Brexit a ‘disaster’ for food sector, says Scottish minister

By Jerome Smail contact

- Last updated on GMT

Scottish minister rues Brexit ‘disaster’ for food sector

Related tags: Supply chain

Brexit has been an ‘almost unmitigated disaster’ for food and drink in Scotland, according to Fergus Ewing, the Scottish government's cabinet secretary for rural economy and tourism.

Speaking at a webinar organised by the Food and Drink Federation (FDF) Scotland ‘A menu for growth – supporting the future success of food and drink’, the SNP minister said: “Food and drink have gone from being important to being the central part of the economy and Brexit has really brought very serious threats. But we have to deal with the situation as it is.”

Ewing insisted the Scottish government is taking measures to relieve the burden on the sector from Brexit and the COVID-19 pandemic.

“We are making, for example, hardship payments to our fishermen that have lost their EU markets because of Brexit bureaucracy,”​ he said. “We're working with FDF Scotland and we announced a £5m recovery plan in November.”

Ewing also paid tribute to the ‘hugely important’ food and drink businesses in Scotland.

“There are actually 122,000 people employed in the sector, 17,000 businesses and turnover £15bn pounds a year,”​ he said. “I do think that the resilience of many food and drink businesses will see them through, but I do worry about the smaller businesses, the artisan businesses that were really starting to flourish and succeed in Scotland,”​ Ewing added.

Funds needed

Ewing called on the UK Government to extend the £23m compensation fund set up for seafood exporters hit by Brexit to enable smaller producers to qualify.

“At the moment they're cut out of the fund altogether despite the fact these Brexit costs have arisen,”​ he said. “I was speaking to fishermen in Orkney, the Hebrides and Shetland and they were saying the costs almost make export uneconomic.”

Ewing also called for the replacement of paper documentation with a digital system to cut bureaucracy and highlighted the problem of seed potatoes, which could no longer be exported to Europe.

“They're banned for no reason at all other than Brexit,”​ he said.

EU intransigence

The concerns were echoed by MSP Jamie Halcro Johnston, the Scottish Conservatives spokesperson for rural economy and tourism. “The EU market is a smaller but still important part of the export market for our seed potatoes,”​ he said. “It's not around quality, it is around intransigence from the EU to some extent.”

However, Halcro Johnston said he was hopeful the situation would be resolved. “I had a meeting with seed potato producers and senior officials a number of months ago about this and I think there is hope that that the situation will be addressed.”

Trade barriers

Liam McArthur, Lib Dem MSP for Orkney, also raised concerns about the added levels of bureaucracy faced by food and drink producers and backed calls for the digitisation of the export system.

“Brexit has given us a pretty clear indication of what happens when you start erecting barriers and obstacles to free movement of trade,”​ said McArthur.

“I think it's going to be tough,” ​he added. “But because we have a sector focused on quality and there is a demand for that, I have every confidence we can emerge from the current difficulties in a reasonably healthy and strong position.”

Increased costs

David Thomson, chief executive of FDF Scotland, said his organisation’s members were concerned that compensation felt like a ‘sticking plaster’. He added while digitisation could help cut paperwork, it wouldn’t remove the added expense of exporting.

“The problem is, in the long term, the new normal is one where there are significantly increased costs as a result of exporting and importing actually through the EU,”​ Thomson said.

Rhodra Grant, Labour MSP for the Highlands and Islands, emphasised further negotiation with the EU was essential. “We need to go back to the EU,”​ she said. “We will be negotiating with the EU for ever more, and that is part of what you do with the other countries that you trade with.”

Grant also suggested a drive to promote shopping locally as a partial solution. “We should try and encourage people and to really have an appreciation for the quality of food we have.”

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