What does the proposed US-UK trade deal post-Brexit mean in practice for British farmers and landowners?
CHLORINATED chicken and hormone-fed beef – the media loves a controversial headline, and the proposed US trade deal announced at the end of February gave editors plenty of ammunition.
But there is a lot more to the proposals than that.
And ultimately, the deals that the UK strikes with the US – and, more importantly, the EU – will shape our farming and land market in the years ahead.
So what’s on the cards?
President Trump is after tariff-free access to our market, paving the way for food imports which are currently banned under EU agreements.
Yes – that means chlorine-washed chicken, hormone-treated meat, and genetically modified livestock feed.
But his list of demands doesn’t stop there – the 18-page document makes it clear that UK farming standards should become more aligned to US standards.
Indeed, US Ambassador Woody Johnson wrote in the Telegraph that, for global food security reasons, the world must not follow the EU’s “museum of agriculture” approach and instead use all the scientific and technological tools available to boost production.
However, if the UK were to do this, and abandon EU safety, welfare and environmental rules, this would prohibit exports to the EU, which is arguably a more important trading partner.
We therefore fully support Michael Gove’s commitment to implementing UK standards and phytosanitary controls.
Unfortunately, agriculture is extremely vulnerable in Liam Fox’s trade negotiations, and there is a real risk that the sector will be sacrificed at the altar of a wider US trade deal.
Everybody therefore needs to be very cautious about what will happen to commodity values in the event of a complete change in our trading relationships, both with the US and the EU.
It is probable that our commodity markets will be undermined, so it is important to diversify as much as possible to avoid having all your eggs in one basket.
That relates to agricultural diversification – horn and corn – as well as expanding into different land use income streams altogether.
In the longer term there is likely to be considerable restructuring, as small, weak or over-borrowed farms have to sell up.
The farmland market, which has been stagnant for years, will become much more active; stronger farms will seek to grow, with further interest from outside the sector.
Such a fundamental restructuring has been held back for many years, cushioned by continuing payments via the CAP.
The trade deals which are struck will be a significant driver in what could become an agricultural revolution.
So how can you ensure your business is in the best possible place ahead of such uncertainty?
It’s easy to bury your head in the sand when worried about the future, but that is the worst possible course of action.
Now is the time to undertake a top-to-bottom strategic review.
At Knight Frank we have tremendous experience in helping all types and size of business to embrace new opportunities and overcome challenges.
We can help you to step back and consider family succession, tenant succession, adviser succession.
Look at your debt strategies, liabilities, opportunities and potential for new income streams.
And then we can help you to achieve the required goals.
As an industry, we expect our political masters to fight for a fair deal in all trade negotiations, but as business owners we must prepare for all outcomes.
And fight even harder as individuals to make the most of the years ahead.
Ross Murray is Chairman of Knight Frank Rural Asset Management.
Ross leads teams of rural surveyors providing consultancy services to owners of land and property throughout rural Britain.
Ross is an Estate Trustee, a Chartered Surveyor, and a former President of the CLA.