Brexit uncertainty has UK potato growers concerned
(Editor’s Note: This story is part of a new Spudman feature called Global Perspectives by Melanie Epp. It will focus on the world potato industry and its important issues.)
On March 29, 2016, 51.9 percent of United Kingdom citizens voted “yes” for the UK’s withdrawal from the European Union. Analysis shows that people living in rural areas voted to leave in greater numbers than the national average. Many of those rural folk were farmers who felt over-regulated and obstructed by red tape. Now, UK farmers are left wondering how a potential Brexit would impact their farms.
When it comes to potatoes, the UK is big business. Brits love their crisps (potato chips) and chips (fries), but rely heavily on imports to meet domestic demand. In fact, the UK imports the equivalent of about 2 million metric tons of potatoes each year, Cedric Porter, editor of World Potato Markets and Brexit Food & Farming, said in a recent interview. Of that, 750,000 metric tons is frozen fries, about 95 percent of which come from the Netherlands and Belgium.
“We completely rely on supplies from the EU,” Porter said, maintaining that a no-deal Brexit would add a 15-percent tariff to nearly all exports and imports of frozen fries. Tariffs could add more than €100 million (or $114 million) to overall costs, he added.
While European leaders have signed the Brexit deal, Parliament has not agreed to the nearly 600-page Withdrawal Agreement. Parliamentary debate on Prime Minister Theresa May’s Brexit plan began again the week of Jan. 7, with a vote taking place on Jan. 14. In a major defeat, MPs voted by 432 votes to 202 to reject May’s deal.
Without a deal in place, Brexit could have serious repercussions on trade, particularly when it comes to goods traveling over the land border between Northern Ireland and the Republic of Ireland.
“It’s just the logistics,” Porter said. “There are 20,000 trucks of frozen fries mainly going through the (English) Channel or over the Channel every year from Belgium and the Netherlands. The University of London did a calculation. With an extra two minutes of delays on trucks at the Channel, there would be a 50-kilometer long traffic jam.”
With all of the goods moving over the Channel, Porter worries that potatoes won’t be a priority. Medicine, fuel and fresh produce, he said, will likely be deemed more important than potatoes.
Switching markets isn’t an option either, Porter said. While France produces enough potatoes to supply the UK market, they already have buyers. The U.S. and Canada have their own domestic markets to serve as well, and when Canada does export, product usually goes to the U.S., he said.
Ramping up UK production
In 2018, British potato producers grew about 118,000 hectares, the third or fourth smallest crop on record, according to Porter. In fact, 50 years ago, British potato producers grew on twice as many hectares as they do now.
“In some ways, there’s no reason why the UK shouldn’t be growing more,” Porter said. “Obviously, economics have to stack out, though.”
The biggest potato and fry market for the UK is Ireland, and Ireland’s biggest potato market is the UK. That is, of course, for different products, and taking into account the location of chip processors. The border issues there could be significant, Porter said.
“You couldn’t operate a no-deal Brexit in Ireland because there are so many crossing points,” he said.
Porter also expects issues to arise for seed potato exporters. Each year, the UK exports about 100,000 tons of seed. About 60 percent of that goes to Egypt and Morocco, trade that is conducted through EU deals with the two countries.
“So that needs to be sorted out too,” Porter said. “There needs to be a reciprocal deal there.”
In the event of a no-deal Brexit, the UK has agreed to take EU seed, but the EU hasn’t agreed to take UK seed.
“British seed growers are concerned because they don’t know what’s going to happen to those markets,” said Porter, who pointed out that most of the 2019 sales would be done by the time Brexit is finalized at the end of March.
One of the big issues for farmers facing the referendum was the EU’s control over policies related to the use of technology, such as pesticides and genetically modified and gene-edited technology. While some felt that more access would be allowed following Brexit, Porter said possibilities may be limited.
“The original deal that Theresa May talked about was having a sort of common rulebook, so basically the rules and regulations would be the same between the two (states), so you could trade freely between them,” Porter said. “I think that’s been watered down a bit, so there would be opportunity to have slightly different regulations.”
British potato growers aren’t likely to grow GMO potatoes, though, said Porter, since their largest market, the EU, doesn’t allow imports. Having to segregate potatoes — both in-field and in storage — may influence decision-making, as well, he added.
“A lot of people are saying ‘I’m just not going to grow GMOs because then I can access any market,’” he said.
There is still opposition to GMO in the UK, much the same as there is in the EU. “So it would take quite a long time to break that down and get acceptance,” he said.
The EU recently decided not to accept gene-edited products either. “There’s a lot of people in the EU who wonder why they did that. That’s just a daft decision,” Porter said. “That’s the sort of stuff that makes people anti-EU.”
It’s particularly frustrating for Brits, since the Innate technology was actually developed in the UK, he said. “For me, as a taxpayer, my money went to developing something we could never use. So we’re paying for it and then exporting all the value out of it.”
While there’s much focus on Brexit’s uncertainty, it’s not all doom and gloom. In fact, the UK’s exit from the European Union could even spell opportunity. There is, for instance, room to increase British potato production, and there’s definitely room for a processor to set up shop in the UK.
“There are some opportunities, but there’s an awful lot of short-term pain for not a lot of discernible gain,” he said.