IT is official – New Zealand farmers will benefit under the new trade deal with the UK, while the UK's farmers will be 'negatively impacted'.

That is the verdict of AHDB, which has conducted 'in-depth analysis' of the workings of the NZ agricultural industry, and its existing export profile.

As a levy-funded quango already under some pressure over its own existence, AHDB has tended towards being a cheerleader for the UK government's post-Brexit trade deals, regularly hailing them as positive for the domestic industry, particularly in relation to Third Country access for our pork exports. However, its examination of the facts of the NZ deal was unequivocally that it is bad news for British sheep farmers.

There was also a warning to take note of in an uncertain world – if NZ's current trading relationship with China was to falter, perhaps as a result of rising tensions with the West over Taiwan, then there could very abruptly be a huge increase in the amount of lamb shipped into the UK market.

The NZ trade agreement is the second major Free Trade Agreement to be agreed post-EU exit after the one signed with Australia in 2021 – both major agricultural exporting nations. AHDB’s analysis – aimed at farmers, growers, policy makers, supply chain businesses and other agri-food stakeholders – looks at key products traded between the UK and NZ and the impact of the new FTA on the UK and other major players.

AHDB's head of Strategic Insight, David Swales, said: “The New Zealand FTA represents another deal for the UK with a major agricultural exporting nation. Inevitably, these deals prompt debate in the industry with farmers wondering whether this presents yet another headache in the form of cheap imports to the UK market.

“With this very much in mind, we at AHDB have again taken a deep dive into the intricacies of the deal and produced evidence-based analysis of just what the opportunities and risks are for the agri-food sector.

“It’s clear that New Zealand farmers will benefit from this trade deal with UK farmers negatively impacted. Our analysis shows that the impact should be modest, but there are risks of a more substantive impact in scenarios where New Zealand’s trade with China is disrupted.”

For lamb, AHDB expects NZ to increase its UK exports by diverting some of its existing exports – notably from China – coupled with a small increase in production. A reduction of the current level of non-tariff barriers, in both directions will lead to reduced costs for NZ exporters supplying the UK market. If China banned NZ lamb imports, NZ lamb exports to the UK would increase by 29,000 tonnes (69%).

The prospects are not so worrying for beef – NZ would have to increase output and reduce the amount exported to the EU and the US in order to send more to the UK. But if China banned NZ beef imports, its exports to the UK would increase by 7000 tonnes (830%).

Mr Swales added: “While FTAs create opportunities by lowering barriers to trade, it’s important to remember they don’t immediately create new demand or supply. While our analysis does highlight that the benefits to NZ farmers will far outweigh those for UK farmers, it’s important to remember implementation of FTAs takes time. As a result it is unlikely NZ red meat, for example, will start to flood UK supermarket shelves.”