The farming industry is in limbo right now as they wait to see whether the UK will successfully negotiate a deal with the European Union or whether they will be forced to deal with the fallout of a no-deal Brexit. 

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Former NFU economists warn that the farming industry is already in a difficult position and it is likely that 1 in 3 farms will fold completely within 5 years of a no-deal Brexit. It is estimated that around half of farms are already failing to make a profit and that situation would only get worse if we leave the European Union without a deal. 

Direct payments from the government to farmers are due to be phased out next year, which puts small farms that are already in trouble in a very difficult position. If the UK leaves the EU without a deal and reverts to World Trade Organization tariffs, it is believed that the situation will become a lot worse. 

The government is planning to replace the direct payments with the Environmental Land Management (ELM) scheme. However, this will not benefit a lot of small farmers because it only awards money for making environmental changes and provides money for things like improving soil health, protecting wildlife and taking steps to prevent climate change. It will not award money based on the area of land that is farmed as the current system does and a lot of struggling small farms are likely to be left behind. 

At the minute, farmers are unsure about what the situation will be. It’s important that all farmers seek the advice of organisations like Ellisons Solicitors so they can navigate a lot of the potential legal difficulties that they may face as the farming industry goes through this transitional period. 

It is believed that the lamb industry will be the hardest hit as the UK exports the equivalent of 4m sheep to Europe every year, but all farmers are likely to struggle. 

The COVID-19 pandemic has put even more pressure on agriculture and many farmers are finding it difficult to navigate the specific challenges associated with coronavirus while also preparing for the possibility of a no-deal Brexit. Agricultural lawyers have warned that the farming industry must adapt and diversify if it is to survive but there is undoubtedly a difficult road ahead. 

The transition period ends on the 31st December and the government is in talks with the EU to negotiate a trade agreement before that date. If an agreement is not reached by this date, the EU will put tariffs on any goods coming on from the UK, which will put immense financial pressure on farmers. Unfortunately, talks are in a difficult position due to disagreements and legal challenges around the Irish border question. The UK government has been accused of breaching international law and the EU are currently threatening legal action against them. 

Only time will tell whether a deal can be reached in time to protect the future of the farming industry.