Farm Ireland

Tuesday 23 April 2019

Louise Hogan: Tariff threat must act as a wake-up call on the wider issues in the beef sector

Louise Hogan

Louise Hogan

Confirmation this week that Tesco will not simply replace Irish beef with cheaper South American product in the unlikely event of a 'no deal' Brexit is welcome news for Irish livestock farmers.

The Tesco announcement will give embattled beef farmers a timely boost.

However, last week's events illustrate once again the beef sector's dangerous dependence on the British market, which is worth €1.15bn in annual sales.

Beef shipments to the UK of almost 250,000t last year equated to 57pc of total exports in terms of tonnage, and 52pc in terms of value.

And while the likelihood of Britain crashing out of the EU without a trade deal has diminished somewhat, the political chaos in Westminster means that a messy exit is still a possibility.

Indeed, should Theresa May's package fail to win a House of Commons majority at the third time of asking this week, there is no guarantee that a subsequent motion seeking an extended Brexit delay would attract sufficient support to pass muster.

Then we'd be in trouble.

It is in this context that last week's tariff proposals and the comments from Tesco are interesting. The UK imports close to 440,000t of beef each year. According to last week's plans, a tariff-free quota of 180,000t will be made available. This equates to 40pc of overall imports.

Also Read

In addition, the tariff rates that will generally apply on the remaining 60pc of imports will be almost halved compared to the levels currently levied on beef shipments into the EU.

Such a tariff policy will make South American beef imports extremely attractive to British consumers since Brazil's beef price of €2.20/kg is 40pc below ours.

Will Tesco's attachment to the Irish beef sector's proven track record on quality, traceability and animal welfare trump the obvious attraction of cheaper South American beef? That is the big question.

With a bit of luck -and some Commons sense (pun intended) - it will not have to be answered in the short-term.

However, at some point in their future free-trading nirvana, the British might open their meat market to all comers. Ireland's beef sector will then have to actually deal with the serious challenges that were flagged last week.

Britain's tariff threat must act as a wake-up call for the wider beef sector, which is already facing unsustainable income pressures at farm level.

The industry must reduce its exposure to the British market - as the dairy sector is currently doing in relation to cheddar.

Waiting for the problem to inevitably re-emerge is not a credible option.

Indo Farming

More in Beef