TWO NEW issues came onto the Brexit agenda this week – the first is the prospect of walking away with no deal in place, the other is the idea of a new trade arrangement, where the UK would join the NAFTA free trade deal that links Canada, the United States and Mexico.

This is despite NAFTA having been criticised by Donald Trump for the tens of thousands of American jobs lost to Mexico. Both are evidence of a dawning realisation at Westminster that the EU is following its own Brexit agenda and not that set by the UK.

We have seen the prime minister, Theresa May, trying to buy a trade deal; now she is threatening to push the nuclear option button of no deal.

This all means that along with all the other issues on the table, agriculture now faces the consequences of there being no negotiated deal to leave the EU. This joins the need for a new UK support package and what will happen to the EU rules farmers wanted to escape when many voted to leave the EU.

At one level, no deal might bring a short term boost. It would almost certainly reduce global confidence in the UK economy. This would see sterling plunge yet again, which would be short-term good news for agriculture.

However, one of the big boosts – an increase in the value of support payments set in euro – would no longer be part of the equation as we would be out of the CAP. Exports would however be easier and imports more expensive. However, for farmers, like the rest of society, it could not be deemed good news that the economy would face a crisis because of uncertainty.

Trade would be the big issue if there was no deal. The government might be spinning the prospect of joining NAFTA as a half-hearted way to suggest to the EU it does not need a deal. In reality, NAFTA would offer few prospects for agriculture. The US and Canada are economies more focussed on agricultural exports than imports. Their plans would be to target the UK market, despite its 60 million population being small beer for any exporter compared to the size of the EU, which is their prime target for trade deals.

The loss of markets for farm produce in the EU would certainly hurt Scottish farmers. Without simple tariff-free and customs-free access to those markets, food companies would face higher costs, and that could only reduce returns for farmers. Exporting would become much more complicated with the return of borders and customs checks. Those supporting a 'no deal' outcome talk about modern technology and electronic customs controls, but in reality physical checks would still have to happen.

Trade is always a double edged sword. Since the UK is a net importer of food, anything that makes it less attractive could boost demand and prices for home-produced food. If economic theory were driving the outcome, trading as we would be on the basis of World Trade Organisation tariffs would be a boost for British agriculture. It would overnight have a more profitable home market.

However, we do not live in a world of economic theory. In reality the government would act to prevent food prices rising. It would not want people to view Brexit as a political outcome that denied them access to the Danish bacon, French wine or Irish beef they have enjoyed for generations. It would take action to prevent tariffs driving up prices or reducing choice.

The government has already hinted at this, by saying it would want to lead the way for open markets, by importing with minimal tariffs. In other words, the UK would open its markets in the hope that this would secure parallel generosity. One result would be an influx of cheap food from the southern hemisphere, Asia and the NAFTA countries.

Similar generosity is however unlikely to come from a bitter EU-27. A 'no deal' outcome would create anger and a wave of protectionism against UK food. That would snuff out any marginal gain for agriculture from another plunge in the value of sterling. For that reason, farmers need to hope that talk of leaving the EU with no deal and of joining NAFTA is simply bluff to bring the EU back to the negotiating table with a more realistic agenda.