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<p>The government recognises the particular concerns of our UK sheep farmers and is
determined to support them as we leave the EU. The UK is one of the largest producers
of sheep in the world and by far the largest exporter of sheepmeat in the EU.</p><p>
</p><p>Tariffs on trade are ultimately a tax on consumers, and economic modelling
shows that if the EU were to apply the full Most Favoured Nation (MFN) tariff on the
sheep sector, lamb prices in the EU are likely to rise. This may dampen demand in
the EU resulting in more lamb seeking a market in the UK. Other leading producers
like New Zealand may also retreat from the UK market and focus instead on the European
market.</p><p><br> Analysis by the NFU suggests that the total cost to the sheep industry
in year one under a no deal scenario would be approximately £150 million. Defra is
designing contingency plans to ensure that we have the option to provide income support
to farmers in the aftermath of a ‘no deal’ exit to mitigate this effect.</p>
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