Farm Ireland
Independent.ie

Monday 20 November 2017

'Exceptional support needed to ward off job losses in agri-food sector due to hard Brexit'

Pic Getty Images.
Pic Getty Images.
Ciaran Moran

Ciaran Moran

The increased likelihood of a hard and disruptive Brexit, and a fracture of the single market demands a series of exceptions from EU state aid rules for the Irish agri-food and drink sector, according to Food and Drink Industry Ireland (FDII), the Ibec group.

In a new report, which set outs the case for exceptional support, FDII called on the Government and the European Commission to put in place a comprehensive package to protect viable businesses and jobs during a potentially fraught Brexit process.

FDII Director Paul Kelly said the Irish agri-food and drink sector is 'uniquely exposed' and said there is a compelling case for exceptional state aid support to minimise the economic fallout and job losses.

“Already the currency squeeze is putting intense strain on exporters.

“This pressure is likely to intensify as the challenges and economic costs of a hard Brexit crystalise.

“The hardening of EU and UK negotiating positions mean we must plan for a very difficult Brexit process and the high possibility of a divisive outcome," Kelly said.

The report proposes that state aid support should be targeted across three distinct areas.

  • Enterprise stabilisation: Short term measures to allow the Irish Government to introduce enterprise stabilisation measures, as happened in 2009 during the economic crisis
  • Investment in competitiveness: Medium term measures to allow the Irish Government to introduce investment aids to support Irish food and drink companies invest in enabling technology, plant renewal and expansion, refinancing, market development and innovation to regain competitiveness following single market fracture
  • Diversification: Trade related  measures, include export financing and export credit guarantees, to support the continued development of international export markets.

According to Kelly, the industry is deeply integrated into the wider economy and its broad geographic footprint means the regions are particularly exposed to any shock to the sector.

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“In the short term, the objective must be to put in place mitigating measures to help companies manage their businesses through on-going currency shifts and during exit negotiations.

“The medium term focus must be on maintaining markets in the UK, developing other markets and ensuring that in the domestic market, companies remain competitive against imports and the threat of cross-border shopping," concluded Mr Kelly.

Online Editors