Financial support for the UK sheep industry needs to be ready in a push of a button if the risk of a no-deal Brexit becomes even greater as we approach the end of the transition period.
Despite a number of attempts made by the FUW and other industry representatives to emphasise the catastrophic impacts a no-deal Brexit would have on the UK sheep industry, lamb producers remain in the dark as to whether some form of support will be made available to them in the event of a hard Brexit while UK - EU trade negotiations have been extended yet again beyond the 13th December.
Over a third of sheep meat produced in Wales is exported annually and of this, more than 90% is exported to the EU. Hybu Cig Cymru - Meat Promotion Wales believes that changes to the red meat industry are inevitable whatever the outcome of Brexit talks. They also estimate that the additional bureaucracy and export requirements of lamb going to the EU from 1st January will increase costs by 4-8%, even under a free trade agreement. Under a no-deal scenario, tariffs averaging around 50% of product value would apply on top of that, which is likely to halve the value of exports given that importers are unlikely to be willing to pay the tariffs at current market value.
The UK Government is leading a Four Nations approach to contingency planning for the sheep sector, however no decisions have been made as of yet.
If negotiations on support for the sheep sector prior to previous Brexit deadlines are anything to go by, one or other, or a combination of two systems of compensation are likely to be considered: a headage payment based on the previous year's annual inventory or a slaughter premium on lambs. The FUW has highlighted that whatever is agreed, the support must be sufficient to make up for all losses and reach all lamb producers across the UK.