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Defra 0
Social Research to understand the impacts of the EU Exit on the UK pesticide supply chain
24821
Defra
Social Research to understand the impacts of EU Exit on the UK pesticide supply chain Final Report
06/08/2019
Defra 1
Social Research to understand the impacts of the EU Exit on the UK pesticide supply chain
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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
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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×tamp=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
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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