As we all know the United Kingdom has voted to leave the European Union; 52% voted to leave and 48% to remain. The initial outcome is that of uncertainty. The pound initially slumped to its lowest level since 1985 due to ongoing uncertainty. The weakening of the pound could be seen as good news for UK farming, at least for the short term, but the question on everyone’s mind is what will happen next…
It is worth pointing out that the referendum is only an advisory vote, however it is unlikely that the UK Government would ignore it. The formal process to exit is started by triggering Article 50 of the Lisbon Treaty and the whole process can take two years which can be extended (or shortened) by agreement of all parties. Some believe that this will not happen straight away and there should be a period of informal negotiations before the formal declaration is made. It may be 2020 before ‘Brexit’ actually occurs.
Until then we will continue to remain members of the EU and so, in the short term, the Common Agricultural Policy will still apply meaning farmers claim the Basic Payment Scheme. We also remain part of the Single Market and so can trade freely with other European nations.
That said, businesses need to start thinking about how Brexit could affect them and need to be prepared for when changes do occur which could have profound effects on the UK farming sector. It is important to consider the impact of removal of the Basic Payment Scheme, exchange rate fluctuations and what the loss of the Single Market could mean to your business. Nevertheless, although it is easy to focus on the negatives when such upheaval occurs there will no doubt be opportunities for farming businesses going forward.
To find out about how Robinson & Hall can help you with your farming business, please contact your local office.