Saturday 1 October 2016

Brexit job losses and CAP cuts warning

Fallout hits agri-business and German minister moots CAP budget reduction

darragh mccullough and louise hogan

Published 05/07/2016 | 02:30

Sigmar Gabriel
Sigmar Gabriel

Agri-businesses have warned of potential job losses and falling profits due to the drop in sterling's value since the Brexit referendum. Simon Cross of Kildare-based Cross Agricultural Engineering said he faced making a quarter of his workforce redundant within months if British sales didn't pick up again.

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"We would normally have sold machines at every major show in the UK, but we haven't sold one yet this summer. Our most important customers are dependent on the heavily subsidised renewable energy sector. They just don't know what way things are going to pan out," he said.

However, the FTMTA boss Gary Ryan said it was too early to really say what the full impact will be.

"It all depends on what sort of relationship the UK manages to negotiate for itself post Brexit," Mr Ryan explained.

The debate on the future of subsidies has spread beyond Britain, with Germany's economy minister

 stating that future EU reform will include reductions in CAP payments.

"Brexit could potentially lead to a €1.27bn reduction in the overall CAP budget, which is worth €54bn. Negative soundings from key EU figures at this stage only adds to uncertainty around the future of CAP that 130,000 family farmers across Ireland depend on," said Fianna Fail's agriculture spokesman, Charlie McConalogue.

European Commissioner for Agriculture Phil Hogan also moved to ease concerns on funding for the farm sector. He said that despite uncertainty over long-term spending, the European Commission had proposed a draft EU budget for 2017 worth €134.9bn, with €42.9bn ringfenced for farmers.

Prices

In the UK cattle prices have continued to hold firm, but Irish prices have dropped another 10c/kg to 20c/kg lower than before the Brexit vote.

"There has been no decline in British cattle prices since the UK referendum vote, but from an Irish perspective the weakening in the value of sterling will reduce returns for beef exports into our most important market," says Bord Bia's beef expert Joe Burke.

Mr Burke said that most of the large-scale processors are likely to be hedged against the immediate impact of the currency volatility but will be more exposed to the prevailing exchange rates within four to six weeks.

He advised farmers not to panic in selling prime animals that could do with further grazing, and emphasised the structural issues around Brexit would not happen "overnight" and customers were committed to Irish beef.

IFA president Joe Healy said market access for Irish beef remained unchanged. He added that clear direction was needed for beef farmers on our most important export market at the upcoming Beef Forum.

Indo Farming

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