Saturday 20 July 2019

Analysis: Plummeting sterling has delivered a double blow to our farm exports

An employee is seen walking over a mosaic of pound sterling symbols set in the floor of the front hall of the Bank of England in London
An employee is seen walking over a mosaic of pound sterling symbols set in the floor of the front hall of the Bank of England in London
Rowena Dwyer

Rowena Dwyer

FOR Irish agriculture and the agri-food sector, the consequence of the decision by the UK to vote to leave the EU is one that we would not have wished to face.

With 40pc of our agri-food exports valued at €4.4bn going to the UK and a shared land border, the implications of the decisions to leave will impact greatly.

However, the issue now is to look forward and tackle the main issues, both immediate and long-term, in order to minimise the disruption, economically and socially.

We must also bear in mind that while the UK is our largest market, the sector has diversified its export markets hugely since entering the EU. From a position where 70pc of agricultural exports went to the UK on our accession to the EU, we now export to over 120 countries.

In an extremely difficult year for farm incomes already, with low product prices across many sectors, the fall in the value of sterling against the euro is a further blow. The value of exports to the UK will be negatively impacted.

It is critical that steps are taken by governments and institutions within the UK and the EU to provide the reassurances that will minimise uncertainty and stabilise exchange rates.

The imposition of barriers to trade, such as tariffs, border checks and health certificates would all add to costs and undermine the competitiveness of our agri-food exports.

The IFA is clear that the Government must bring the issues of concern to Irish agriculture and the agri-food sector to the forefront in the EU-UK negotiations. The top two are:

• Minimisation of any barriers to trade - with continued free movement of agricultural produce between Ireland and the UK

• Early agreement and certainty on the EU and CAP Budget up until 2020 must be a priority.

Other issues that will be of importance in negotiations include:

• Animal Health: Agreement on the maintenance of coherent and comparable standards

• Agreement on straightforward taxation rules for supply of goods and services between the UK and EU, such as VAT on input supplies.

• Specific attention and provision made for cross-border farms, who will be uniquely affected by this change

Negotiations for the UK exit will take place over the coming two years.

Minimising uncertainty and setting out a clear strategy on the next steps must be the Government's priority.

Rowena Dwyer is the chief economist with the Irish Farmers' Association

Irish Independent

Also in Business