FARMERS are gaining in one way from the present Brexit uncertainty. Each piece of negative news about prospects for a negotiated exit from the EU for the UK puts further pressure on sterling.

When a deal looked likely a few weeks ago sterling rose, but it has now slipped back. This has been the pattern since the EU referendum result in 2016. This boosts the fortunes of agriculture, since exports become more competitive and the UK less attractive for imports. If this continues until the end of October, when the rate is set for converting euro into sterling for direct payments, it will be another boost for farmers.

This will be the last year when that conversion happens. After next March we should still be using the CAP model for direct payments, but there will be no need for conversion.

In the Brexit debate it is hard with both London and Brussels to sort out bluff from reality. It is obvious that Theresa May needs to talk tough, at least until her party conference is over if she is to keep her plan for a negotiated exit alive. That is probably why we are getting such extreme warnings now about what will happen with a no deal Brexit. While this may well be part of a game of bluff, the time has come for agriculture and the rest of industry to begin thinking more about the practical realities of a no deal exit.

Because we have had 45-plus years of policies that mirrored those of the EU, it is difficult to work out the impact of a sudden departure with no deal. Under those circumstances the government in London would almost certainly roll forward most EU legislation in areas such as the environment and food quality. Beyond that, however, the challenges would be many. We would be under pressure to come up with new rules and regulations more quickly than ever envisaged. These would cover everything from regulations to approve the chemicals we use every day, through veterinary certification of imports and exports to how we would handle geographic origin (PGI) products currently protected across the EU.

The big and immediate impact would be on the market, and that really is an unknown. Look at any supermarket shelf now, and it is clear the UK is dependent on imports even of the products we produce. It is hard to envisage what would happen if we leave the EU in March with no free trade deal. All the Irish beef, Dutch bacon and Italian cheese that fills our supermarket shelves would be in limbo. In theory World Trade Organisation tariffs would be applied, but these are not automatic and as a current EU member state, the UK is not a even a member of the WTO.

This is an issue that cuts both ways, since the UK would face the same problems in exporting. Given the timing of Brexit, an early problem would be getting lamb into France. One argument is that the UK would win from no deal, since it imports more from the EU-27 than it exports, meaning a hard Brexit would create opportunities for UK suppliers. In reality the UK farming industry could not gear up production to meet the demand for displaced products. An additional complication is that suppliers in the EU-27 are very good at targeting different cuts to different markets to maximise revenue.

While it has not said much about potential food shortages with a hard Brexit, the government is well aware of major supply chain problems. The UK simply cannot survive without food imports. This was true long before we joined the then EEC in 1973, and will remain the case whether food comes from the EU 27, Asia, South America or New Zealand and Australia.

This is why there are constant rumours the government wants to tear up the EU rules that set food standards. The United States wants this as part of any free trade deal. This would reduce rather than increase the price of food, since the countries supplying the UK would then be lower cost producers than the EU 27. Far from boosting prices for farmers, a hard Brexit could then have the opposite impact. That is why, no matter how heated political events become over the next few weeks, 'jaw jaw' for an outcome that will retain access to the EU-27 market makes sense for just about everyone outside the Westminster bubble.