The UK’s dairy farmers will be hit hard when the European Union leaves the bloc next month.
A report by the Royal College of Dairy Farmers warns Brexit could lead to a steep drop in milk production, which would hit their bottom line.
The report said the EU is set to impose new restrictions on the amount of milk that can be exported and on how much it can sell.
It said that while many EU countries would not face any significant economic consequences, some countries would be hit harder than others.
The UK has about 5% of the world’s dairy, making it one of the biggest buyers.
“If the UK were to leave the EU, the UK’s largest export market would be the EU,” said RCC Dairy chief executive Dave Hinch.
“The loss of EU milk exports would likely have a major impact on our sales in the UK.”
Dairy exports to Europe will be severely hit By 2021, the RCC says it expects UK dairy exports to decline by around 5% to around £1.6bn.
That could make it more expensive for consumers to buy milk and reduce milk prices in many areas, particularly in the south-east of England and in rural areas, the report said.
The RCC estimates that about 10,000 dairy farmers could be affected, and that they could lose up to £1bn.
It says some of those could lose a combined £20m in the first year alone.
Dairy farmers in the north of England would see the biggest impact, with the RRC estimating they could be forced to close up shop.
There are more than 5,000 UK dairy farms, the majority in the North East, but more than half are based in the Midlands.
“As the UK leaves the EU we will have to consider the impact on future exports and whether we can maintain the level of support and investment that we have in place,” said Mr Hinch, who said the RLCF wanted to ensure its members’ interests were represented in any future negotiations.
RCC chief executive Mr Hanch said the Brexit talks were the biggest challenge of his lifetime.
“We’ve got a lot of issues that we need to deal with and we need a strong negotiating position and we are determined to do that,” he said.
“I think the Government is right to take a balanced approach and to take the time to see what we can do to make sure we are getting the best deal for our dairy farmers.”
What do we know about Brexit?
The RRC report said that it was “highly unlikely” that any EU dairy farmers would be forced out of business by Brexit.
It also warned that “regulatory uncertainty” could mean that the EU could restrict the way UK dairy products are sold, which could make exporting more expensive.
However, Mr Hich said that the RBC was working closely with the EU on a solution, and was “very encouraged” that it is “working towards this”.
What does the RAC do?
The Royal College’s report says that the UK has an excellent track record in dairy farming.
It cites the £2.5bn investment made by the RMC, the £3.1bn of annual savings that the industry has made through investment, and the large increase in milk sales in recent years.
Mr Hint said the UK had been able to remain competitive with many other countries in the EU.
“One of the things that has been quite unique in the last year or so is that the Royal Canadian Dairy Company has been able, through the best possible practices, to become the biggest dairy buyer in Europe,” he added.
“So we’re seeing the benefits of having the biggest market and the largest market share, and we’re confident that this is the best place to be.”
Are you affected by Brexit?
If you’re a UK-based business, check the trade union’s list of support groups to see if there are other organisations you can contact.
They include the RCA and the RSC.
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