There are not many winners of the UK general election.
But agriculture could yet prove one of them.
Although the ramifications of the election - which failed to
hand Conservative leader Theresa May a clear majority, let alone the expanded
one she had sought – are still steeped in uncertainty, many outcomes point to some
benefits for farmers.
The sector is getting a short-term rush from a renewed
decline in the pound, which plunged 2.5% against the dollar at one point as Ms
May's reduced grip on power became clear.
Against the euro, it tumbled below E1.13 to £1, sterling's
weakest level in seven months.
A weaker pound makes the UK's exports more competitive, including
agricultural ones, such as meat and dairy, as well as crops including barley,
for which the UK has been struggling to find sufficient buyers this season.
Furthermore, it raises the value in local terms of dollar-denominated
assets, a factor for the wheat market, for which export demand is less relevant
this season, thanks to strong domestic poultry and bioethanol demand, but
import parity (ie the value at which imports become financially viable) is.
Soft vs hard
But the election result could have longer-term benefits too.
UK agriculture industry representatives have, in comments on
the strategy for the UK's exit negotiations with the European Union, clamoured
for a so-called "soft" Brexit, which would see trade barriers and tariffs kept
to a minimum, rather than a more go-it-alone "hard" strategy.
The NFU (National Farmers Union) for instance, said that UK farming
"needs an ambitious bilateral trade agreement with the EU that delivers
frictionless, tariff-free trade".
'Into the rubbish bin'
A soft option now seems more likely, given that any deal
looks like having to go before a Parliament which looks more moderate in its make-up
As George Osborne, the former Conservative chancellor of the
exchequer, said: "Hard Brexit went into the rubbish bin tonight."
Although keeping trade with the EU frictionless would entail
the UK making concessions on immigration limits, that too is only likely to be
popular among a farming community which has become reliant on eastern European
labour for the likes of picking strawberries and sorting eggs and potatoes.
Keep it on ice
That is not to say that farmers should crack open the
champagne (or rather shampagne as the UK-produced alternative has become known)
There is a good chance that the UK may face a fresh general
election later this year, if Conservative efforts to form a stable government
fail, a poll which would inject fresh uncertainty.
A Conservative landslide at that poll could put a hard Brexit
back on the table.
Or it could see the election of a Labour Party which many
farmers fear for its history of championing urban, rather than ag, priorities and
which has pledged, for instance, to reinstate farm wage controls, and to entrench
a ban on neonicotinoid insecticides blamed for a collapse in UK rapeseed
Furthermore, the cloud created by the overnight result looks
like hampering investment in agriculture, as in other sectors.
But at least farming has a silver lining to fix on that is
not so evident to some other industries.