Scotland's sheep sector could be destroyed by a 'hard' Brexit, with average incomes expected to decline by 210 per cent, according to a hard-hitting report.
AHDB’s latest Horizon report, which looks at the state of Scottish agriculture under different Brexit scenarios, explained how a hard Brexit could send sheep farmers falling £12,000 into the red.
Launched at Agriscot in Edinburgh on Wednesday (15 November), the report is written in collaboration with Quality Meat Scotland and Scotland's Rural College.
Rural Economy Secretary Fergus Ewing commented: “There is no doubt a hard Brexit would be catastrophic for Scottish farming, particularly our sheep sector. If we lost support like the Less Favoured Area Support Scheme, I fear thousands of hill sheep farmers would cease farming.
“I’m told that, in a private conversation, the Prime Minister’s right-hand-man, Damien Green, said: ‘Scotland wants to go to war over support for the sheep sector’.
“We are not going that far, but we have told Michel Gove in the strongest of terms how vital it is for support to be maintained, and I’ll continue to press him until we get answers. I’m not asking for any favours. I’m only asking those who promised, during the EU referendum campaign, that no funding would be lost, to keep those promises."
Three scenarios
The AHDB report highlights the risks and opportunities Brexit presents to Scottish food and farming businesses under three scenarios.
This includes the scenario 'evolution', which means farm payments, labour supply and trade agreements remain similar. 'Liberalisation', which means direct payments are removed, Pillar 2 payments increase to 50% of current overall support, regular labour costs increase by 50%, and no UK - EU trade deal.
The third scenario the report states is 'fortress UK', where direct payments are removed, EU markets are limited by tariff, and agri-environment payments are reduced to 25% of current levels.
The worse case scenario for Scottish sheep farmers is under the scenario 'fortress UK', because of an insufficient amount of Pillar 2 funds to make up for the loss of direct support. The sector’s main export market will put up barriers to free trade under this scenario.
First Minister Nicola Sturgeon has described how Scottish farmers are "substantially in the dark" about what happens after Brexit through the "unconscionable" neglect of the UK government.
Ms Sturgeon called on the UK government to make good on its promise to give the devolved administrations a "genuine role" in discussions, saying they had been "cut out" of talks.
