EU Referendum

Brexit: a crisis in the making


According to EU law, products of animal origin imported into the EU must be inspected at Border Inspection Posts (BIPs) and products of plant origin at Community Entry Points (CEPs). In practice, these are usually combined in single locations.

This much is known to regular readers of this blog, with the issue being aired as recently as yesterday. But what I've been unable to do so far is put some figures on the table, to assess how our exports to EU Member States will be affected when we have to be inspected under these regimes.

It is perhaps best if we stick to France for the moment, from which we can calculate that, of the £9 billion food & drink exports to the EU each year, probably about £4 billion is routed via that country.

And despite not having any accurate, published information on many lorry-loads that amounts to, I've found a way that we can make a very rough estimate. This is based on a value-to-weight ratio, taking it at about £1.50/kilo, against an average load of 10 tonnes. That gives us about 260,000 truck loads per annum entering the mainland via France.

A proportion of these loads must be inspected, and if we allow about 20 percent (which is the minimum rate permissible, which can go up to 50 percent – or 100 percent for live animals), that amounts to over 50,000 inspections per annum.

In France, these inspections are carried out by the Service d'inspection vétérinaire et phytosanitaire aux frontiers (SIVEP), a national services established in 2009. Being French, they call their BIPs postes d'inspection frontaliers, of PIF for short. Plants and vegetables go through points d'entrée communautaires (PEC).

Now, here's the rub. According to the latest statistics, the entire national service in 2015 inspected 41,137 consignments of products of animal origin, and 38,719 of products of plant origin – about 80,000 in total. The UK inspection requirement would absorb over 60 percent of the entire French throughput in one year.

But it gets worse. Of the two BIP/CEP installations on the northern French coast, with direct ferry links to the UK, Dunkirk can handle 5,000 consignments a year, while le Havre can handle 16-17,000.

In other words, the UK's post-Brexit requirement for inspection would be well in excess of twice the conveniently accessible capacity. And it is extremely unlikely that either post would have any significant spare capacity.

Effectively, to cope with imports of British foods, the French authorities would have build additional capacity equivalent to three times the size of their largest unit, at an approximate cost of £20 million – something along the lines of the Algeciras facility, the largest in Spain. Meanwhile, the inspection service, SIVEP, would have to commit to recruiting and training the 60 additional personnel it would need to run the operation.

As it stands, we are entirely in the hands of the French, who would no doubt gain politically from sitting on their hands and doing nothing. That would certainly be very popular with French farmers who, a couple of years ago were picketing the le Havre BIP, ironically described as "inspections".

And, for the moment, that seems to be precisely what they intend to do. When asked about the issue by a journalist from a UK national newspaper, the French department of agriculture gave a somewhat insouciant response that "as article 50 hasn't been invoked we have plenty of time to adapt the facilities as needs be". This, our journalist friend thought, was: "not entirely reassuring".

Furthermore, this is only French. As much produce again is exported throughout the EU, where a similar level of facilities will have to be found, or new-builds costing up to £20 million will have to be constructed and staffed. This will not only apply to the mainland. Exports to Ireland will also have to be inspected in the appropriate facilities.

However, with Mrs May still failing to offer clarity as to her intentions, it is difficult to see how the continental authorities could do anything other than wait. The exact nature of the investment will depend entirely on the deal negotiated with the EU, so there is no sense in making what would amount to a speculative investment.

Should negotiations fail, and the UK reverts to WTO rules, with no agreement on customs and other cross-border issues, this could catapult UK produce into the "high risk" capacity, decided by formal risk assessment procedures which would load the process because of the lack of any information exchange. The inspections would soar to 120,000 or more – amounting to 50 percent above the current throughput. Even theoretical capacity could be exceeded.

Should the authorities leave any response until agreement has been reached, that could leave a long gap before sufficient capacity was available. It is hard to see how a new-build installation could be completed inside two years and, with planning and commissioning, it could take as long as four years. And then there is the matter of funding. The French might be very reluctant to commit large sums simply to facilitate UK imports.

One possible alternative is for the UK Government to build a BIP facility this side of the Channel, securing European Commission permission for advance inspection. The facility would have to come under EU supervision, and operate to EU rules, possibly with some professional staff from EU Member States. Some of the existing capacity within the EU might be used.

Ongoing operational costs would be financed from inspection charges, levied at between £50 and £350 per inspection – plus any laboratory costs – adding millions to the cost of exporting.

But, for this to work, a decision on a new development would have to be made soon, and there is no indication that this issue has even been recognised for what it is. But there can be no doubt whatsoever that border inspection will become a permanent feature of our relation with the EU – unless Mrs May has a sudden change of heart and decides to keep us in the EEA.

Oddly enough, the one person who may be best placed to advise our Prime Minister on this is Michel Barnier who, as French Minister of Agriculture, had personal experience of BIPs. Above all, he will need to tell Mrs May, in no uncertain terms, that without inspection facilities, there will be no food exports to the EU.

Upon this will depend upwards of £9 billion in exports. This is a sizeable chunk of our trade, and a lifeline to our farmers and food processors. Failing to deal with it would precipitate a crisis in the countryside, its extent going far beyond the monetary value of the lost trade.