How Brexit could cost farmers as much €3,000 each

Farmers attend the Tullow Sheep Breeders Association 30th Show and Sale. Image: Roger Jones
Farmers attend the Tullow Sheep Breeders Association 30th Show and Sale. Image: Roger Jones
Ciaran Moran

Ciaran Moran

A new analysis by business group IBEC suggests that Brexit could hit farm incomes by as much as €3,000.

It comes as a recent report by InterTradeIreland and the ESRI quantified the expected impact on the food and drink sector of a ‘Hard’ Brexit.

The report showed that in a worst case scenario (with WTO tariffs, non-tariff barriers and 10pc rise in sterling/euro from 2016 levels) exports of food & beverage manufacturing to the UK could fall by 45% or €2.1 billion.

Total food and beverage manufacturing turnover is €27bn, of which €4.6bn comes from UK exports.

As such this ’hard’ Brexit scenario would reduce overall food and beverage manufacturing output in Ireland by around 8pc permanently.

IBEC modelling extending from these findings, suggests a €2.1 billion fall in Irish food and beverage manufacturing exports would translate to a fall of over €415 million in demand for farm output.

Applying this to figures from Teagasc’s National Farm Survey it suggests that the immediate impact on Irish exports to the UK alone would translate to a steep reduction in farm output of around €3,000 per farm annually (across 140,000 farms).

Assuming a proportional fall in variable costs this would result in a net 6.5pc fall in average farm incomes overall and up to a 9.5pc fall in incomes for livestock farms.

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Further potential impacts of Brexit on product displacement, funding on the CAP or domestic consumer demand are not taken into account.

The IBEC analysis also shows that around 243,000 workers, or 13.2pc of the employed population, work in the most Brexit exposed sectors such as agri-food and beverages, tourism, transport and traditional manufacturing.

The counties with the highest exposure to a ‘hard Brexit’ are Cavan (28pc), Monaghan (27pc), Kerry (22pc) and Longford (21pc) with over one in five workers in each of those counties employed in exposed sectors.

Meanwhile exposure is lowest, as expected, in urban areas. The least exposed counties include Cork and Galway cities along with the four Dublin local authorities and their surrounding counties.

Online Editors