A sector by sector post-Brexit analysis by the NFU has identified the risk of low standard imports as the greatest trade threat to the poultry sector.
With just over a year to go until the United Kingdom is due to leave the European Union - at the end of March 2019 - staff at the National Farmers Union have conducted an assessment of how global trade will impact each part of the British agricultural industry.
Individual analysis covers dairy, crops, livestock, horticulture and potatoes, sugar, pigs.
The poultry sector is a sector that operates without EU subsidy but one that the NFU believes could be impacted in other ways by the UK's withdrawal from the European Union.
The NFU's primary concern is production standards - a concern that was heightened recently when US president Donald Trump's commerce secretary, Wilbur Ross, said in a speech in London that securing a free trade agreement with the US could hinge on the UK's readiness to abandon EU regulations.
He told business leaders at the Confederation of British Industry (CBI) conference that any post-Brexit deal with Washington would hinge on the UK scrapping rules set by Brussels, including, for example, regulations governing imports of chlorinated chicken.
EU tariffs
At the Egg and Poultry Industry Conference (EPIC) in November Mark Williams, chief executive of the British Egg Industry Council (BEIC) said research showed that only EU tariffs currently protected British egg products from lower priced and lower welfare equivalents from countries like the US, India, Argentina and Ukraine.
Pursuing a free trade policy with such countries would result in British farmers being significantly undercut, he said.
A large part of the cost of producing a dozen or a kilo of eggs in the European Union came from EU legislation on food safety, animal welfare and environmental protection.
Other countries did not have this cost. Whilst current tariffs protected UK producers from the cost differential with countries like the USA, Argentina, Ukraine and India, if the UK was to go down the free trade route with third countries all import tariffs would be removed. "All those countries become very much more competitive than we are," said Mark.
"We know the standards in those countries are not ours. None of those countries, including the States, have any national legislation about animal welfare for laying hens. Government needs to realise this."
Protect British
At the same conference, Gary Ford, the NFU's chief poultry adviser, said that the industry would hold Government Ministers to assurances that they wanted to protect British standards.
His union's new analysis of the impact of global trade deals on agriculture identified differences in standards as the biggest threat to the United Kingdom's poultry farmers.
"The NFU’s primary concern is on the fairness of new trade agreements," said the report's authors in their sectoral analysis.
"They must take into consideration the UK poultry meat and egg sector’s sensitivities and limit its exposure to imports produced to different standards.
"For example, a study by the Agricultural Economics Research Institute in the Netherlands confirmed that 16 per cent of the cost of producing a kilogram of shell eggs in the EU is the result of legislation on food safety, animal welfare and environmental protection.
“This is not required of third countries. This places the UK at a significant competitive disadvantage, as the UK produces at a higher cost compared to other countries.”
Veterinary equivalence
On the wider poultry sector, the report's authors say: "The UK is a net importer of poultry meat and poultry meat products. Imported poultry meat is either in the form of whole chicken breast or made-of-chicken-breast and it comes mainly from the EU.
"Poultry meat products come both from EU and non-EU countries, with Thailand and Brazil having preferential trading arrangements. South Africa is the biggest export market for the UK, followed by Hong Kong.
"The EU has a veterinary agreement with South Africa, which grants EU member states, including the UK, veterinary equivalence. Veterinary equivalence is when South Africa considers UK production methods and standards equivalent to theirs and therefore allows the UK to export to them.
"As part of the EU-South Africa trade, development and cooperation agreement, the EU benefits from zero duty access for its poultry meat. It is important that the UK can retain veterinary equivalence once it leaves the EU.
“Poultry meat exports are essential for the issue of carcass balance, considering UK consumers’ preference for breast meat.”
Free and frictionless
NFU Brexit adviser Lucia Zitti says that the UK’s trade in agricultural goods is at the moment largely with the EU, so maintaining access to this market in a free and frictionless way is a priority, she says.
But the European Union's chief negotiator Michel Barnier has warned that maintaining free trade access to the EU market post-Brexit would require the UK to adhere to EU standards.
Following Wilbur Ross's speech in London, he said: “When I hear the US Commerce Secretary Wilbur Ross in London call on the British to diverge from Europe to better converge with others – towards less regulation, environmental, health, food and no doubt also financial, fiscal and labour regulation – I have to wonder,” he said during a speech in Rome.
“The United Kingdom has chosen to leave the European Union. Does it also want to distance itself from the European model? That’s another question. It is up to the British to tell us whether they still adhere to the European model.
“Their answer is important because it sets the direction for the discussion on our future partnership and the conditions of its ratification,” he said.
Regulation differences
Lucia Zitti said: "Only when the long-term UK-EU relationship is agreed and clearly defined should the UK government begin to engage in formal trade negotiations with third countries (i.e. countries beyond the EU)."
And, she says: "New trading conditions must account for differences in regulations and standards to ensure that UK farmers are not put at a competitive disadvantage to producers elsewhere in the world who are subject to different standards."
The report suggests that securing new trade agreements with other countries around the world will provide the UK agricultural industry with new opportunities. However, it says such deals could also create threats to domestic production.
