ENVIRONMENT Secretary Michael Gove has said a "no deal" Brexit would hit small farms and businesses particularly hard.

He told the Oxford Farming Conference that the turbulence generated by a 'no deal' would be considerable, seeing overall tariff rates of about 11 per cent on agricultural products – and some sectors much more severely affected.

The AHDB’s Horizon report, showed that the UK exports about 15 per cent of its beef production and about a third of lamb. Mr Gove said: "In both cases, about 90 per cent of that export trade goes to the EU. Some of that trade is routed through Rotterdam to other markets beyond the EU but most of it goes to European consumers.

"It’s a grim but inescapable fact that in the event of a no-deal Brexit, the effective tariffs on beef and sheep meat would be above 40 per cent – in some cases well above that.

"While exchange rates might take some of the strain, the costs imposed by new tariffs would undoubtedly exceed any adjustment in the currency markets. And, of course, if the pound does make exports more competitive, it also feeds inflationary pressures at home."

Mr Gove said the EU has pledged to accelerate the process whereby the UK is recognised as a third country so it can continue to export food freely to its markets. However, all products of animal origin would have to go through border inspection posts and, at the moment, the EU has said 100 per cent of them will face sanitary and phytosanitary checks.

He said much of our trade currently reaches European markets through Dover and Calais. "At the moment, there are no border inspection posts at Calais. While we do hope the French take steps to build capacity there, that capacity is unlikely by the end of March to be generous."

The EU has also said that UK hauliers can carry goods to EU markets but cannot make multiple journeys from EU country to EU country – suggesting haulage costs could rise.

"The combination of significant tariffs when none exist now, friction and checks at the border when none exist now and requirements to re-route or pay more for transport when current arrangements are frictionless, will all add to costs for producers," warned Mr Gove.

"As will new labelling requirements, potential delays in the recognition of organic products, potentially reduced labour flows and the need to provide export health certificates for the EU market which are not needed now."

He said Defra was doing everything to mitigate those costs and developing plans to help support the industry in a variety of contingencies. "But nobody can be blithe or blasé about the real impact on food producers of leaving without a deal," he said.

Mr Gove said that was one reason why he wants MPs to support the Prime Minister's deal when it is discussed next week.

"It isn’t perfect – but we should never make 'the perfect' the enemy of the good," he said.

"It not only gives us a 21-month transition period in which current access is completely unaffected, it also allows us to maintain continuous tariff-free and quota-free access to EU markets for our exporters after that, allows us to diverge from EU regulation in many areas after the transition; means that we will leave the Common Agricultural Policy and it also ends all mandatory payments to the EU.

"If Parliament doesn’t back the Prime Minister’s deal all those gains will be put at risk. If we do secure support for the deal, however, then we can forge ahead with further reforms which can put Britain in a world-leading position, not just in food production but also in the wise stewardship of our natural assets."

Responding to Mr Gove's speech, Tim Breitmeyer, president of the Country Land and Business Association (CLA), said: "We agree that a scenario where the UK leaves without arrangements in place for free and frictionless trade with the EU would have major repercussions for farming, food production and the environment

"What farmers, land managers and rural businesses need urgently is a commitment from Government to long-term funding for the policies in the new Agriculture Bill. Profitable farming can go hand in hand with delivering public goods such as enhancing the environment but only through long-term business planning that must be backed by the certainty of multi-annual investment by Government, which should include direct investment in skills and productivity."