Are you ready for Brexit?
It might feel as if it’s been going on forever but Brexit will finally come to a head at the very end of 2020. There have been several false starts and unbelievably, at the time of writing, there is still uncertainty as ever about whether there will be a deal between the UK and the EU. Below, we will set out some of the technical issues and changes which farmers may have to deal with in respect of the changes. It’s important to note that even if a deal is reached, there will be significant changes and added bureaucracy to trading with the EU.
Much of the technical challenges will fall upon those directly exporting products from the UK. This is rarely farmers themselves, but there are some important steps which farmers can take to prepare their businesses for life after leaving the EU.
The general advice is to consider your business’s exposure to the EU market, given that we will be outside the single market. Below are some of the issues you should think about:
How much of your sales are either directly to the EU or are of products which have significant exposure to the EU? What do you know of the way your buyers or abattoirs sell your livestock? You could think about reducing your exposure to customers who may have significant exposure to the issues which will arise with the EU.
Some farmers may export (or import) live animals to the EU. You should make enquiries with any agents to hauliers you use for this work to assess the impact the changes will have and to what extent steps have been taken to mitigate the effects.
It has come as some relief that temporary arrangements have been agreed for goods passing between Britain and Northern Ireland. Supermarkets and certain trusted traders will not be required to provide paperwork for goods until 1st April. There is also a 6 month period where goods such as chilled meat may pass without usual trade restrictions. These are temporary measures which the UK and the EU will have to resolve if there is to be a permanent solution.
Farmers should think about the things they buy and where they come from? Feed, fertilisers, medicines, chemicals, plant and machinery – many of these may originate form or be influenced by issues in the EU.
Will any delays in receiving these inputs affect your business and could you make contingency arrangements now? Speak to your suppliers to understand what they expect to happen with regard to delays or increases in prices. Find out about alternatives and assess your options.
Strategies to Manage Risk
There are some good strategies which would be useful at any time but they are particularly relevant for the upcoming months.
Check where your buyer intends to sell the produce on to. If it is a market which could be heavily affected by Brexit arrangements, consider whether there is an alternative as it may mean difficulties or delays in receiving payment.
Wherever possible, ask for payment on delivery of your products.
Spread the risk by selling to several different buyers. This will reduce your exposure to any particular business, should it experience financial difficulties or insolvency.
If you require any further advice or assistance in relation to Brexit or any other issues affecting your business, please contact us on 01558 650381.