Warning that farm income could be slashed without EU free trade deal

Updated: 

Farm incomes could be slashed by more than half if Britain leaves the EU without a free trade deal, an industry advisory body has warned.

The Agriculture and Horticulture Development Board (AHDB) predicted average annual farm incomes could fall from £38,000 to £15,000 if the UK unilaterally opened its doors to cheap food imports while removing EU subsidies following Brexit.

Even if Britain were to impose protectionist tariffs on imports under World Trade Organisation rules following a "cliff edge" Brexit, the AHDB said average incomes could still drop to £20,000.

In contrast, if the UK left the EU with a deal that largely retained existing trade relations and the regulatory framework, it said there could be a slight rise in average income to £41,000.

The findings come after Theresa May set out details on Monday of the Government's contingency planning to maintain Britain's status as an "independent trading nation" if it fails to reach agreement with the EU, amid continuing deadlock in the talks in Brussels.

The analysis by the AHDB - a statutory body funded by a levy on the industry - looked at the potential impact of the various Brexit scenarios on farm subsidies, future trade relations with the EU and the rest of world, the availability of migrant labour, and the system of regulation.

Phil Bicknell, the AHDB's market intelligence director, said that with the top 25% best performing farms remaining profitable under all three scenarios, the report underlined the need for farmers to adopt best practice before withdrawal in 2019.

"This analysis underlines the fact that performance matters," he said.

"Individual farms can't determine policy, and detail of the UK's Brexit deal is still some time away, but farmers can and should prepare now for Brexit by adopting best practice, or risk falling behind.

"Buzzwords like competitiveness, resilience, productivity are not new to agriculture but Brexit brings renewed focus on farm performance.

"Do nothing and businesses that are currently profitable run the risk of heading into the red. There is plenty that individual businesses can do now to get fit for the future."