As Brexit’s future remains uncertain in the United Kingdom, experts warn that leaving the European Union without a deal poses major risks to Scotland’s food and agriculture sector. The EU is critical for Scotland’s international trade—accounting for 38 percent of the import market and 18 percent of the export market in 2017—according to the Chief Economist Directorate of the Scottish Government.
But in a no-deal scenario the UK would abruptly leave the EU without arrangements to replace trade agreements like the European Single Market—a measure which allows free trade across EU member states. World Trade Organization (WTO) rules would come into effect, requiring new agreements to be formed between the UK and its international trading partners.
While the British Government created a temporary tariff regime for a no-deal Brexit—reducing 88 percent of all international tariffs to 0 percent—these new regulations could set off a series of tariff-related barriers and economic challenges on iconic Scottish products like whisky, lamb, and potatoes.
“Our farmers will be pressed even further once more global markets open up,” Dr. Steven Thomson, a Senior Agricultural Economist at Scotland Rural College, tells Food Tank. “EU wheat or barley coming into the UK will face zero tariffs, yet anything exported into the European market would face about a 90 Euro per ton tariff.” Without EU regulations, European cereals would have a competitive advantage over Scottish wheat and barley—leaving whisky producers with an unpredictable market.
Sheep exports entering the EU could also be hit with a 40 percent tariff—causing a huge surplus of sheep meat in Scotland. “We are disproportionately reliant on the European market,” Thomson continues, “government modelling estimates there is a 20 to 30 percent price reduction achieved overnight—so it’s quite an unpalatable situation that the sheep industry is being faced with.”
New trade agreements about health and safety regulations will also need to be formed between the UK and its trading partners. But this could cause long delays for food safety checks and certification standards. “Retailers are petrified of a no-deal Brexit because they believe the shelves will be empty within minutes. Because if there are customs, then there are undoubtedly going to be delays,” says Thomson. Significant Scottish exports like potato seed would also need new certification. “Suddenly we’d have to stamp it as the UK, and we don’t know yet what the stamp would be,” explains Thomson.
In addition, since Brexit passed in 2016 the British Pound has continued to fall in value. According to Farmers Weekly, this will likely further impact farmers—causing costs of seasonal workers wages, machinery and fertilizers to soar.
These no-deal effects will stretch beyond agriculture—negatively impacting Scotland’s food and drink sector, tourism industry, and greater economy. “A no-deal has the potential to generate a significant economic shock which could tip the Scottish economy into recession,” reports the External Affairs Directorate of the Scottish Government.
Uncertainty whether the UK’s post-Brexit policy could adequately target these economic challenges is growing. First Minister Nicola Sturgeon stated she does not want Scotland “dragged down a political path we don’t want to go.” In August, Lord Ashcroft Polls found that 46 percent of Scots favor a new referendum to gain independence from the UK, and 67 percent of those voters would choose to remain in the EU if there was a second referendum—results which Sturgeon called “phenomenal.”
“There are aspirations for an independent Scotland within the EU framework. From the Scottish government’s perspective, they are looking to Europe,” Thomson explains, “we wouldn’t want to be too far away from that, in case there is a referendum.”
