New Zealand trade deal threatens to damage the viability of UK farming, industry bodies warn

Farming organisations have warned that the trade deal with New Zealand, announced yesterday, could damage the viability of UK farming in the years ahead. 

NFU president Minette Batters said the deal would let in large volumes of imports, while offering nothing for UK farmers, while NPA chief executive Zoe Davies said it sets a dangerous precedent for the pig sector.

The UK Government said the deal would benefit consumers and businesses, with Prime Minister Boris Johnson saying it will cut costs for exporters and open up New Zealand’s job market to UK professionals.

The Government’s own analysis, however, suggests the deal itself is unlikely to boost UK growth, with the estimated impact on growth being ‘close to zero’.

While pork imports from New Zealand are not a factor, the deal appears to have opened up huge opportunities for New Zealand’s farming industry, which is already geared towards the export market. It does not specify that imports, including of dairy products, lamb and beef, must meet UK production standards.

International Trade Secretary Anne-Marie Trevelyan said the deal ‘affords opportunities in both directions for great sharing of produce’ and British farmers should not be worried.

In a video call with his New Zealand counterpart Jacinda Ardern, Mr Johnson used a rugby metaphor to describe the outcome: “We’ve scrummed down, we’ve packed tight, and together we’ve got the ball over the line and we have a deal. And I think it’s a great deal,” he said.

Ms Ardern said: “I loved your use of rugby metaphors, but if we were going to continue that on, then naturally it would conclude with the All Blacks winning. And I know that New Zealand feels that way with this free trade agreement, but actually, it’s good for both of us, as it happens.”

But, with New Zealand being a huge next exporter of lamb and virtually self-sufficient in beef, the UK farming believes, in terms of agriculture, the benefits are all in the southern hemisphere, as was the case with the Australia deal.

Industry reaction

Mrs Batters said: “The announcement of this trade deal with New Zealand, coupled with the Australia deal signed earlier this year, means we will be opening our doors to significant extra volumes of imported food – whether or not produced to our own high standards – while securing almost nothing in return for UK farmers.”

‘We should all be worried that there could be a huge downside to these deals, especially for sectors such as dairy, red meat and horticulture.

“The fact is that UK farm businesses face significantly higher costs of production than farmers in New Zealand and Australia, and it’s worth remembering that margins are already tight here due to ongoing labour shortages and rising costs on farm. The government is now asking British farmers to go toe-to-toe with some of the most export orientated farmers in the world, without the serious, long-term and properly funded investment in UK agriculture that can enable us to do so.

“This is the sort of strategic investment in farming and exports that Australian and New Zealand governments have made in recent decades. There needs to be a coherent approach across government to bolster UK farming’s productivity.

“It’s incredibly worrying that we’ve heard next to nothing from government about how it will work with farming to achieve this.

“This could damage the viability of many British farms in the years ahead, to the detriment of the public, who want more British food on their shelves, and to the detriment of our rural communities and cherished farmed landscapes.”

NPA chief executive Zoe Davies said, that despite the lack of New Zealand pork imports, the deal is a concern to the UK pork sector.

“The New Zealand trade deal is of interest to the British pig industry because of the precedent it sets in terms of other trade deals rather than any change to current trade, which for pork is non existent,” she said.

“The UK Government’s approach to equivalence of standards is worrying and could severely disadvantage producers in this country by allowing access to lower standard imports.

“There is a lack of clarity at this time and as discussions on the detail continue we urge our Government to be mindful of the damage which could be caused to our fragile industry, particularly with future trade deals.”

Quality Meat Scotland Chief Executive, Alan Clarke, said: “The trade agreement between the UK and New Zealand could have a serious impact on Scotland’s red meat industry – particularly our beef producers.

“Compared to current conditions for beef, the deal represents a significant increase in New Zealand beef producers’ market access and, with farmgate prices in Scotland 25-30% higher than in New Zealand, this leaves Scottish farmers open to considerable competition.

“This is the second major post-Brexit trade agreement and the cumulative increase in market access poses a longer-term risk.”

Mark Tufnell, deputy president of the Country Land & Business Association (CLA), said: “Instinctively, we support free trade but by definition there has to be something in it for both sides. We see the opportunity for New Zealand farmers in this deal, but aren’t so sure what the opportunity is for those of us in the UK.

“Over time, New Zealand will be able to sell even larger quantities of meat and dairy produce into the UK, often produced much more cheaply than we can do ourselves. This risks undercutting UK farmers and putting a question mark over the viability of their businesses.

“Government is leaving the industry in the dark about what this deal really means for agriculture, setting a worrying precedent for other Free Trade Agreements we may strike with other major food exporters – many of which have far lower animal welfare and environmental standards than we do. Government promised that suitable checks and balances would be put in place to ensure we would not be undercut in this way. So far they have failed to materialise.”

The deal gives New Zealand the go ahead to export an additional 35,000 tonnes of sheep meat during the first four years of the agreement, and a further 50,000 tonnes from year five, in addition to the existing tariff-rate quota (TRQ) held as part of the WTO agreement that already allows New Zealand to export 114,000 tonnes to the UK each year. The new agreement will see all quotas removed by year 15 meaning New Zealand will have tariff and duty free access for unlimited supplies of sheep meat product to be exported to the UK .

This agreement in principle follows quickly on the heels of a similar agreement in principle with Australia.

Phil Stocker, National Sheep Association chief executive said: “For all the warm words we’ve heard from our Government this news is highly disappointing, even though I’d say it’s no surprise. You only have to see the statements being made by the red meat sector in New Zealand for evidence they intend to send more and more sheep meat in our direction, and this in addition to the increase in access by Australia means together, in just over a decade, these two countries will have access to our entire volume of lamb consumption.

“Although the Government has long made its intentions clear over trade liberalisation the one thing they have promised us is protection of the high standards of production, environmental protection and animal welfare that British farmers adhere to. But here, in the agreement in principle, in black and white, the get out clause is clear for all to see – recognition that New Zealand and the UK’s farming systems are different but provide comparable outcomes.”

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About The Author

Editor of LBM titles Pig World and Farm Business and group editor of Agronomist and Arable Farmer. National Pig Association's webmaster. Previously political editor at Farmers Guardian for many years and also worked Farmers Weekly. Occasional farming media pundit. Brought up on a Leicestershire farm, now work from a shed in the garden in Oxfordshire. Big fan of Leicester City and Leicester Tigers. Occasional cricketer.