Image: David Wright
Image: David Wright

Farmers in the UK could be set to lose as much as £850 million in profits collectively, according to new research.

Farming consultancy firm Andersons said farmers will inevitably struggle to survive without government support.

It added that a no-deal Brexit would be a greater issue for the farming industry than foot-and-mouth mad cow diseases.

If the UK leaves the European Union without a deal, it will be forced to trade under World Trade Organisation (WTO) terms. It means exports of lamb and live sheep are likely to face tariffs of 45-55%, while some expect beef to have tariffs of up to 90%. Such high tariffs will make it more expensive for other countries to purchase UK goods and would likely cause a drop in exports.

The government has said it will “provide direct support to boost some sectors in the unlikely event this is required”.

The UK’s farming industry currently receives £3.5 billion worth of subsidies from the EU through the Common Agricultural Policy. Andersons research estimates total profits for UK farmers would fall by 18% in the first year after a no-deal Brexit, compared with the average between 2016-18.

Michael Haverty from Andersons said: “At the moment a number of farms across numerous sectors are heavily reliant on support.

“Many farms are struggling to break even. If they get a hit in terms of profitability of 18%, and for some sectors significantly more, then that has huge implications for the viability of those farms.”

The typical dairy farm in England will see profitability drop from 3.4p per litre of milk to 0.9, the research suggests. Scottish dairy farmers would struggle to break even, it said, but Northern Ireland would likely see its fairy farmers make losses.

Mr Haverty added: “If we look at some of the other key challenges of the past – BSE and foot-and-mouth for instance – they were significant in their own right but perhaps a bit more confined.

“A no-deal Brexit is more encompassing. It’s not just within the agricultural sector, it’s within the wider economy as well. On that basis it’s the biggest challenge this industry has faced probably since World War Two.”

The Department of the Environment, Food and Rural Affairs said in a statement: “We have been very clear that once we leave the EU on 31 October, we will replace the Common Agricultural Policy with a fairer system of farm support and our new trade deals must work for UK farmers, businesses and consumers.

“As we have said before, the cash total for farm support will be protected until 2022, even in the event of a no-deal Brexit.

“We will also intervene to provide direct support to boost some sectors in the unlikely event this is required.”