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Brexit

Brexit effects could show up in US farm economy

Annie Baxter Jun 30, 2016
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 Storm clouds pass over a soybean field near Salem, South Dakota Scott Olson/Getty Images
Brexit

Brexit effects could show up in US farm economy

Annie Baxter Jun 30, 2016
 Storm clouds pass over a soybean field near Salem, South Dakota Scott Olson/Getty Images
HTML EMBED:
COPY

The U.K. vote to leave the European Union is likely to have ramifications for many U.S. businesses, including those in farm country.

U.S. farmers are facing a lot of scrutiny these days over issues like animal welfare and genetically modified crops. Bob Young, chief economist at the American Farm Bureau Federation, said the U.K. has often sided with American farmers on issues like biotechnology. He said the U.K.’s departure from the EU could mean U.S. agriculture producers may face stiffer regulations from the European Commission, the EU’s executive body.

“The U.K. has always been a good moderating voice in the EU,” he said. “U.K. guys are the ones who say, ‘Come on, we’ve got do this.’ Or ‘That’s stupid; let’s get this moved.’”

The European Commission recently extended its authorization of the use of the chemical glyphosate, which U.K. officials supported. Glyphosate’s a pesticide widely used on genetically modified corn and soybeans. Blocking its use could limit U.S. farmers’ and exporters’ access to the European market.

Young said he fears Brexit increases the possibility of a ban.

“If they can decide to ban that, it’s like, ‘Geez, how are you going to farm?’ And who knows what comes next,” he said.

Brexit will also likely present delays in negotiating the Transatlantic Trade and Investment Partnership, or TTIP, which, among other things, would lower tariffs on American agriculture exports to the EU.

Joe Glauber, a research fellow at the International Food Policy Research Institute, said the U.K. has been an important advocate for it.

“And certainly their exit complicates all the TTIP negotiations,” he said. “I don’t see how that helps at all in terms of trying to reach any sort of agreement with the EU.”

But Glauber said the really big question is whether the U.K. Brexit vote is just the first shoe to drop and whether global markets will see more turmoil.

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