Scots farmers pessimistic over Brexit

Around three-quarters of Scottish farmers have a sceptical or pessimistic view of the industry post-Brexit.

This is according to new analysis of a survey of nearly 2,500 farmers, crofters and smallholders constructed by Scotland’s Rural College (SRUC) and the James Hutton Institute on behalf of the Scottish Government.

Published today (Friday 19 June), the new briefing note finds three main types of farmer based on their outlook towards Brexit.

Just over a quarter (26 per cent) of the sample were positive to the post-withdrawal landscape, though the remainder were less positive.

Around 37 per cent of respondents stated negative views towards the outcome for a post-withdrawal Scottish agriculture and the remaining 37 per cent stated more neutral views, but also had concerns around any future planning for the farm business.

The three main types of farmer identified in the survey:

  • Optimists were those who mostly agreed with statements around more opportunities and more willingness to invest for future returns.
  • Pessimists were identified with more negative statements towards the financial implications of Brexit.
  • Neutrals had less agreement with these negative statements but were mostly concerned around the complexities of Brexit to engage with any future planning.

The analysis also found differences in the farm population which drive these outlooks. Specifically, farmers with higher levels of education were more likely to be actively preparing for Brexit compared to others.

Farms in Less Favoured Area regions, and those in the Highland and Islands, were more likely to hold more negative views towards Brexit than those outside these areas.

Professor Andrew Barnes from SRUC, who conducted the research, said: “What this work shows is the large amount of stasis in the industry driven by the uncertainties around Brexit and wider trading conditions.

“Ultimately, the concern is that this leads to a decline in investment and has consequent impacts on productivity and growth in the future. Making a business more resilient to change, as we’ve seen in the recent Covid-19 outbreak, is essential to ensuring sustainability for our own agricultural industry.”

Scotland’s Farm Advisory Service, which is delivered by SAC Consulting, part of SRUC, has been helping farmers untangle some of the complexity of Brexit with practical advice on its website. This includes including the A to Z of Post-Brexit Trade.

Chloe McCulloch, Principal Consultant at SAC Consulting, said: “Farming has always been a volatile business and farmers are resourceful people. However, with Brexit it’s possible that the magnitude of the shock heading our way will mean that for many businesses the status quo isn’t sustainable, and actually seeing that written down is really tough.

“We also see many farmers waiting for things to become clearer before starting to plan, but uncertainty is likely to become the new normal as we enter potentially decades of trade negotiations, and there isn’t going to be a better time to start planning.

“The key thing for farmers to bear in mind is that they do have options, but the longer they have to get used to these possible futures, the easier it will be when it comes time to start implementing them. What might seem impossible at first glance could, when they live with the idea for a while, begin to feel more realistic.”

Dr Lee-Ann Sutherland, a research leader at the James Hutton Institute, said: “The research shows that although some farmers are optimistic, the majority see major risks associated with Brexit.

“The biggest issue is uncertainty: farming is a long-term business, with many path dependencies. It can take years to shift a farm’s trajectory. Brexit makes it difficult for farmers to plan, which impedes their ability to move their farms forward.

“Increasing the certainties around how Brexit will impact on commodity prices, subsidies available and other economic conditions is essential to enabling Scottish farmers to develop their businesses.”

This work was funded under the Scottish Government’s Strategic Research Programme under the Rural Industries work package.

The briefing paper can be viewed here.

Posted by SRUC on 19/06/2020

Tags: Brexit, SAC Consulting, Rural Business
Categories: Natural Economy | Consulting and Commercial