UK farmers were in favour of Brexit

The United Kingdom (UK) voted on Friday to withdraw from the European Union (EU), sending the pound and the rand diving, and David Cameron, former UK Prime Minister, running.

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Philip Clarke, the executive editor: news and business of Farmers Weekly UK and I had an interesting conversation about the implications of Brexit (a popular term for British withdrawal from the EU) for farmers in the UK and South Africa.

The South African press (and rand) has reacted with surprise and disbelief to the outcome of the Brexit vote. Was the British media surprised at all by the result?

The result is a bit of a shock, just because the consequences are so enormous. Also, one day before the vote the polls suggested 52%:48% the other way round. But it was always going to be close, and the fact that there was a 72% voter turnout adds credibility to the verdict.

Prior to the vote, what was the general sentiment in the UK farming sector towards the UK’s exit from the EU?
The farming vote is pretty tiny in the UK – about 1% – but our own polls had indicated a strong preference to leave. A Farmers Weekly poll in April had it 58% leave, 31% remain, and other polls were very similar. This seemed perverse, given that so many farmers depend on the EU as a market, and on EU subsidies, which account for most of their profit. But farmers are also fed up with EU red tape, and they are a pretty conservative lot generally, with concerns about sovereignty and immigration.

What will be the major implications of the UK’s exit from the EU for the UK farming sector?
The big two are access to markets and levels of support. The UK is still a big economic player, with mutual dependence on trade, so in time, satisfactory deals should be possible (though it will take a long time). In terms of support, there’s little doubt that subsidies will be whittled away, as other demands from society are greater, and a danger that UK farmers will be left to compete with our EU neighbours, who will receive much higher subsidies.

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Will David Cameron’s resignation as Prime Minister have any effect on the farming sector in the UK?
It’s simply too soon to tell. There’s no reason to think the loss of David Cameron will make much difference. Currency and trade have the greatest impact – and the current collapse in sterling will actually be quite helpful in the short term.

The South African farming sector has expressed much concern about the implications that Brexit will have on agricultural exports from SA to the UK. Terms of trade that existed between SA and the UK as part of the EU will have to be renegotiated now. In your opinion, should the South African farming sector be concerned that the new terms of trade between SA and the UK will be less beneficial for South Africa than they were when the UK was part of the EU? Or is there a greater likelihood that South Africa and the UK will now agree on even more favourable terms for the trade of agricultural goods?

The collapse in sterling will make imports from South Africa less competitive in the short term. Longer term, a mutually acceptable trade agreement is very possible. Many believe the UK will become more open rather than less in terms of tariff protection. So South African wine should still find a home – although the English are now producing some pretty good wine of their own these days!