Agribusiness magazine

Brexit: a ‘good news: bad news’ story for Irish agriculture?

Richard Halleron looks at the prospects for Irish agriculture post-Brexit.

We won’t know the actual detail of the final Brexit deal until at least October of this year. However, even at this stage, it’s fair to say that whatever trade deal is arrived at will have major implications for the farming industry on this island.

Then there is the not inconsequential matter of how much support will be available to farmers, north and south, once the dust has settled.

Those favouring Brexit in Northern Ireland are keen to project a very positive scenario of the UK moving to a World Trade Organisation (WTO) default tariff position. This, in turn, would see major barriers put up, where all food imports are concerned. Dairy and beef prices would then rise considerably within a scenario which would see farmers in Northern Ireland helping to make up the shortfall in these staple food items that would kick-in across in England, Scotland and Wales.

I don’t buy into this thinking at all. The default position for the UK and the EU-27 is the securing of a free trade agreement between both parties. This may not be achieved by the end of March 2019. However, it is attainable on the back of transition measures which could kick-in on the Brexit date and continue through until 2021.    

In tandem with this, I think that we will see UK supermarkets putting a greater emphasis on producing what they regard as ‘home produced’ food. This could be a very good news story for farming and food in Northern Ireland.

The securing of a free-trade deal with the UK is an absolute priority for the farming industry in the Republic of Ireland. The scale of the beef and dairy exports to Britain alone is immense. Any steps taken to hinder this, specifically the introduction of import tariffs would hole the Irish agri economy below the water line.

It’s encouraging to hear Department of Environment, Food and Rural Affairs (DEFRA) Secretary of State Michael Gove extol the virtues of agriculture as a fundamental pillar of the British economy. He made this point repeatedly at the 2018 Oxford Farming Conference.

He also used the same event to confirm his preference for the retention of the current agri-food trading arrangements for the UK and the Republic of Ireland. All this should have come as good news to the policy makers within the Department of Agriculture, Food and the Marine and the likes of the Irish Farmers’ Association.

But it must never be over-looked that the real arbiters when it comes to trade in food between Britain and the island of Ireland are the UK supermarkets. They have often demonstrated their willingness to upset age-old traditions within Ireland’s livestock sectors when it suits them.

A case in point was their decision not to accept store cattle imports from the Republic of Ireland into the North as being eligible for the Farm Quality Assurance Scheme (FQAS).  Certification under the measure adds an extra £150 per head on to the value of each eligible animal. So, at the stroke of a pen, the UK supermarkets killed-off the cross-border trade in store cattle on the island of Ireland. And this had nothing at all to do with Brexit.

UK retailers have tremendous buying power. Their influence will be crucial when it comes to determining what Irish food lines appear on their shelves post Brexit. Yes, the decisions taken between London and Brussels will set out the framework for the final Brexit trade deal. However the final detail, in terms of how this actually works out will be determined by the supermarkets and their ilk.   

Irish agriculture, north and south, is a very transparent industry in terms of its recorded performance levels. However, one very salient statistic stands out and it’s this: in most years up to 80 per cent of the profit generated by the industry is accounted for by EU subsidies. 

It has been estimated that Brexit will put a 4 billion hole in the EU’s coffers. The UK has been a net contributor to Brussels from the day it joined the EU club. Irish farming needs support moving forward. Under current funding arrangements, the monies available to finance the CAP will be severely constrained in the post-Brexit era. So, will the European Commission consider the option of seeking more money from taxpayers within the EU-27 grouping that will remain in place, once the UK says cheerio?

I doubt it. What might be considered is the option of allowing member state governments to fund a proportion of their own national support measures.

“whatever trade deal is arrived at will have major implications for the farming industry on this island.”

Under such circumstances, Irish tax payers will be asked to pick up the tab, which ensures that their ‘farmer-colleagues’ remain adequately funded. 

Given that Ireland’s health, social services and education sectors are chronically under-funded, it might well be a hard sell for whatever government is in power to push out the boat for Irish agriculture.

It would then be interesting to hear Ireland’s farm leaders debate this issue directly with stakeholders from other sectors, should the day arise.

Meanwhile, for farmers north of the border, it’s a case of London taking over the farm support reins next year. It has already been agreed the current EU support payment structures will be maintained for a two-year transition process. But what happens after that? Across in London environmental Non-Government Organisations (NGOs) seem to be the real drivers of policy formulation at DEFRA.

One of the most encouraging facets to Gove’s speech, given to the Oxford Farming Conference, was his commitment to driving food production standards in the UK upwards, from a sustainability, conservation and environmental protection perspective.

The history books will show that the UK was, primarily, responsible for pushing forward the agenda on environmental protection within the EU over the past 30 years or so.

My understanding is that a free-trade deal between the UK and the EU27 requires the continuing harmonisation of food production standards. So, we could arrive at a situation, by default, where the UK would be driving the food production agenda in the EU well into the future.

This in turn, would be good news for Ireland. Bord Bia’s Origin Green initiative would then have the opportunity to truly reflect the potential of the Irish food sector to deliver on the vison of sustainable intensification. This is a principle that was strongly championed by Simon Coveney during his time as Ireland’s Minister for Agriculture, Food and the Marine.    

Gove is also very keen to profile the link between production agriculture with public health, citing the proven nutritional link to conditions such as cancer and diabetes as verification for this stance. All of this has echoes of the statements made repeatedly by UCD’s Professor Patrick Wall to the effect that farmers are now in the health business, as opposed to being mere producers of food.

All of this is so true. The one missing link is that of ensuring sustainable farmgate prices. However, the need to have a fully transparent food chain has been fully noted by the DEFRA Secretary of State. To this end, Gove has instructed his ministerial colleague George Eustice to get to the bottom of the buying-in policies operated by all the major UK multiples. If this goes the right way the potential benefits to be accrued by farmers in the UK and Ireland could well be significant – irrespective of how Brexit falls into place.

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