The British government has announced a ‘bounce back’ plan for the agriculture, food, and drinks industry, intended for recovery in the post-corona period and expansion in the post-Brexit era.
This ‘bounce back’ plan aims to enable the British agro-industry to grow their trade activities abroad and focuses mainly on Asian markets such as Japan, New Zealand, and Australia.
The announcement of the recovery and expansion plan coincides with the faltering British negotiations over free trade agreements with both the United States and the European Union. The United States, being a large food producer itself and viewing Great Britain as a new export market, is not eager to import British agricultural, dairy, agri, and meat products.
The British negotiations with the EU are primarily stuck because the European Union insists on the rules and criteria that also apply across Europe and refuses to make (legal and financial) exceptions for the British. There is also major disagreement over (EU) fishing rights in (the British part of) the North Sea. Due to this situation, the British agricultural sector risks severe difficulties and could lose export markets within a few months.
If there is no trade deal between London and Brussels this year and the UK leaves the EU without any arrangements, major trade chaos threatens. Failure to reach a trade agreement between the EU and the UK would have serious consequences for the agri-food sector on both sides, according to a joint statement issued in early June by the main agri-food stakeholders in the EU.
The announcement by Prime Minister Johnson that he also wants to seek markets in Asian countries for agriculture and livestock is seen as a response to last week’s plea by dozens of British agricultural organizations that the British agro-industry urgently needs modernization and expansion.
The corona crisis has revealed, according to some thirty organizations, systemic faults caused by a long-standing lack of support for domestic food producers. The group calls for more export, import substitution, automation, and upskilling. They believe that significant investments in the domestic agriculture, processing, and food service sectors are needed in the short term.
In an online-published statement, the British government asserts that although the sector "has done well to adapt," exports have been severely impacted and the government "is committed to supporting these key industries to return to international markets and grow market share once again." The announcement stems from growing concern about the direction British agri-food trade, which was €58 billion in 2019, will take after Brexit, and about the still unclear future relationship between the EU and the UK.
The agriculture, food, and drinks sector is the largest manufacturing industry in the United Kingdom and plays a crucial role in the country’s food supply chain, which contributed £121 billion to the British economy in 2018 and supported around four million jobs. In 2019, British exports of food, animal feed, and beverages amounted to £23.7 billion, an increase of 4.9% compared to 2018.