IN A 'worst case scenario' Brexit could cause the UK's average farm profitability to drop from £38,000 to £15,000 a year. Modelling work conducted for the AHDB’s latest Horizon report attempts, for the first time, to quantify the potential impact of various possible post-Brexit situations on Farm Business Income across agriculture and horticulture’s levy-paying sectors.

Launched at AHDB’s Grain Market Outlook Conference this week, the analysis projects the effect of different trading arrangements, farm support measures and labour availability, ranging from a soft ‘business as usual’ approach with current levels of support; through a liberal approach to trade, with tariff-free access to the UK and reduced support; to a cliff-edge Brexit, which reverts to WTO regulations and sees dramatically reduced support payments.

Under all three scenarios, the changes in the UK’s trade relationships will impact on farmers’ bottom line after the UK leaves the Single Market, whether or not a Free Trade Agreement is negotiated with the EU. Related policy decisions also leave sectors where direct support has been a key part of farm revenues – such as beef, lamb and cereals – particularly vulnerable.

NFU Scotland’s director of policy Jonnie Hall commented that, while the modelling examined the more 'extreme' Brexit scenarios, its analysis "unequivocally justifies" the priorities that the union has laid out for Scottish farmers.

"Scottish and UK agricultural and food products must have frictionless access to existing and new export markets, and that the domestic market must not be exposed to cheaper imports that lack Scotland's exemplary animal welfare and environmental standards," said Mr Hall.

"And it is beyond doubt that this AHDB work demonstrates the vital role that continued, targeted farm support will have, not least through an unknown transition period. The evidence presented underscores NFUS calls for continued support refocused on action-based measures to bring about improved productivity across sectors while delivering environmental benefits and safeguarding and enhancing production standards.

“That would create the bed rock of a thriving farming, food and drinks sector for the post Brexit era.”

Seeking its own positive spin, AHDB stressed that the top 25% of businesses, regardless of sector, remained profitable under every scenario modelled – and farmers should take the chance now to learn from that high-performing group what is achievable in their own farm businesses.

AHDB market intelligence director Phil Bicknell said: “This analysis underlines the fact that performance matters. As individual farms, we know that we can’t determine policy but we can recognise that performance is key to preparing for the challenges ahead.

“Buzzwords like competitiveness, resilience, productivity are not new to agriculture but Brexit brings renewed focus on farm performance," he said. "Do nothing and businesses that are currently profitable run the risk of heading into the red. There is plenty that individual businesses can do now to get fit for the future.”

The AHDB's Brexit modelling work is not done – it will continue to re-run the scenarios in future as more detail of actual policy decisions in key areas emerge, with the aim of giving the industry an ever more accurate forecast to work towards. AHDB will also later publish specific results for Scotland using Farm Business Survey data.

All AHDB’s analysis on the implications of Brexit for UK agriculture and horticulture can be downloaded at www.ahdb.org.uk/brexit