SCOTLAND’S sheep sector would be decimated by a ‘hard’ Brexit from the EU, with average incomes projected to fall by a massive 210%, sending sheep farming ventures plummeting £12,000 into the red.

That is the horrific prospect revealed by AHDB’s latest Horizon report, which looks specifically at how different Brexit scenarios would impact on Scottish agriculture.

Written in collaboration with Quality Meat Scotland and Scotland’s Rural College, the document was released at Wednesday’s AgriScot farm business event, where Rural Economy Secretary Fergus Ewing commented: “There is no doubt a hard Brexit would be catastrophic for Scottish farming, particularly our sheep sector. If we lost support like the Less Favoured Area Support Scheme, I fear thousands of hill sheep farmers would cease farming.

“I’m told that, in a private conversation, the Prime Minister’s right-hand-man, Damien Green, said: ‘Scotland wants to go to war over support for the sheep sector’,” confided Mr Ewing. “We are not going that far, but we have told Michel Gove in the strongest of terms how vital it is for support to be maintained, and I’ll continue to press him until we get answers. I’m not asking for any favours. I’m only asking those who promised, during the EU referendum campaign, that no funding would be lost, to keep those promises."

The AHDB report highlights the risks and opportunities Brexit presents to Scottish food and farming businesses under three scenarios – a gentle ‘evolution’ of our relationship with the EU, where agri-environment payments remain at current levels, alongside continued market access; ‘liberalisation’, where direct payments are removed, and other payments, under Pillar 2, are increased, and the final, hardest scenario – dubbed ‘fortress UK’ – where direct payments are removed, EU markets are limited by tariff, and agri-environment payments are reduced to 25% of current levels.

Sheep farming suffers most under the third scenario because there is insufficient Pillar 2 money to make up for the loss of direct support, just as the sector’s main export market puts up barriers to free trade.

The beef sector would also take a hit from a hard Brexit, with average income falling by 89%, to just £3,542. Conversely, a hard Brexit could actually benefit the dairy sector, where the current baseline income figure of £35,442 would jump 37% to £48,640, thanks to the rising cost of dairy imports from the Continent.

The AHDB strategist behind the report, Tom Hinds, said: “There are five critical questions Scottish farmers need to be asking themselves – first, are they taking enough time to take a hands-off view of the business, by taking a step back from the day-to-day farming?

“Do they know their costs, in relation to production? Is the business providing sufficient profit on a five-year rolling average? Do they have a plan that takes account of different payment scenarios? What skills will the business need in order to succeed?” he asked. “But, like Mr Ewing said, we need to know quickly exactly what Brexit we are facing.”