So, next week Theresa May is to fire the starting gun on
That starts a countdown of two years before – under rules
laid down in the now infamous Article 50 - the UK departs from the European
Union, whether a political deal has been agreed or not.
But that does not mean that Britons, including those in the
food and agriculture sector, should wait until 2019 before they should act on
Brexit, says Michael Aubrey, partner and joint leader of food and agribusiness
at UK law firm Mills & Reeve.
Clearly where the talks lead the UK, and what agreements the
country will make with its biggest trade partner, is difficult to predict.
'The key issue'
"That's the key issue – the uncertainty," says Mr Aubrey, who is speaking on Brexit at May's Agrimoney Live conference.
Indeed, that is all the more reason for the likes of farmers
and agribusiness leaders to take a look forthwith at the potential
It may be worth dealing with some matters and completing
some deals during the pre-Brexit period.
"People should consider whether it is worth progressing
matters now," says Mr Aubrey, while we know the rules that we are dealing with.
"When we are outside the EU, we will have a huge amount of
completely new legislation to deal with", so if agreements will continue
post-Brexit then it is important to build in flexibility.
Lesson from history
For instance, landowners who no longer wish to carry out
farming operations themselves, may prefer contracting arrangements rather than
tenancy agreements. These provide more flexibility for both parties and also
enable the landowner to retain more control.
Mr Aubrey recalls the problems caused by the change in farm
subsidy arrangements nearly 15 years ago, when the area-based single farm
payment was introduced, replacing schemes such as dairy premium and arable area
payments which were based on production.
In addition to attracting complaints of unfair subsidy from
among WTO members, the reform raised the question of whether subsidies should
be attached to the land or the person farming it – an important question in
This sparked confrontation between landowners and tenants, a
tension avoided by landowners who farmed through contracting arrangements.
Another reason why, ahead of Brexit, such arrangements look the "far better and
Nor should farming and food producers believe that, once
outside the EU, they will be able to ignore all European rules and regulations.
First, they should remember that those which are "directly
applicable" - often stemming from EU directives, and covering matters such as
VAT, and the TUPE employment rules - will remain in force, having been
transposed into UK law by a domestic Act of Parliament.
Secondly, the rules imposed by European Convention of Human
Rights will still apply, as it is not affected by Brexit.
Furthermore, EU rules will still be relevant for UK goods
exported to the EU.
Indeed, "farmers may have twice as much to think about", Mr
Aubrey says, with potentially different rules for produce remaining within the
UK or being exported elsewhere.
With an eye to exports, as well as the sector's broader
wellbeing, Mr Aubrey added that the needs of the UK agriculture and food sector
should be paramount in Mrs May's mind as she opens talks on the terms of the
country's departure from the EU, and on arrangements in the post-Brexit era.
"She has to appreciate the importance of the industry" in
terms of trade as well as food security, Mr Aubrey says, "do not sell us
Of course, the UK is a major importer of Continental
produce, including the likes French cheese and Italian Prosecco, as well as an
exporter – a factor which should give us
some bargaining power.
"We should try to keep tariffs down if we can, rather than
get into a tit-for-tat situation."
Food vs car produers
The negative effects of the wrong decisions being made for
the farming community would be widespread, not only because farmers are the
caretakers of a large proportion of UK land but also because the importance of
the agri sector to the economy – a dynamic often overlooked.
While the fate of car plants in the likes of Sunderland and
Swindon has attracted a high profile since the UK voted in favour of Brexit
"the number of people in farming, or dependent on it, is much greater than in
the automotive sector that we hear so much about", Mr Aubrey says.
The rural sector also contributes more than the automotive
sector to the UK economy.
Those involved in agriculture should work to change the
public perception of the industry.
National law firm Mills & Reeve continues to analyse
what Brexit means for clients across the UK and globally and has a dedicated
web page for all things Brexit at www.mills-reeve.com/brexit