Tuesday 22 August 2017

Brexit cost to beef, dairy sector 'up to €1.2bn'

The briefing notes that 50pc of beef and more than a third of dairy exports go to the UK market including 80pc of the cheddar cheese imported by Britain. Stock Image: PA
The briefing notes that 50pc of beef and more than a third of dairy exports go to the UK market including 80pc of the cheddar cheese imported by Britain. Stock Image: PA

Cormac McQuinn and Claire McCormack

The beef and dairy industries face combined costs of almost €1.2bn in the event of a 'hard' Brexit, Department of Agriculture officials have warned.

The stark estimate is contained in briefing documents prepared for the Department's ministers which summarises the challenges of Brexit and efforts to counter the risks it poses.

Officials state that the agri-food sector is "of critical importance" our economy and how 39pc of exports - worth €4.8bn - went to the UK in 2016.

The briefing notes that 50pc of beef and more than a third of dairy exports go to the UK market including 80pc of the cheddar cheese imported by Britain.

Officials listed potential tariffs on trade among long-term challenges posed by Brexit and say that estimated World Trade Organisation (WTO) tariff rates for beef and dairy exports at 61pc and 52pc respectively.

WTO rates would apply if Britain left the EU without a trade deal or transition arrangements in place, one possible 'hard' Brexit scenario.

If WTO rates came into effect there could be "an estimated cost to those sectors of €687m [beef] and €502m [dairy]", the document states.

"These difficulties would be compounded by the increased cost associated with the implementation of border controls, particularly if there is a divergence from EU regulations and standards in the UK after Brexit," the officials add.

They also highlight the dependency of the mushroom and forestry industries on the UK market with around 90pc of exports by value going there.

Read More: Fishing industry fears UK will 'play hardball'

The briefing material lists Ireland's key 'asks' from Brexit talks as including "continued free access to the UK market, without tariffs and with minimal additional customs and administrative procedures".

In terms of the general response to Brexit the document outlines "steps taken to date" including the establishment of a dedicated unit in the Department to coordinate all activities and increased engagement between Agricultue Minister Michael Creed (pictured) and his British and European counterparts.

Mr Creed has met with the chief executives of major UK retailers, like Tesco, Sainsburys and ASDA.

The document outlines increased funding for Bord Bia and how additional resources have been allocated to the department's market access activities "in order to further improve Ireland's agri-food footprint globally".

The department is said to be active in developing new business opportunities in non-EU countries, including the United States, Mexico and Saudi Arabia.

The briefing documents were prepared in case Taoiseach Leo Varadkar changed the ministerial team at the department as part of his reshuffle upon assuming office last month.

Mr Varadkar left both Mr Creed and the department's junior minister Andrew Doyle in their roles.

Separately, an emergency fund worth an estimated €1.5m is set to open for tillage farmers in the west hit by poor weather during last year's harvest.

The 'Crop Loss Compensation' scheme, expected to be launched in the coming weeks, will make a maximum of €5,000 available to up to 300 private tillage farmers.

A spokesperson for the Department of Agriculture confirmed the new scheme but said it will only support private tillage farmers whose damaged crops had no commercial value and where upwards of 30pc "verified crop loss" volume occurred.

"This was a challenging scheme to put tougher in terms of quantifying and verifying dreadful losses to farmers"

"It will be a maximum payment of €5,000 per applicant with a ceiling of €200 per hectare. It will be limited to a max area of 25 hectares per applicant," said the spokesperson.

IFA President Joe Healy welcomed the announcement.

"The IFA has fought hard for farmers that were very badly affected. The losses threatened livelihoods. What's important now is that the final details are published without delay," he said.

Irish Independent

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