Realist, not conformist analysis of the latest financial, business and political news

Organic Food Exports

Thanks for all the fish, obviously

From our Swindon Correspondent:

From Inews

Organic farmers could find themselves with stockpiles of milk, vegetables and meat they can’t sell to the EU if the UK is heading for a no-deal Brexit.

With the negotiations for a free trade deal between the UK and EU in disarray, 30 organic trade bodies have written to the UK’s negotiators urging them to strike a separate deal with Brussels to allow trade in organic goods to continue even if there is no agreement.

Stockpiles? Can’t they just sell it to Tesco? Create a veg box service on the internet?
The UK exports around £225m of organic produce to the EU each year, including organic milk, beef, lamb, vegetables and cereals. Roger Kerr, chairman of the UK Organic Certifiers Group, warned failure to agree equivalency would leave organic farmers facing a financial headache.

“If you have an organic product that is recognized as organic in the UK, but not recognized as organic in the EU, then you might have to have two sets of labels,” he told i. “That increases costs, it increases complexity, and you’re losing margin.”

OK, £225m, but what’s this actually worth? I’m even surprised there’s much trade in any food from the UK to EU. They can produce beef and cheese in Normandy, and grow tomatoes all over. It doesn’t make a whole lot of sense for Carrefour to get generic products like milk or vegetables shipped from the UK to me, when they can get it locally. It’s not a specialist product like Aston Martins or designing RISC processors. If there’s a competitive edge over the French, it isn’t going to be worth much.

And, they can sell the same products here. Maybe someone sells his organic Welsh lamb to a Parisian restaurant, but that’s because, including all costs, it’s more than a London one will pay. The margin could be very small.

In general, getting that margin is a Very Good Thing. But this isn’t a free ride. The EU wants a chunk of the UK to stay in the EU following the rules in exchange for that and that’s a cost. Effectively, it can become a subsidy from another load of people to the organic farmers.
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3 years ago

Two sets of labels? My loaf of bread already has *one* label with a dozen or so different compliance logos. You just retool your labeller next time you’re retooling your labeller.

Michael van der Riet
Michael van der Riet
3 years ago
Reply to  jgh

Abba so lutely. Everyone already has kosher and halaal stickers on their products and adding one more can’t be a major ballache.

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