We all know - for we’ve all complained about it often enough - that the varied estimations of what Brexit will do to food prices have their flaws. Most obviously, near all of them assume that we’ll charge ourselves tariffs on imports. Some even claiming that we’ll still pay the revenue off to the EU which is a most odd allegation.
We ourselves argue that we should have unilateral free trade. Not because of Brexit but just because we should have unilateral free trade. If Brexit allows that, fine, but the point is the free trade, not whatever governance arrangements make it possible.
We’ve not been aware of any detailed modelling telling us all what the effects upon prices of such unilateral free trade. Fortunately the National Farmers Union comes to our aid:
The Agri-Food and Biosciences Institute looked at a bespoke Free Trade Agreement with the EU (tariff and quota free, with 5% facilitation costs); a switch to World Trade Organisation defaults (8% facilitation costs) and unilateral trade liberalisation (zero tariffs on imports, UK exports face MFN tariffs, 8% facilitation costs).
It model captures the impacts on commodity markets as a result of changes in trade flows with the EU and the rest of the world. The results are presented as changes in farmgate prices, production and output value.
That report is here. The NFU complains that the unilateral free trade option is the worst, for it leads to declines in the prices of all the major outputs of the farming industry. Therefore we should all support the unilateral free trade option as that’s what will reduce the price of what fills our bellies - those outputs of the farming industry.
Beef comes down by 45%, pigs/pork by 12%, poultry by 9%, wheat by 5% and so on. Exactly why the NFU complains and exactly why everyone else should be supporting that unilateral free trade position.
It’s entirely true that 5% off wheat isn’t a sufficient reason for Brexit and opinions differ on the value of the step itself. But we do have to decide what we’re going to do as we do leave. The option that benefits us out here the most is unilateral free trade so unilateral free trade it ought be then.
Or, as we might put it, why make food more expensive than it need be for 65 million people in order to benefit the 55,000 farmer members of the NFU?