A no-deal Brexit would be catastrophic for livestock auctioneering companies, leading to the closure of marts across Scotland, a new report warns.
The report from the Institute of Auctioneers and Appraisers in Scotland (IAAS) says livestock marts face two major challenges if the UK leaves Europe without a deal next month.
Firstly, it says a decline in sales values would lead to a reduction in income for markets, and throughput would also fall as primary production of sheep and lamb reduced in response to lower prices caused by high tariffs to export lamb abroad.
“The dark clouds that hang above the Scottish agricultural sector caused by Brexit uncertainty have the potential to deliver devastating impact on the entire industry,” said IAAS president Scott Donaldson.
“Urgent action is now required to give some certainty that, whatever the outcome, the right support mechanism will be in place to support the entire sector as we face damaging World Trade Organisation tariffs for our produce.” He said the IAAS had drawn up a blueprint for a UK-wide support scheme to provide support to those who suffer actual losses in the lamb trade as a direct result of a no-deal Brexit.
The proposed scheme would be a top-up system, working to bring the price achieved up to the level that would have been achieved had no-deal Brexit not happened.
“The top-up system would be based on lambs on a fit-for-slaughter basis,” said Mr Donaldson. “They would be graded to provide a range of size and weight specifications that would mean that the stock would be satisfactorily entered into the top-up scheme.”
He said the top-up scheme payment would be based on the difference between the price achieved at sale and a weekly calculation of the average liveweight per kg price over the last three years.
The payment would be made to the seller, with a consequent commission payment being due to the intermediaries on the sale, and it would be subject to a full tag read on every lamb eligible for the scheme to avoid animals being entered in the scheme twice.
