Are there opportunities for Irish agriculture post Brexit?
If the level of financial support offered by the UK government to UK farming under the BAP is lower than under the CAP, will this provide the Irish agri-food sector with greater export opportunities?
The magnitude of any opportunity for the Irish agri-food sector will depend on several factors:
- the size of the reduction of direct income support under a future BAP, as compared to the CAP;
- the supply response from UK farmers to reduced levels of decoupled direct payments (i.e. by how much will UK production contract) and;
- the trade policy setting (whether Irish exports to the UK face tariffs and whether other non-EU suppliers faces higher or lower tariff barriers).
A contraction in the indigenous UK supply of agri-food commodities such as beef, sheep meat, butter or cheese might be expected to lead to opportunities for Irish exporters.
However, the competitiveness of Irish exports to the UK market in the future will depend on whether tariffs are applied to EU and non-EU exporters to the UK.
The uncertainty over the shape of both future UK agricultural and UK agri-food trade policy is unlikely to be resolved rapidly. The process of negotiating the UK exit from the EU and of agreeing a new trade agreement with the EU could extend beyond 2020.
This means that the current uncertainty concerning access to Ireland’s most important market in the post-Brexit era will continue.
For the next two years at least, while the UK will certainly remain an EU member, access to the UK market will continue to be unimpeded.
However, the challenge faced by the Irish agri-food sector will prepare it for a world where the UK is not as important or lucrative a market for Irish agri-food exports as it is currently.