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Social Research to understand the impacts of the EU Exit on the UK pesticide supply chain

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Defra

Social Research to understand the impacts of EU Exit on the UK pesticide supply chain Final Report

06/08/2019

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ADAS GENERAL NOTES

Project No.: 24821

Title: Social Research to understand the impacts of EU Exit on the UK pesticide

supply chain

Client: Defra

Date: 6 August 2019

Office: ADAS, 4205 Park Approach, Leeds, LS15 8GB

Status: Final

Author Dr Carla Turner Technical reviewer John Elliott

Date: 06/08/2019 Date: 06/08/2019

Acknowledgement

ADAS would like to thank Ben Shaw for the helpful comments and suggestions in

his peer review of this report.

RSK ADAS Ltd (ADAS) has prepared this report for the sole use of the client, showing reasonable skill and care, for the intended purposes as stated in the agreement under which this work was completed. The report may not be relied upon by any other party without the

express agreement of the client and ADAS. No other warranty, expressed or implied, is made as to the professional advice included in this report.

Where any data supplied by the client or from other sources have been used, it has been assumed that the information is correct. No

responsibility can be accepted by ADAS for inaccuracies in the data supplied by any other party. The conclusions and recommendations in this report are based on the assumption that all relevant information has been supplied by those bodies from whom it was requested.

No part of this report may be copied or duplicated without the express permission of ADAS and the party for whom it was prepared.

Where field investigations have been carried out, these have been restricted to a level of detail required to achieve the stated objectives of the work.

This work has been undertaken in accordance with the quality management system of RSK ADAS Ltd.

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Executive Summary

Background

In light of the outcome of the EU Referendum, negotiations are underway for the UK to exit the European Union although at the time of writing, the date for the EU Exit and the details of policy regimes post EU Exit are still being defined. This research focused on the potential impact of two scenarios:

A No-deal EU Exit, in which the UK would establish an independent standalone PPP regime, with all decision making repatriated from the EU to the UK, all applications for products would be authorised in the UK, and all active substances and MRLs would be considered under the national regime. WTO tariffs would be relevant for trade between the EU and the UK.

EU Exit with a deal, in which there would be a common rulebook for manufactured goods, alongside UK participation in EU agencies that facilitate goods being placed on the EU market, providing for the elimination of tariffs, quotas and routine requirements for rules of origin for goods traded between the UK and the EU.

Plant protection products (also known as pesticides) are important for the UK agricultural

industry as a tool for the control of weeds, diseases and pests. They include herbicides,

fungicides, molluscicides, insecticides and plant growth regulators. Most current legislation

relating to pesticide approval and use is set at EU level and the UK is considering how

national legislation will operate post EU Exit. This research aims to assess the impact of the

EU Exit on the pesticide supply chain to help inform the implementation and communication

of regulatory changes post EU Exit. The project is expected to be completed in two sections,

an initial baseline (pre-EU exit) study and a follow up when the UK has left the EU. This report

focuses only on the baseline research.

Methodology

An overview of the UK Plant protection sector and processes was developed using an ADAS

expert workshop and this informed a semi-structured interview guide to conduct fifty

qualitative interviews with organisations across the pesticide supply chain. The sample was

split into four key stakeholder groups: suppliers (organisations which produce pesticide

products), distributors (organisations who buy and sell pesticide products), users and

advisors. Thematic analysis of the interview data focused on perceived impacts of EU Exit,

current pressures and actions taken in anticipation of EU exit. The interviews also collected

descriptive data on the enterprises and the supply chain, using network mapping.

Results

Participants were given two scenarios (Deal and No Deal) and asked to consider potential

impacts to their enterprises and the wider supply chain. Potential impacts raised included:

• impacts on trade;

• registration of active substances and final products;

• labour supply;

• supply chain relationships;

• secondary and compounded impacts; and

• little or no change.

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Impacts on trade

The majority of participants identified direct impacts to their businesses from potential

changes to trade and registration of active substances, particularly under a No Deal scenario.

Short term disruptions and delays to trade were a concern for the majority of participants

under a No Deal scenario. In response, many of the participants had stockpiled products

and/or raw materials to enable them to trade for two to six weeks, which was approximately

how long they thought the delays could continue for. Limitations on stockpiling included

warehouse space and fire risks associated with storing a large volume of chemicals. Longer

term impacts were less well defined; concerns were raised about the introduction of WTO

tariffs under a No Deal scenario. This was particularly pertinent for large suppliers who trade

raw materials and products across multiple countries within the EU. They expected that

additional costs would be passed onto the user and ultimately the end consumer in the

supply chain. Trade routes were being scrutinised in anticipation of this, especially the

anticipated delays at the Dover border with alternative ports being considered for importing

goods.

Registration of active substances and final products

Some participants felt that changes to the approval and authorisation processes under a No

Deal scenario offered the greatest commercial opportunities. It was perceived that such a

scenario could allow divergence from the actives and products registered in the EU and

potentially offer a competitive advantage for the UK agricultural sector. However, others

were sceptical, noting that trade regulations and supermarket standards might limit the use

of products authorised in the UK but not the EU. In anticipation of changes to registration, a

number of suppliers had changed the member state in which they were registering products.

Labour supply

A lack of available labour in key industries was mentioned by several participants,

particularly for lower skilled roles which are currently filled by European workers (for

example, haulage companies and manufacturing). In large global organisations, where staff

travelled regularly across the EU, limitations on labour movement was a concern. Longer

term, a number of different supplier organisations had considered relocating UK

manufacturing units and regulatory consultants had considered moving experimental sites

due to registration or trade barriers, with potential negative impact on UK jobs.

Supply chain relationships

Relationships within the supply chain were seen as longstanding and unlikely to change. This

was particularly true where organisations were providing a niche service, for example, only

a limited number of organisations could deliver the chemistry needed to produce some of

the active substances. Knowledge exchange was an anticipatory action which was taking

place throughout the supply chain with activities such as: enterprises sharing forecasts and

potential risks with their supply chain and participants attending more conferences and

events to understand the potential impacts of EU Exit.

Secondary and compounded impacts

Participants highlighted several potential secondary impacts that could result from a

combination of primary impacts, such as changes to registration, trade, and additional

labour costs. This includes the potential for the supply of products to decrease in the UK,

particularly for those with a smaller market, such as biological pesticides. Changes to

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available products may have an impact on the price of products or the environment,

dependent on which products are available to the UK market. It was also highlighted that

changes to the pesticide industry were not happening in a silo and changes to CAP, REACH

legislation, plant legislation and potentially the wider economy could lead to other

environmental and economic impacts.

Many participants felt it was difficult to take actions at this point due to the uncertainty

around the post EU Exit regime and a minority of enterprises had made no changes in

anticipation of that. Generally, impact was seen as more limited under a Deal scenario in

comparison to a No Deal scenario. However, for a limited number of organisations little

change was expected under any scenario. Descriptive data is available for comparative

analysis with the follow up research post EU Exit.

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Contents

EXECUTIVE SUMMARY ...................................................................................................... 2

CONTENTS .......................................................................................................................... 5

ACRONYMS ......................................................................................................................... 7

1 INTRODUCTION ............................................................................................................. 8

1.1 Background ............................................................................................................................ 8

1.2 Project approach .................................................................................................................... 9

2 METHODOLOGY .......................................................................................................... 10

2.1 Expert workshop .................................................................................................................. 10

2.2 Qualitative interviews .......................................................................................................... 10

2.2.1 Sample selection ..................................................................................................... 10

2.2.2 Data analysis ............................................................................................................ 11

2.3 Data quality ........................................................................................................................... 11

2.4 Follow up research .............................................................................................................. 12

3 RESULTS ..................................................................................................................... 13

3.1 The sample ........................................................................................................................... 13

3.1.1 Our sample ............................................................................................................... 13

3.1.2 Stakeholders represented ...................................................................................... 13

3.2 Supply chain network mapping ......................................................................................... 15

3.3 Potential Impacts of EU Exit with a Deal / Without a Deal; ........................................... 20

3.3.1 Trade (import and export)....................................................................................... 20

3.3.2 Registration .............................................................................................................. 23

3.3.3 Labour ....................................................................................................................... 28

3.3.4 Supply chain relationships ..................................................................................... 29

3.3.5 User relationships .................................................................................................... 30

3.3.6 Secondary impacts .................................................................................................. 31

3.3.7 No change ................................................................................................................ 33

3.4 Anticipatory ‘Actions’ taken in preparation for EU Exit; ................................................. 33

3.4.1 Stockpiling ................................................................................................................ 35

3.4.2 Registration of active substances and products ................................................. 36

3.4.3 Knowledge sharing .................................................................................................. 37

3.4.4 Trade changes ......................................................................................................... 37

3.4.5 Labour ....................................................................................................................... 37

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3.4.6 No change ................................................................................................................ 37

4 CONCLUSIONS ............................................................................................................ 38

5 APPENDICES ............................................................................................................... 39

5.1 Interview guide ..................................................................................................................... 39

5.2 Consent form ........................................................................................................................ 44

5.3 Coding framework ............................................................................................................... 45

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Acronyms

Acronym table

CRD Chemicals Regulation Division

EC European Commission

EFSA European Food Safety Authority

ECPA European Crop Protection Authority

EU European Union

HSE Health & Safety Executive

MRL Maximum Residue Levels

MS Member State

PPP Plant Protection Products

REACH Registration, Evaluation, Authorisation and Restriction of Chemicals

UK United Kingdom

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1 Introduction

1.1 Background

The UK Plant Protection Product (PPP) industry (also referred to as the pesticide or

agrochemical industry) is engaged in the development and manufacture of plant science

technologies including pesticides (includes herbicides, fungicides, molluscicides, insecticides

and plant growth regulators). PPPs are used for the control of weeds, diseases and pests as

well as to regulate crop growth. There is a trade-off between the socio-economic benefits

of using PPPs with the potential environmental harm that can be caused as a result of their

use.

The PPP industry is associated with divergent supply chains, which focus on different sectors

namely: agriculture/horticulture (including post-harvest use), amenity and garden use. In

terms of volume of PPPs used, agriculture is the largest user but this tends to be at relatively

low rates per hectare. In horticulture, some crops, for example potatoes, are highly reliant

on fungicides or insecticides to ensure that product quality specifications are met and these

use more pesticide on a per hectare basis.

The majority of current legislation around PPPs is set at an EU level, including:

• Directive 2009/128/EC for sustainable use of pesticides,

Regulation 1107/2009/EC Authorisation of Plant Protection Products,

Regulation 396/2005/EC Maximum Residue Levels for pesticides in food,

Regulation 669/2009/EC imported food and pesticide testing by the

commission regulation,

• Directive 2000/60/EC the Water Framework Directive.

Regulation 1185/2009/EC EU Statistics.

The Sustainable Use Directive (2009/128/EC) sets out how PPPs should be used and

managed to limit environmental impact, including training requirements for product sellers

and spray operators. Regulation 1107/2009/EC sets out the process for approving the PPP

active substance at the European level. After the EU approval stage the UK [Chemicals

Regulation Division (CRD) of the Health & Safety Executive (HSE)] authorises the formulated

PPPs for use in the UK.

Upon exit from the EU, the UK will have to consider how it interacts with EU legislation and how it will address the issues in national legislation. It is possible that the UK could change its approach to the legislation around pesticide usage and that has implications for the agriculture, horticulture, amenity and amateur sectors as a whole. This research focused on the potential impact of two scenarios:

A No-deal EU Exit, in which the UK would establish an independent standalone PPP regime, with all decision making repatriated from the EU to the UK, all applications for products would be authorised in the UK, and all active substances and MRLs would be considered under the national regime. WTO tariffs would be relevant for trade between the EU and the UK.

EU Exit with a deal, in which there would be a common rulebook for manufactured goods, alongside UK participation in EU agencies that facilitate goods being placed on the EU market, providing for the elimination of tariffs, quotas and routine requirements for rules of origin for goods traded between the UK and the EU.

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1.2 Project approach

Planned research will consist of two projects: a baseline project (pre EU Exit) and a follow-

up project (post EU Exit). The aims of the research are to:

assess the impact of EU Exit on the operation of a broad range of enterprises

engaged with the pesticides sector; and

inform future strategy for implementation and communication of regulatory

changes that are developed post EU Exit.

This report focuses solely on the baseline research. The research objective for this stage is

to provide detailed information about the ways in which the pesticides regulatory regime

currently affects day to day business relationships and financial planning for organisations

in the PPP supply chain, and to examine expectations of change after EU Exit.

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2 Methodology

2.1 Expert workshop

An internal workshop was held to gather information from ADAS experts covering the PPP

supply chain, PPP usage and PPP regulation. The workshop took place online with a

facilitator leading the experts through key questions to fulfil the following objectives:

1. collecting current knowledge on the PPP industry;

2. gaining an understanding of likely areas of impact from EU exit on different types of

enterprises;

3. developing ideas around the interview guide for the in-depth qualitative interviews;

and

4. developing a list of contacts that could be invited to participate.

2.2 Qualitative interviews

Fifty in-depth interviews were completed face-to-face and each lasted for approximately

one hour. The interviews were guided by experienced social scientists using a semi

structured interview guide. Considering the heterogeneous sample of organisations, the

interview guide was adapted where necessary to best align with the participant. The

interviews focussed on qualitative data collection alongside some descriptive data on the

enterprises. The interview guide was split into three main sections: (1) descriptive

information on the enterprise, (2) mapping of participants’ supply chains (network mapping)

(3) perceived impact of EU Exit. The full interview guide is provided in appendix 5.1. At the

beginning of the interview, consent was requested for different aspects of data capture and

handling, appendix 5.2.

A draft interview guide was signed off by Defra Survey Control Liaison Unit (SCLU), who

provided guidance to ensure the guide minimised the burden on industry, that it would

collect robust data and would comply with the Data Protection Act. Three pilot interviews

took place to test the topic guide and ensure it was fit for use and weekly calls between the

five interviewers were conducted, with the interview guide being updated as necessary

throughout the data collection.

2.2.1 Sample selection

As part of the workshop three key sector categories and four main stakeholder groups were

identified. These were defined as:

Key sectors:

Agriculture: Farming and horticulture crop protection (including post-harvest use);

Amenity: Local authority, contractors, sports grounds/leisure operators; and

Amateur: garden and allotment use.

Stakeholder groups:

Suppliers: The entity creating or importing the formulated product.

Distributors: An entity who trades pesticides but does not use them.

Users: users of pesticides or representatives of the users of pesticides.

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Advisory: Entities providing advice at all stages in the supply chain from regulator to

user.

From this initial categorisation a sample stratification framework was drafted (Table 1).

Table 1 Sample stratification

Organisation category Interviews completed Category Total

Supplier 15 15

Distributer – Agriculture 11

16 Distributer- Amenity 3

Distributer - Amateur 2

User - Agriculture 5

9 User - Amenity 2

User - Amateur 2

Advisory 10 10

Total

50

2.2.2 Data analysis

2.2.2.1 Qualitative data analysis

Interviews were audio recorded and transcribed verbatim. The transcripts were uploaded to

Dedoose qualitative coding software and anonymised using pseudonyms to avoid losing the

connections between organisations. An initial coding framework, presented in appendix 5.3,

was constructed in discussion with the interviewers to highlight the main themes.

Transcripts were then coded and descriptors added on the characteristics of the enterprises

interviewed. Analysis focussed on recurrence of particular views and opinions and the

strength with which they are articulated, to attain a sense of their representativeness and

importance.

Thematic analysis in this report focussed on the perceived impacts of EU Exit and the actions

taken in expectation of EU Exit - referred to as “anticipatory actions” in this report. The

transcripts were not fully coded in anticipation of this being a baseline report with further

analysis possible on the completion of the follow up research.

2.2.2.2 Supply chain mapping

Using the data generated from the interviews within the PPP supply chain and the Network

Maps generated, the process of analysis was by developing Social Network Maps (SNMs).

These graphically map the structure and pattern of organisations in the supply chain. This

‘snapshot’ provides a pre-EU Exit baseline of the PPP network of enterprises and the

patterns of connectivity and ties.

2.3 Data quality

The majority of the data collected was qualitative. Organisations have been very

forthcoming in sharing their perception of the impacts of EU Exit and the actions they had

taken to prepare for that. Most organisations were open to discussions on the enterprise

and supply chain, but commercially sensitive information was redacted from transcripts.

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High level discussions on supply chains have been completed for all organisations as a

minimum. The main limitations to the quality of the data are:

the majority of organisations have not discussed financial information;

a limited number of organisations have not been comfortable/or not had the in-

depth knowledge to fully discuss their related supply chain and specific names of

organisations they work with; and

organisations that considered themselves to be less impacted by EU Exit have

provided less in-depth information on the potential impacts.

2.4 Follow up research

The follow up research is expected to take place after the UK exits the EU. The research will

largely be comparative with the data collected in this baseline report and therefore retaining

engagement with stakeholders will be important. Impacts on businesses are expected to

vary depending on when and how the UK exits the EU. This impact could disengage

stakeholders or lead to temporal or physical limitations to conducting the follow up

research.

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3 Results

3.1 The sample

3.1.1 Our sample

Throughout the report the following colour scheme has been used to describe the

stakeholder categories:

Supplier

Distributor

User

Advisory

Policy

Other1

3.1.2 Stakeholders represented

Fifty interviews were completed and the sample included participants from across the

supply chain, as illustrated in 2. User representative groups were used in place of individual

users to maximise the knowledge captured from the sample size. Three main sectors were

identified as part of the expert workshop: agriculture, amenity and amateur. Suppliers and

advisors generally tended to cut across all sectors, but distributors tended to be sector-

specific. As agriculture is the biggest user of PPPs in the UK, the sample included

proportionately more organisations in the agricultural sector.

1 Including logistics companies, international banks, agricultural media and social media companies.

2 Where organisations fit into more than one stakeholder type, they have been allocated to the category that

best represents them.

15

16

9

10

Sample by stakeholder type

Supplier Distributor User Advisory

11

32

5

22

Sample split by sector

Distributor - Agriculture Distributor- Amenity

Distributor - Amateur User - Agriculture

User - Amenity User - Amateur

Figure 1 Sample stratification by stakeholder type and sector

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The size of organisations interviewed (based on number of employees) is described in Figure 23. There

was substantial divergence between small and micro enterprises and small enterprises (>50

employees) and very large companies with thousands of staff. The larger companies (>250 employees)

tended to be further up the supply chain. This is particularly true for suppliers of pesticides, who have

also gone through a period of consolidation in recent years, with the majority of large suppliers now

owned by a small number of companies. The smaller companies interviewed tended to be regulatory

consultants and those closer to the users, including some local distributors.

3 It is important to recognise the sample was stratified to provide a range of enterprise sizes across stakeholder groups. User representative organisations were interviewed not individual users, which has skewed the representation of the size of “user organisations”.

Figure 2 number of employees of organisations interviewed

2

25

23

Participants' client base

EU UK Worldwide

Figure 3 geography of client base of participants

Number of employees

<10 10-49 50-249 250+

0

5

10

15

20

<10 10-49 50-249 250+

Number of employees by stakeholder group

Supplier Distributor User Advisory

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This research focusses on the UK pesticide supply chain. However, it is important to

recognise that many of the organisations and interactions between organisations operate

on a global scale, with employees and customers in Europe and beyond.

3.2 Supply chain network mapping

The interview included a section on mapping the participants supply chain. Participants

were given a blank piece of A3 paper and asked to draw their current supply chain,

highlighting enterprises they interact with and importantly the relationship between them.

These participants’ maps have been used to form the electronic maps in Figure 4- Figure 7.

In the follow up phase of the research the Network Mapping will be repeated to allow

participants to create a new network diagram of PPP enterprises they connect with and

communicate with, including new and emerging connections resulting from the EU Exit. This

will work to draw out any changes in the network, as mapped in the initial interviews, whilst

allowing the participant to articulate the context of what that connection means, how, why

and through what they are connected, as well as narrate their interpretation of these

relationships (attitudes, perceptions and practices).

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Key

Supplier

Distributor

User

Advisory

Policy

Other This map depicts all of the connections across the sample. The map has been created by connecting all of the

network maps completed with participants. The map shows the true complexity of the supply chain. It is

important also to note that the organisations have drawn their UK supply chain for a single product or active

substance, in reality many of the organisations (particularly suppliers) operate at a global level and with

hundreds of different products.

Figure 4 Detailed map of all connections from the sample

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Key

Supplier

Distributor

User

Advisory Figure 5 Map showing movement of glyphosate

This map depicts the movement of

glyphosate through the supply chain of our

sample. The map was created using all of the

participants who mapped glyphosate as part

of their network mapping exercise.

Pseudonyms have been used.

It shows the movement from a few large

manufacturers to a wider number of

distributors who start to specialise in the

sector for the end use of the product. The

product is then dispersed to many end users.

The middle node “farmers” accounts for

many different farmers; the sample did not

specify the individuals. It also shows an

increase in advisory stakeholders at a user

level.

Glyphosate was seen as particularly

important for both farmers and for the

amenity sector who service the public sector

(railways, highways, parks etc).

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Key

Supplier

Distributor

User

Advisory

Policy

Other

Figure 6 Detailed map of stakeholder groups

This map shows connections between

the detailed stakeholder groups. It better

illustrates the kind of stakeholders

involved in the supply chain and their

connections. The map was used by

grouping the organisations mapped in

the network mapping

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Figure 7 High level stakeholder map

Key

Supplier

Distributor

User

Advisory

Policy

Other

This map depicts the high level

stakeholder groups and their

connections. It shows the flow of

movement of the product from the

supplier to the end user and the wider

web of organisations around the

participants who may not directly handle

the pesticides, but could transfer

knowledge, hold the registration for the

product or influence the end use of the

product.

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3.3 Potential Impacts of EU Exit with a Deal / Without a Deal;

A number of perceived impacts of EU Exit were identified across the supply chain. The main

themes included the following:

• Impact on trade.

• Registration of active substances and final products.

• Labour supply.

• Supply chain relationships.

• Secondary and compounded impacts.

• Little or no change.

This sections describes these responses in more detail.

3.3.1 Trade (import and export)

Among suppliers and some distributors there is a lot of movement and trade of different

components of the final product, including labels, bottles, co-formulants, active substances,

and seeds as well as the final products themselves. Some of this trade is global, but much of

the trade is between EU countries.

“EU is the seed source to UK priming, then UK return to EU. We don’t know whether we are

going to be able to continue to do this pretty much as is. It’s a raw material, it’s not finally

certified, they come here, we make something on it, we send it back to them.”

Quote 1 Distributor on trade

“…around 95% of crop protection products that are used in the UK are actually imported

from somewhere. Some of them are from mainland Europe, others are perhaps coming

from other third countries.”

Quote 2 Trade Association quote on trade

3.3.1.1 Short term trade impacts

Participants were asked to consider impacts under two scenarios, a No Deal scenario and a

Deal scenario4. Under No Deal, short term disruption was seen as inevitable by most. While

there were concerns about how this would impact on the supply chain from all stakeholder

groups, this was particularly emphasised by suppliers. Expectations of the short term

disruption to trade were described as lasting between two weeks and six weeks. In our

4 a) A No-deal EU Exit. UK to establish an independent standalone PPP regime, with all decision making

repatriated from the EU to the UK. All applications for products to be authorised in the UK, and all active

substances and MRLs would be considered under the national regime. WTO tariffs are relevant for trade between

the EU and the UK.

b) EU Exit with a deal. A common rulebook for manufactured goods, alongside UK participation in EU agencies

that facilitate goods being placed on the EU market. The elimination of tariffs, quotas and routine requirements

for rules of origin for goods traded between the UK and the EU.

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sample, there was a tendency for labels, bottles and lids to be imported from outside of the

EU, but co-formulants and actives tended to be produced in the UK or imported from the

EU. In line with this, concerns over disruption were greater when discussing co-formulants,

active substances and the final product. However, it was emphasised that any delay with any

of the raw materials could lead to an overall delay to the final product arriving to the

distributors and ultimately the end users.

“So in the first few weeks we can imagine it’s going to be a nightmare, okay, but after that

we assume that a system will be brought into place."

“[under a no-deal scenario] our big concern, the immediate concern would be disruption at

ports.”

Quote 3 Two different suppliers on short term trade disruption

Regulatory consultants expected less impact from trade disruption. However, some who

were associated with laboratories did import raw materials for testing which could cause

some delay to their research. In contrast, all seed companies expected exacerbated impacts

due to trade changes in the short term as they also traded in plants where additional impacts

were also likely to be felt, principally around plant health legislation. A small minority of

participants felt that there would be minimal impact under a No Deal scenario.

“I think because initially, when we spoke to QAN, they were talking about 14 days’ delay,

which we thought was a little bit over the top. They were saying, it could be this because of

trucks stuck at the border, in and out. But, I think since then, obviously the UK have come

out with the simplified procedures for getting goods in. So, that should negate, or reduce

any sort of impact at the UK border in and out, now that we can do this simplified process.”

Quote 4 Supplier on short term trade disruption

3.3.1.2 Long term trade impacts

Under a No Deal scenario other impacts were identified which were expected to impact over

a longer period of time, including;

changes to import/export countries and to trade routes;

additional costs and administrative burden; and

opportunities.

Changes to import/export countries and to trade routes.

The majority of stakeholders from all categories expected some change to the import/export

countries under a No Deal scenario and generally thought it would have a negative impact.

This change was expected not only to impact on the trade between the UK and the EU, but

also the trade between the UK and countries the EU has trade agreements with on behalf of

its Member States. The changes expected were mostly speculative with many stakeholders

expressing difficulty in better defining how the changes may take place as tariffs and trading

deals were not yet in place. Further participants expressed that it could be many years

before final trade deals are made with some of the countries which are seen as the “big

players” for pesticide and agricultural trade.

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“Certainly tariffs play a role and the different tariffs between the countries. Certainly within

the European market, there are set tariffs, and obviously then with EU exit that still has to

be defined. But there will be certainly different tariffs, which can create advantages or

disadvantages. It’s not possible to say at this time.”

Quote 5 Supplier on impacts of tariffs

Changes to trade routes were more easily identified by participants with many of the

suppliers discussing current trade paths associated with Ireland and identifying that these

would likely be impacted. Trade pathways discussed included traded material going from

the EU via Ireland and on to England. Additionally, some companies have an integrated Irish

and UK team which can mean movement from the EU to the UK and on to Ireland. Under a

No Deal scenario, if tariffs were applied these trade pathways are likely to change. This could

have wider implications including a change to labelling.

“One of the interesting things in the whole Brexit thing is that actually some of the product

that goes from the factories in Europe to the UK then goes to Ireland. We’ve got a bit of a

challenge there that, actually if we’re outside of the EU, we may have to find a different

route to market for the Irish stuff, i.e. not having it transiting through the UK”

“So, we are the UK subsidiary. Because the Irish market is very small and we have a

common language, we have always traditionally looked after the Irish market from here.

Now, if you’re going to say typically, assuming we have a hard Brexit, you will have a tariff

on inorganic chemicals of about 6.5%. So, you would obviously question why would you

bring product in from Israel or Europe, pay the 6.5% to bring it in the UK and then pay

another 6.5% to export it to Ireland?”

Quote 6 Two supplier quotes on changes to trade pathways

Additional costs and administrative burden.

If additional costs were incurred through increasing tariffs or changes in the strength of

sterling the majority of participants felt they “would have no choice but to pass them on to

farmer” and ultimately the consumer. Additionally it was felt farmers would be less

competitive in export markets. A number of stakeholders involved in trade (suppliers and

distributors) highlighted concerns over additional administration, particularly seed

companies, as again they may be impacted by trade changes to pesticides and the

movement of plant material5. The majority of participants stated a preference for a Deal

scenario, particularly one that facilitated minimal tariffs and little disruption at trade

borders. There were concerns under a No Deal scenario that alternative trade deals to

countries of large intensive farming could lead to an influx of cheap food which UK

agriculture would be unable to compete with.

“l think in some ways that’s preferable, especially if that includes not going to WTO tariffs

and changing tariffs and changes to imports and exports and stuff. So, I think that the Deal

scenario where you’ve got a phased transition, and I guess things, for all intents and

5 Such as phytosanitary certificates, certificates of origin, certificates of germination from NTSR

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purposes, will remain pretty similar. From a business point of view, I guess that’s potentially

a benefit.”

Quote 7 Distributor on a deal EU Exit

Opportunities

There was acknowledgement from the large suppliers that they already import from other

countries which have tariffs, so additional tariffs may not have a major impact on them and

may encourage them to look for alternative, more efficient trade pathways. A small number

of stakeholders noted that it may encourage more suppliers to manufacture in the UK.

“Well, we were talking about some of the raw materials, emulsifiers for example. If we

have to pay duty on those coming from the EU, this is going to help the UK manufacturers.

The UK manufacturers might be cheaper”

Quote 8 Supplier on opportunities for future trade

3.3.2 Registration

Several participants discussed or provided drawn illustrations of the current registration

process, particularly regulatory consultants, as their business model was intertwined with

the process, depicted in Figure 8. During this, many of the participants highlighted the

expertise of the CRD and their “pragmatic” approach to the registration of active substances

and products. It was also highlighted that previously the CRD were a preferred rapporteur

member state and well respected within the EU. This was mostly emphasised by suppliers

and regulatory consultants.

“We obviously have CRD in the UK, who are the competent body.”

“CRD are an effective regulator and actually do deliver to the timelines and that’s been well

documented over time.”

“Very much seen at CRD as a leading light in terms of the regulatory process. Our system in

CRD is the most efficient, the most technically-based in Europe”

Quote 9 Different suppliers on the expertise of CRD

Several themes have been identified from the discussion with participants on impacts from

registration changes under the two scenarios (Deal and No Deal). In comparison to trade,

where there was a clear majority who perceived the impacts of a No Deal Brexit being

negative, for registration, participants had a more mixed response and a number of

opportunities were identified. The main themes include:

constraints under a Deal scenario

opportunities under a No Deal scenario

constraints under a No Deal scenario

Participants did not identify registration opportunities under a Deal scenario. Some people

were neutral, thinking it may be the same, but others felt the UK would be constrained by

being under EU legislation without the opportunity to influence decisions.

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Figure 8 (left) Network Mapping of the registration process (right)

registration process of a new active substance from the Board for the

Authorisation of Plant Protection Products and Biocides (Ctgb).

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3.3.2.1 Constraints under a deal scenario

There was some uncertainty across participants on what the detailed registration process

would be post EU-Exit under either scenario. However, the large majority felt a Deal scenario

was deemed as a vulnerable position for the UK, due to having to adhere to EU regulations

without having a role in the decision or setting of them (for at least two years, if not longer).

The CRD was perceived by many as leading a lot of the legislation at an EU level with a

scientific and pragmatic approach. Other member states were perceived as being more

influenced by “green groups” and lobbying organisations. If CRD were no longer part of the

decision making, two impacts were identified:

local information important to the UK may not be imparted by CRD when decisions

are being made.

EU regulation may become more restrictive and there may be fewer pesticides

registered.

“We might lose something because it’s an issue in Europe, but actually, we don’t have that

problem and it’s a really useful product. Influence by that whole political process, looking at

the PPP_006 debate is a good one, if that was driven a lot by European politics and

lobbying that was happening there.”

Quote 10 User influencer on constraints under a No Deal scenario

“The UK would be bound by EU decisions on pesticides and I think that’s really frustrating

because the UK wouldn’t necessarily have a role in deciding that at all. We wouldn’t have a

seat around the table in that decision-making”

Quote 11 Trade association on constraints under a No Deal scenario

3.3.2.2 Opportunities under a no deal scenario

Standalone PPP regime

Participants perceived that one of the largest benefits from a No Deal scenario was having a

standalone PPP regime. This view came from across the supply chain, including from the

users. Having a completely separate PPP regime would allow for divergence in the approach

and process to registering actives, substances and products. Some felt that, under the No

Deal scenario, the UK could take a more risk-based approach in comparison to the hazard

approach of the EU, which could lead to more active substances, pesticide technologies and

products6 being available to UK users and could result in a competitive advantage. However,

it should be noted that the new UK legislation specifies retention of the precautionary

principle in the UK regime, thus maintaining a hazard-based approach.

6 Both novel (including bio pesticides) and existing pesticides were outlined by different participants.

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“The UK is completely cut alone, it's doing its own thing. It will, regulatory-wise, diverge

from the EU. Because that's the advantage of Brexit, to have regulatory divergence to try

and gain a competitive advantage.”

“We will get more pragmatic, more scientific, more balanced decisions in general coming

out of the UK than we currently do out of the European procedure.”

Quote 12 Regulatory consultants on divergent registration

Additionally, it was perceived by the majority that the standalone PPP regime could be more

efficient, with positive comments given about CRD’s efficiency in keeping to timelines, in

comparison with some other member states. However, there was also concern that

increased demands on CRD could lead to bottlenecks if the organisation was insufficiently

resourced.

Currently the EU take a consequential approach (to Maximum residue Level setting (MRLs))

and has to gain agreement from all member states. Some participants felt that no longer

needing to gain such agreement could offer advantages to the UK. Government advice says

that “in the event of no deal the UK will make its own decisions on active substance approvals

and plant protection product authorisations and set Maximum Residue Levels (MRLs) based

on its own assessments” but also makes it clear that “technical standards for setting MRLs

will remain in place and will not be lowered”. 7

“I think it could be better for our industry, because the authority would be able to be

independent from Europe, so they would be able to take their own decisions. Of course,

they would need to set up the right committees and the right scientific evaluation, but I

think there would be more opportunity to look holistically at the evaluations done in the EU

or other jurisdictions and then take decisions.”

“We wouldn’t have that you know under No Deal, and this is what was presented at

Brighton, almost to the farming communities’ delight, we’re going to have our own system.

We’re going to be different from Europe, we’ll have our own authorisation process for

active ingredients and formulations, and we’ll have our own MRLs. So that probably means

we will approve active ingredients that Europe doesn’t, and we will have higher MRLs

because we’re going to be more pragmatic, you know.”

Quote 13 Supplier on standalone PPP regime

Regulatory consultants also outlined an opportunity for their businesses to grow if there was

a standalone registration process as it could lead to more work. The final opportunity that

was highlighted by a couple of suppliers was that under a No Deal scenario all actives

registered will be “frozen” for three years. For some actives this could be longer than their

current re-registration date which would provide a small advantage. The Government’s

rationale is that applicants need to submit data three years in advance of approval expiry,

so would require this amount of time as a minimum if moving to a new regime.8

7 https://www.hse.gov.uk/brexit/regulating-pesticides-no-deal.htm

8 https://www.hse.gov.uk/brexit/regulating-pesticides-no-deal.htm

https://www.hse.gov.uk/brexit/regulating-pesticides-no-deal.htm

https://www.hse.gov.uk/brexit/regulating-pesticides-no-deal.htm

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3.3.2.3 Constraints under a No Deal scenario

Limitation to divergent registration of active substances and/or products

In contrast a substantial number of participants remained sceptical about the extent to

which the UK could diverge from the EU systems due to trade requirements and

supermarket stipulations on growers. A supermarket participant felt that if a no-deal did

take place they would have to work more closely with their suppliers to decrease the

likelihood of food price increases. They did identify the opportunity of divergence under the

no deal scenario considering that different pesticide products may allow for an elongation

of the window for growth of crops in the UK. This may mean they could source more UK

products throughout the year. As supermarkets were not one of the main key stakeholder

groups a further study would be necessary to gain a more detailed representation and

understanding of their views and perceptions.

“It’s either No Deal or we stay, anything in the middle means we’re staying but we just lose

the ability to influence and if we leave, it will be a pyrrhic victory because other forces like

the supermarkets will ignore the fact that we’ve left and pretend we’ve stayed and so

that’s how they will get round it”

Quote 14 Supplier on the influence of supermarkets on pesticide use

“Also as well we’ve got to be conscious about, and I’m thinking about end products, not

chemicals here, but grain, whatever we’re selling, because we have got to be able to export

as well. It’s all very nice setting our own MRL, setting our own agendas on this, but we’ve

then got to realise that we might need to sell this into Europe, and that’s where I know that

currently, there are double standards.”

Quote 15 Distributor on the influence of export markets on pesticide use

The majority of participants highlighted that under a separate regime there would likely be

additional costs (for the registration as well as consultancy costs if regulatory consultants

are used), additional administration and potentially additional experiments to complete

registrations of active substances in the UK. This would be as well as the EU registration

which is likely to still be completed. One participant also highlighted the importance that

animal experiments are not repeated for the standalone UK regime and raised concerns

about the influence a UK company could have on an EU company to encourage them to

share their data.

Impacts on EU registration

The majority of suppliers and regulatory consultants are global organisations and therefore

highlighted concerns for the EU registration process. In line with the participants’ perception

of the CRD and of the CRD completing the majority of the active substance registration as a

preferred rapporteur member state, the loss of the CRD from the EU was seen as significant.

Participants noted concerns about both the removal of knowledge and advice being a loss

to the EU registration process, as well as concerns on efficiency and registration being

completed in an agreed timeframe by other member states.

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3.3.3 Labour

A lack of labour in key industries was mentioned by several participants, particularly for

lower skilled roles which are currently filled by European labour. Areas which were

highlighted included:

horticulture, which has a large reliance on European staff to pick fruit; if this is not

done there could be larger issues with pests;

haulage and logistic companies are heavily reliant on European staff and this is likely

to be impacted; and

factory staff for suppliers manufacturing in the UK.

A small number of participants that operated across the EU highlighted the importance of

movement between countries, with some members of the teams splitting their time

between two EU countries. Short term disruption under a No Deal scenario was also a

concern, but longer term limitations on visa free movement were seen as likely to be an

additional cost and administration burden to organisations in the supply chain.

Longer term, a number of different supplier organisations had considered moving

manufacturing units and regulatory consultants9 had considered moving experimental sites

due to registration or trade barriers, with potential negative impact on UK jobs. One

organisation mentioned moving manufacturing from the UK to a country outside of the EU,

but that was unrelated to the EU Exit.

“Well it comes down to what’s the most straightforward, and what gives you peace of

mind. And if manufacturing has to be arranged in Europe for the European markets

because of trade barriers etcetera, then that’s what will happen. Sadly.”

Quote 16 Distributor on impacts to labour

9 For those who have set up sites in UK to cover certain climatic zones in the EU.

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3.3.4 Supply chain relationships

3.3.4.1 Supplier relationships

Each participant was asked to take part in network mapping to map their current supply

chain. When discussing the potential impacts of Brexit, participants were asked if they

expected any changes to the supply chain they had mapped.

The 15 suppliers who participated in the study tended to be global companies with many

connections, connecting to 14 different types of stakeholder. They supplied the products to

distributors in different sectors as well as directly to some larger users. Suppliers highlighted

more stakeholder categories than any other participant group, often including stakeholders

that wouldn’t traditionally be thought of as part of the pesticide supply chain, for example

international banks and insurance companies. This is likely to be a reflection on their size

and global operations. In our sample, both the regulatory consultants and the suppliers had

good relationships with each other. However, both expressed that they worked for several

of the other type of organisations to decrease risk to their organisation.

Generally it was expected that most of their connections would remain the same, even those

with the EU regulatory bodies, as they were likely to remain working in the UK and more

widely. In particular, there was limited capacity for the raw material manufacturers who

produced the active substance for the product (if manufactured outside of the supplier) to

change, as often the active substance they were producing was only produced by a small

number of organisations. A small minority of stakeholders highlighted concerns about

investment into R and D in the UK post EU Exit.

“It’d certainly have an impact. It wouldn’t change our source because we can’t get it from

anywhere else.”

Quote 17 Supplier on source of active

Key

Supplier

Distributor

User

Advisory

Policy

Other

Figure 9 Current Supplier connections

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3.3.4.2 Distributor relationships

At distributor level, organisations started to be more specific for the end-users. Connections

between distributors and suppliers were based on long standing and trusted relationships,

with distributors commenting on the importance of reliability and effectiveness of the

product being a big driver to maintain relationships. Seed companies had an additional

connection with plant breeders, which may change depending on EU Exit and how the

movement of plant material is affected. There has been some change documented between

distributors and logistics companies, which is outlined further in the Anticipatory Actions

section of this report.

3.3.5 User relationships

Distributors and suppliers distributed to many different users, across agriculture, amenity

and amateur sectors. Interestingly, at this point of the supply chain they mentioned broader

influencers of pesticide use, such as supermarkets and assurance schemes. There were also

more advisory relationships.

Key

Supplier

Distributor

User

Advisory

Policy

Other

Figure 10 Distributor relationships

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3.3.6 Secondary impacts

Participants highlighted several potential secondary impacts, that could result from a

combination of primary impacts, such as changes to registration, trade, and additional

labour costs.

3.3.6.1 Supply of products

Additional costs, experiments and administration leading to a decrease in the supply of

products

Under either scenario, additional cost (due to the standalone PPP regime registration costs,

administration costs and export tariffs) could make suppliers and distributors think more

carefully about how activity in the UK market would be justified. Several participants shared

concerns that this could have an impact on products which are sold in smaller quantities or

on novel products from smaller suppliers. For example, pesticides for amateur use or

vegetables, and bio pesticides, might not be able to justify this additional cost and process.

This could negate the opportunities associated with having a divergent PPP regime from the

EU.

“If they were to say, well, we need this study to get it approved in the UK I think that would

be looked at on an active by active basis as to whether it’s worth it.”

“It might stifle the drive to have greener agrochemicals because if you’ve only got a small

amount of money to fund going into a particular market, you’re going to go into Europe

first. You’re not going to then think there’s a big market in the UK for this because the

amount of investment might be disproportionate.”

Quote 18 Supplier and regulatory consultant on additional costs for a

standalone PPP regime

Several participants stated that if pesticides were to become more expensive or less

available it could encourage users to decrease their use or to try alternative pesticides or

technologies. Dependent on the pesticides or technology chosen, this could have a positive

or detrimental impact on the environment. Examples from participants included the use of

old chemistry that could be detrimental and an overall decrease in pesticide use, seen as

Key

Supplier

Distributor

User

Advisory

Policy

Other Figure 11 User relationships

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positive. Not only were implications on the environment highlighted, but so were the

impacts on crops and the potential for weeds to become more resistant if the number of

products available was decreased.

This thinking is in contrast to that of other participants who indicated that more products

might become available due to the divergence in the UK PPP regime.

“Absolutely. There will be a huge problem a few years down the line because we’ll have so

few tools. And basically if the UK choose not to accept European registrations, we’ll have so

few tools that you’ll have massive persistence issues because you’ll probably only have one

or even two tools.”

“Well, you may find that because of loss of chemistry, you are doing things in a different

way. As I mentioned to you about our trials, we’re regularly looking at things in a different

manner. My agronomists are looking at different aspects of nutritional planning, etc. This is

more where the industry is going, but this will force a number of things through.”

Quote 19 Advisors on change to products available for UK use

The wider agricultural industry

The large majority emphasised that the direct changes to the pesticide industry would not

take place in a silo. Large changes to the agricultural industry are expected post EU Exit,

especially as the industry transitions from the Common Agricultural Policy (CAP) to a national

approach. This does pose a risk to farms in the UK and there were some expectations from

participants that there would be a shift in the number and size of farms “moving into the new

world”. It was considered that farmers will likely need to become more efficient and

commercial, which could impact on the type and amount of pesticide used. Additionally, the

season where the majority of pesticides are sprayed is the spring, which is the same time as

the EU Exit is currently scheduled.

With the increased pressure on farming businesses there was concern over an increase in

illegal pesticides. The Irish border was raised as a possible entry point for cheap or illegal

pesticides not registered in the UK.

“The PPP_009 will go across and there’ll be trouble, and this is at the root of it.”

Quote 20 Supplier on unapproved pesticides

The amenity sector, particularly suppliers to golf courses and managers of recreational areas,

either for public use or for private use, for example, by sports teams were experiencing similar

concerns about the potential use of unapproved pesticides. Participants were concerned that

the financial pressures that this sector already face would become exacerbated by any extra

cost that is passed to the user as a result of an EU Exit increasing the amount of unapproved

pesticide being used.

“The people start to turn to illegal chemical or agricultural chemical, which is much

cheaper. There’s still a big question mark from the amenity industry, to sort of say why?

But yes, I’m sure you would get people just going and buying something that is not amenity

approved, because it’s cheaper than the amenity approved version.”

Quote 21 Distributor on unapproved pesticides

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Changes to REACH

Alongside the wider agriculture supply chain, participants were keen to highlight the

importance of changes to REACH. Many of the co-formulants were registered under REACH

and therefore any changes to this process could have an impact on the final product,

including additional costs or additional delays.

“The co-formulants that we put in our products are also regulated under REACH. So, REACH

is going to have an impact as well on the supply chain, since we have to make sure that all

these other ingredients are registered under UK REACH as well as European REACH after

Brexit.”

Quote 22 Supplier on REACH

3.3.7 No change

Generally it is perceived that impacts under a No Deal EU Exit will be larger than under a

Deal scenario. However, a small minority of participants perceived little or no change under

either EU Exit scenario. Participants who perceived fewer impacts tended to be in the

amenity or amateur sectors or were organisations which traded more outside of the EU.

“I think for our business, whatever happens will have little impact on us because most of

our raw materials come from outside the EU. Most of our sales are outside the EU. So it’s

not going to have a big influence.”

Quote 23 Supplier on limited impacts

3.4 Anticipatory ‘Actions’ taken in preparation for EU Exit;

Several stakeholders across the supply chain shared views on the difficulty of planning due

to a large amount of uncertainty on how the EU Exit will be delivered. However, most of the

stakeholders had taken some action to prepare for the EU Exit to varying degrees (Figure 12

and Figure 13). The most common action was stockpiling.

Anticipatory actions taken

Labour changes Knowledge exchange

Changes to logistics or trade Changes to registration

Stockpiling

Figure 12 Anticipatory actions taken by participants

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Figure 13 Supply chain maps showing if anticipatory actions had been taken.

a

b

c

Key

Supplier

Distributor

User

Advisory

Policy

Other

Key

No action

At least one action

Not in sample

Key

No action

One action

Two actions

Two + actions

Not in sample

C) An illustration of the number of actions taken by the organisations who participated in the research.

A

B

C

This series of maps illustrates if the organisations who participated had taken any actions in anticipation of EU Exit. A) is a detailed map illustrating the organisations mentioned in the network mapping and their sectors.

B) This map shows if an organisation has taken an action in anticipation of EU Exit (red). Organisations in black were not questioned and we therefore do not know if they had or had not taken an action. Only five organisations had not taken some form of action and the majority of those were regulatory consultants. There is no correlation between whether an organisation had taken and action and their size, the number of connections they had or if the organisations they were connected with had taken any actions.

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3.4.1 Stockpiling

Over half the stakeholders mentioned they were doing some sort of stockpiling. This

included the majority of the large suppliers, but also some distributors and users (Figure

14Figure 14 Enterprises ). Interestingly, even regulatory consultants were making sure they

had a sufficient amount of lab consumables in stock. In general, stockpiling was sufficient

for four to six weeks, however, some had stocks to last for up to three months. Stockpiling

was taking place both within the UK and to a smaller extent in the EU (where products were

manufactured in the UK). Farmers were highlighted as key stakeholders who were

stockpiling pesticide for use in the spring, again in relation to the importance of the time of

year when the EU Exit was planned to take place. Amenity distributors were stockpiling some

products, however there was no report of amenity or amateur users stockpiling products.

This morning I’ve organised two farms with chemicals. We’re trying to cover that gap at the

end of March on the basis that no one knows... we know we’re going to want to use the

chemical, taking it two months early is not too much of a hassle. At least then we’ve got it,

and if the docks do seize up in April, it doesn’t matter so much.

Quote 24 Distributor on stockpiling

Key

Supplier

Distributor

User

Advisory

Large Medium Small Micro

Enterprise size

Yes No

Stockpiling

Figure 14 Enterprises who have stockpiled

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Suppliers and distributors highlighted that there were limitations to stockpiling including

warehouse space and health and safety risks. For example, storing too much product or raw

materials could become a fire hazard. Strategies used to overcome these included

investment in additional storage and warehouses, and suppliers working with distributors

and logistics companies to negotiate early deals so product can be stored in their

warehouses, and offering extended credit periods. It was noted by one stakeholder that this

short term planning could delay short term price rises for the initial impact of an EU Exit

under a no deal scenario.

“We’re negotiating deals where they would pay for them at the normal time, say May or

June, just so we can free up room in the distribution company sheds by putting it in our

sheds, so that they can put more stuff into their sheds”

“We took additional warehousing space, more pallet storage than we would normally

require and reserved it because the logistics provide”

Quote 25 Suppliers on warehousing

3.4.2 Registration of active substances and products

The largest change to registration mentioned by participants was changing the countries

they registered products in. The majority of suppliers reported currently submitting dossiers

to the UK as a separate process to its usual process for EU registration, which is usually

defined by different climatic zones. This implies that the number of registrations has

increased potentially increasing the workload for regulatory consultants.

“For example Europe, the 28 countries are split into three zones for regulatory purposes, and

we’ve been submitting a dossier in the three zones. But now we have to consider the UK as a

fourth zone, and we need to make a separate application.”

Quote 26 Supplier on additional registration submissions to the UK

In contrast several regulatory consultants felt that currently they were experiencing a

decrease in workload, particularly for registering actives in the UK, as they felt suppliers were

waiting to get some more certainty about EU Exit. One consultant highlighted a particular

recent incident where they had lost a piece of work they would usually win and when asking

for feedback were told the customer had gone for an EU regulatory consultant in light of the

risk around the uncertainty on how the EU Exit could impact. The regulatory consultants also

emphasised that, in light of the UKs decision to leave the EU, registrations where England

were the member state rapporteur have been removed and given to other countries.

Considering the positive light CRD were seen in, this was seen as a negative both for timing

and for getting the best scientific decision.

“Even to the extent where the UK might have started assessing the dossier at the point the

referendum was done, and if the UK wasn’t able to complete before the Brexit date they’ve

asked clients to go and place their dossiers somewhere else, take the work away from CRD,

which I think is bloody-mindedness on the behalf of the EU, to be honest, but I’m not

surprised they’ve taken that.”

Quote 27 Regulatory consultant on removal of registrations from CRD

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3.4.3 Knowledge sharing

A key action that has taken place across the majority of suppliers, regulatory consultants,

trade associations and user associations and distributors is the sharing of knowledge. This

includes:

Brexit forecasting and sharing the results and questioning points of the supply chain

that may be affected, for example sharing information on REACH to the raw material

supply chain.

Becoming part of Brexit taskforces to share up to date information.

Responding to government consultations.

Attending more conferences and meetings to keep up to date with changes.

Attending more conferences in the EU to stay relevant to their market and remain a

trusted business.

Sharing alternative methods to pesticides.

Organisations have been sharing knowledge across the supply chain to make people

aware of potential impacts of the EU Exit.

3.4.4 Trade changes

Participants reported spending time on understanding their supply chain, particularly

around trade, and highlighting any risks and mitigation. No changes had so far been made,

but there was some speculation around changing trade routes where the products went via

the UK to an alternative EU country.

“The Dover Calais route is going to be very congested, so they’re looking at options to bring

it in up at XXX and other routes that’ll be less congested. So, there’s a practical issue

around just the sheer movement before we get onto the economic impact.”

Quote 28 Supplier on trade routes

Some suppliers and distributors had changed their logistics company or applied for trusted

importer status to help mitigate any potential short-term issues with trade.

3.4.5 Labour

Changes to the labour force had been minimal so far although there was a mention of an

extra member of staff in some organisations specifically hired to understand the impacts of

the EU Exit and strategies on how to best mitigate these. Additionally, travel around the time

of Brexit to the EU has been limited with some organisations putting an official travel

embargo in place two weeks before and after the expected EU Exit date.

3.4.6 No change

A small number of organisations, particularly those further down the supply chain, had made

no changes to their business.

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4 Conclusions

This project set out to assess the impacts of the EU Exit on the broad range of enterprises

engaged with the UK pesticides supply chain and to help inform future strategy for policy

post EU Exit. Through the completion of fifty qualitative interviews with the industry a

number of potential impacts have been highlighted. Direct impacts focussed on impacts on

trade (including availability of imports), registration and EU labour, whilst secondary impacts

were highlighted which either discussed the compounded impact of the direct impacts or

the impact of other policy changes not directly linked to pesticides, for example the removal

of the CAP.

Trade was the largest talking point for many of the participants, particularly those from

supplier or distributor organisations. Impacts on trade were categorised into those which

had a short term impact which was perceived as particularly likely under a no deal scenario

and those which could have a longer term impact. The majority of participants felt a no deal

scenario would have a negative impact on their organisation in terms of trade, with

additional costs and administration expected under WTO tariffs. In contrast, many of the

participants highlighted opportunities under a no deal scenario for a standalone UK PPP

regime as it was perceived this could offer the UK divergence in products registered and a

competitive advantage. This opportunity was related to opinions about the CRD being a

trusted, pragmatic and scientific regulatory body. However, others felt the use of products

registered in the UK and not the EU could be limited by standards set by supermarkets or

trade restrictions where goods were destined for export.

Relationships between the supply chains were seen by most as longstanding and trusted

with little change expected. This was especially true for organisations which offered a niche

service or product that not many others offered, for example a particular lab technique, or

the production of a specific active.

Several stakeholders across the supply chain shared views on the difficulty of planning due

to a large amount of uncertainty around how EU Exit would be delivered. However, some

form of anticipatory action in preparation for an EU Exit had taken place in nearly all of the

organisations we interviewed. These actions varied in the time resources used, financial

input and geography. Stockpiling was one of the main actions taken, particularly for

organisations further up the supply chain. Knowledge sharing was also an important action

noted by many of the participants. Knowledge sharing was broad and included forecasting,

sharing knowledge within organisations and potential impacts as well as sharing knowledge

across the supply chain.

This project has highlighted a number of potential impacts and anticipatory actions already

taken by the industry. It has also collected a lot of qualitative descriptive data on the current

supply chain and the interactions between the organisations. This data is available for

further mining and, importantly, as a baseline for comparative analysis after the completion

of follow-up research post EU-Exit.

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5 Appendices

5.1 Interview guide

Interviewer general guidance

Interviewee Number:

Interviewer

Date of interview

Time of interview

Instructions for the interviewer are italicized and in blue. Questions numbered and prompts

alphabetised.

Interviewees are split into supplier, distributor and user. This is at the start of the interviewee number.

Some questions in section 1 are only relevant to specific groups, indicated in blue before the question.

Please start the interview by reading the text below.

Defra have commissioned us, ADAS, to undertake research aimed at understanding the impact of EU

Exit on the pesticide supply chain. There are two parts of this research, this initial stage and a follow

up post EU Exit. Thank you for agreeing to be part of this research and for agreeing in principle to be

part of the follow up work. For data protection reasons I would now like you to read through this

consent form and initial the boxes if you are happy with the associated statements.

Give the interviewee the consent form with enough time to read and signature. Questions 1-4 are

compulsory and if the interviewee does not agree with them DO NOT proceed with the interview.

The discussion today will take no longer than one hour and will focus on mapping your supply chain

and the potential impacts of the EU Exit to your organisation or organisations that you represent.

There are three main parts to the interview which are:

Information about your organisation,

Supply chain mapping, and

Potential impacts of the EU Exit.

Your participation in this interview is voluntary. If there are any questions you prefer not to answer,

please just let me know.

As part of the interviews, we would like to collect some financial information. We will not publish this

information and you will be asked whether you consent for us to share it with Defra for inclusion in

their economic models. If you prefer not to share information about your individual business, we will

present figures in an aggregate form. However, if you prefer not to provide it or you do not have such

information available, please just let me know.

In order that we can capture the full detail of what you tell us today, we would like to ask your

permission to record the discussion. The recording will be stored securely at ADAS, transcribed and

anonymized to remove any details that could identify you or your organisation. It is expected that the

anonymised transcript will be shared with Defra at the end of the research project, however, we will

share the transcript with you to allow you to indicate anything that you do not want us to share with

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Defra. The recording will be deleted once these notes have been agreed. Are you happy for the

discussion to be audio-recorded today?

If permission given, ask if it is OK to turn on the recorder. [State for the recording the date, interviewee

name and enterprise, interviewer no.]

If permission not given or for researchers without recording equipment:

With your permission, we will take written notes of our discussion today and will share our summary

with you so that you can suggest amendments if needed and indicate anything that you do not want

us to share. Check participant is happy for discussion to start.

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Enterprise information

1. Please could you tell me about your organisation?

a. Area of work undertaken

b. Location

c. Structure

2. Can you tell me about your job role in the organisation?

a. Main responsibilities

3. Are you aware of how many employees there [represented] are in your organisation?

a. Number

b. Type

c. Location (UK, EU, other)

4. Can you tell me the main pesticides your organisation works with?

[Please go through the list of prompts for each product mentioned, maximum top 5]

a. Name of product(s)

b. Type of product (fungicide, herbicide etc.)

c. Important properties of the product

d. Interaction with registration approvals for the product

e. [distributer, user only] Reason the product is chosen

f. [Suppliers only] raw material inputs

5. What actions do you currently take to comply with environmental/health regulations?

[Questions 6-9 are for suppliers and distributers only]

6. What is the proportion of company’s products [produced/ purchased] in the UK that are

currently sold in UK?

7. What is the proportion of company’s products [produced/ purchased] in the UK that are

currently sold in the EU? a. EU countries where exports go

8. Proportion of company’s products [produced/ purchased] in the UK that are currently sold

outside of the EU? a. Countries outside EU/UK where exports go

9. To which extent do the following factors help determine your choice of export markets (for each one that is relevant, collect details of countries where the factor provides a barrier to export):

a. tariffs, b. origin rules, c. customs processes d. any other factors (probe for details)

Supply chain mapping

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[Please share the high level supply chain map and give the following explanation]

In this section we would like YOU to develop this diagram and make it specific to your organisation. In

order to do this we would like to focus on a single ‘product’ from creation to use. [the ‘nodes’ should

be the entities – people, departments, business, ‘products’, whilst the ‘links’ should trace the ties or

journey of the product. Feel free to use different colours to highlight different aspects, but do not black

or red at this stage.]

1. Which product would be best to map? [most important product to the company, or most

representative]

2. Start by thinking about the ‘life’ of the product

a. How does it come into the enterprise; what department does it come into?

b. What are the elements of the product and their sources (where are they coming

from)?

c. Where or how does it move through your enterprise?

d. At what point does it move out, and where does it go?

e. Who are the imagined/target users?

f. Where does your department fit in?

g. Where does your job role fit in?

h. Who are you in regular contact with and why (in relation to the product)?

[Allow participants to draw out the network; whilst the do this prompt to draw what they are talking

about/ talk about what they are drawing]

3. Specifically, can you tell me [ for each actor/node in the supply chain]

a. Names of relevant Companies/ agencies, departments and names of contacts

b. Location (UK/EU/Other)

c. Nature & longevity of the relationship (any recent changes)

[Where relevant]

d. Relationship with the approval of the active substance/ product.

e. How are goods transported currently?

f. Cost of transport.

g. Cost of inputs.

h. Cost of tariffs and taxes.

i. How much is bought in/ stored/ distributed/ sold

4. How does the supply chain we mapped compare to the supply chains of other products you

[produce/distribute/use]?

Potential impacts of Brexit

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As you are aware negotiations and decisions on policy post EU Exit are ongoing and therefore we

would like to get your view on potential impacts of a couple of options.

a) A No-deal EU Exit. UK to establish an independent standalone PPP regime, with all

decision making repatriated from the EU to the UK. All applications for products to be

authorised in the UK, and all active substances and MRLs would be considered under the

national regime. WTO tariffs are relevant for trade between the EU and the UK.

b) EU Exit with a deal. A common rulebook for manufactured goods, alongside UK

participation in EU agencies that facilitate goods being placed on the EU market. The

elimination of tariffs, quotas and routine requirements for rules of origin for goods traded

between the UK and the EU.

1. What do you expect the impacts of the EU Exit to be on the supply chain we have just talked

through (including cost where appropriate)?

[Please note changes in Black for no-deal EU Exit / Red for Deal EU Exit on the map already drawn for

anticipating what might change and why]

a. Choice of source of product.

b. Choice of country for imports.

c. Choice of country for exports.

d. Changes to registration.

e. Changes to the relationships/links between enterprises.

f. Constraints with changes to the supply chain.

g. Opportunities of changes in the supply chain.

h. Any other impacts

2. Have you made any changes in anticipation of the potential impacts of the EU Exit?

a. What?

b. Why?

c. To your enterprise

d. [users] crop selection

e. Complying with regulation

f. Environmental health

g. Human health

3. Is there anything else you think it is important for us to consider as part of our research?

Thank you for your time today. The audio recording/notes taken today will be transcribed and I will

send you over that transcript to be signed off before sharing it with Defra. It is expected that a high

level report will be published about this research, with a more full publication after the follow up

research has been completed. Would you like to be kept on the mailing list for these publications?

[Tick below]

Yes No

Finally, would you be happy for one of the project administrators to contact you regarding

possible participants that have emerged from the supply chain you have talked about to

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5.2 Consent form

Survey of PPP enterprises to understand the impact of the EU exit on the pesticide supply

chain

Please

initial

box

1. I consent to take part in the above study. I understand that my participation is voluntary

and that I am free to withdraw at any time without giving any reason, without my rights

being affected.

2. I consent for ADAS to keep my contact details on file until 31 December 2021 for the

purposes of administering this research. More details of the way that this information will

be treated is included in the project privacy notice, here:

http://www.adas.uk/Portals/0/Documents/Privacy%20Notice%20GDPR%20DEFRA%20

2019.pdf?ver=2019-01-14-161320-280&timestamp=1547482434456

3. I consent for ADAS to share my contact details with Defra for the purposes of organising

follow-up research.

4. I consent for the interview to be audio-recorded (recordings will be securely stored

sercurely by ADAS in digital format and deleted 12 months after the completion of the

project)

5. ‘I consent for the anonymised transcript/written notes of my interview to be shared with

Defra.

6. I understand that a report on the research may be published but that this report will not

include any information that could identify me or my company, or any figures provided

by research participants that are seen as commercially sensitive.

Participant Name: Date: Signature:

ADAS Researcher: Date: Signature:

If you wish to contact ADAS, Project Lead Dr Carla Turner can be reached at:

Dr Carla Turner

Senior Policy Consultant (ADAS)

24281 Project Manager

Email: XXXXX

Phone: XXXXX

Post: XXXXX

If you have any concerns about the conduct of this research you can also contact the Defra project

manager: XXXXX

Email: XXXXX

mailto:[email protected]





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Phone: XXXXX

5.3 Coding framework

An a priori coding framework has been created. These are the initial codes that will be used

when coding transcripts, however, it is expected that additional codes will be made in addition

where new themes are identified.

Table 2 initial coding framework

Thematic Coding

Potential Impact - EU Exit with a Deal

Supply Chain

Import/Export Agreements/ Tariffs/ Trade

Registration

Product

Active Substance/Chemical

Environment, Human, Animal Health

No change

Potential Impact - EU Exit without a Deal

Supply Chain

Import/Export Agreements/ Tariffs/ Trade

Registration

Product

Active Substance/Chemical

Environment, Human, Animal Health

Anticipatory Actions Taken in Preparation

Stockpile EU

Stockpile UK

No change

Registrations

New Alliances/ Taskforce Membership

Internal Reorganisation

Sub Cat.

Process

People Additional/ Less / Relocation

Roles

Infrastructure Inc. Location
