The viability of many Scottish farm businesses could be put in jeopardy by a no-deal Brexit, according to a new report.
The report, commissioned by the Scottish Governement and carried out by farm consultancy Andersons, warns a no-deal Brexit will be especially damaging to the sheepmeat and barley sectors.
It said the output of these export-reliant sectors will decline if the UK fails to secure a Free Trade Agreement (FTA) with Europe.
The report projects the value of the annual output from the barley sector could reduce by 17.4%, or £47 million, by 2025, and the value of the sheepmeat sector is projected to decline by 35.8%, or £76m, in the same period.
Other sectors are predicted to fare well out of a no-deal Brexit scenario, with the annual output from the wheat, beef and liquid milk sectors predicted to rise by 5.3%, 18.8% and 14.3% respectively by 2025.
The report attributes these rises to the UK’s reliance on imports of beef, dairy and wheat – all of which could be disrupted in a no-deal scenario.
The impact of a no-deal Brexit on farm business income is also explored in the report, which predicts declines of 20.1% and 24.2% for the cereals and Less Favoured Areas cattle and sheep enterpises respectively.
Income on dairy farms and lowland cattle and sheep farms is predicted to rise by 75.7% and 59.2% respectively.
The report said an FTA would minimise the impact of Brexit on the farming sector, and while trade with Europe was important, the UK internal market remained the “most crucial for Scottish producers”.
It concluded: “If there is no trade deal, whilst the results show that there will be positive impacts, these are highly uncertain, and are likely to be eroded by future trade deals.
“Given the negative impacts in sheep and barley, which are much more important in Scotland than the UK generally, the viability of many Scottish farm businesses will be jeopardised under a no-deal. This will have severe ramifications for regions heavily reliant on these sectors.”
Rural Economy Secretary, Fergus Ewing, said: “This report highlights that substantial risks to Scottish agriculture remain in either scenario with future trade agreements, free movement of labour or changes to agri-food standards.
“With less than two weeks until the end of the transition period, we still have no clarity on what Brexit will mean for the people of Scotland.”