The general industry wisdom in the United Kingdom is that post Brexit, farmers will need to up their game, almost regardless of what sort of deal we end up with the rest of Europe. There will also be some potential effects on the U.S. sector too, with opportunities for more trade to the UK and maybe inward investment from the UK to the U.S. 

Our insight into the horticultural sector suggests that under some possible Brexit scenarios, domestic prices might well rise, and UK producers should take the opportunity to increase production.

The UK market is dominated, in most cases, by sales to the leading supermarkets. It will be those growers who are in groups and organizations closely linked to these supply chains who will be in the best position to prosper. 

As such, there will be a further polarization of the producer base between small, part-time farms and then larger, more commercially driven units of production who are focused on supplying a relatively small number of key supermarket customers. 

UK supermarkets are keen to promote the “Britishness” of the produce they sell, and will continue to provide this support to UK growers, although growers will still need to adhere to well established production and accreditation standards. 

Labor is a key issue for the horticultural sector and will continue to be a major focus.  

Post-Brexit, there are likely to be more controls on the movement of labour in to the UK in some way or other. This could be to the detriment of the horticultural sector.
 
For some of the growing organizations who have developed joint ventures or operations outside of the UK, the solution would be to increase production in these overseas operations. 

This might be especially relevant for commodity varieties and concentrated UK-based production of more niche and higher value varieties. 

The U.S. might become one of the places where UK businesses look to extend their growing operations in an effort to secure new international markets away from the EU.
The UK is already a net importer of fresh produce, and Brexit would only intensify the overall market environment. 

However, it might offer more opportunities for international growers and exporters of products such as apples, grapes, pears and berries depending on new trade agreements with the U.S. and other so-called third countries of supply. 

The U.S. export sector over the past 10 years has been much more focused on markets in Southeast Asia, China, India and Latin America. So, while the UK market post-Brexit might be of more interest, it is difficult to see that the UK will become a major target for them in the very short term.

The real outcome of Brexit might be to see an acceleration of trends we have seen over the past 10 years or so. It promises to be a period of further change for the UK horticultural sector, but for the forward-looking and well-prepared, it will also be a time of opportunity.

John Giles is a divisional director with Promar, and is the current chairman of the Food, Drink & Agriculture Group of the Chartered Institute of Marketing. E-mail him at john.giles@genusplc.com

 

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