EU farm payments could drop by 10pc - Teagasc economist warns
Potential benefits for sheep farmers from taking a slice of the UK's lamb export trade post-Brexit will likely be wiped out by lower subsidies, a Teagasc economist has warned.
Opportunities for lamb sales may rise if the 100,000t of UK sheepmeat exports destined for the EU are hit by penalties and tariffs, the Irish Grassland Association sheep conference heard.
However, any gains may be wiped out by other potential costs, a dip in beef prices and a slashing of EU payments.
Dr Kevin Hanrahan, head of Teagasc's rural economics unit, estimated direct payments to farmers from the EU may fall by as much as 10pc or €130m as the UK has been the second largest net contributor to the European budget.
He told farmers there would be a "hole" in the EU budget, with EU payments a key part of drystock farmers income.
"Almost certainly post-Brexit, the basic payment will get smaller in Ireland," he said. However, he stressed the key negotiators pledged to battle hard for the payments.
Sheep farmers heard a historical relationship between the UK and New Zealand and Australia had influenced the agreements struck to allow sheepmeat from 'Down Under' into the EU tariff-free.
Bord Bia's sheep market analyst Declan Fennell explained a large volume of New Zealand lamb goes to the UK, with the rest going to the EU. "In a post-Brexit era, where does the New Zealand quota end up?" he asked.