy and export requirements of lamb going to the EU from January 1 will increase costs by 4-8%, even under a free trade agreement scenario. If we have a no-deal, tariffs averaging around 50% of product value would apply on top of that, which is likely to halve the value of exports given that importers are unlikely to be willing to pay the tariffs at current market value.
If negotiations on support for the sheep sector prior to Brexit deadlines are anything to go by, one or other, or a combination of two systems of compensation are likely to be considered: a headage payment based on the previous year’s annual inventory or a slaughter premium on lambs.
the FUW has highlighted that whatever is agreed, the support must be sufficient to make up for all losses and reach all lamb producers across the UK.
the UK Government is leading a Four Nations approach to contingency planning for the sheep sector, however no decisions have been made as of yet – and again, I hope by the time you read this we will have a deal and will not need to talk about emergency support.
Mae Adran Bolisi FUW yn dymuno Blwyddyn Newydd dda i chi.
Wishing you a very happy New Year from the FUW Policy Department.
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