Dairy 'backstop' needed for free movement of milk across Border
A 'dairy backstop' will be required to guarantee continued free movement of milk across the Border post-Brexit.
Dairy processors have sought assurances from the Government that no impediments will be placed on milk imports from Northern Ireland to the South after the UK leaves the EU.
But some industry sources maintained that the retention of an all-island milk market in Ireland would necessitate restrictions on milk movements from Britain to the North.
This would certainly prompt political difficulties, since the DUP has strenuously opposed the imposition of any new Brexit-related barriers to trade between Northern Ireland and Britain.
"If the UK leaves the EU and the customs union then the only way we can continue to have free movement of milk on the island of Ireland is if Northern Irish milk is deemed Irish and complies with EU single market rules," one senior dairy sector executive explained.
"If butter or cheese is to be sold as EU produce, then it has to comply with EU Dairy Hygiene Regulations and all producers will have to have dairy hygiene certificates," he maintained.
"This means Northern Irish producers mirroring EU regulations which is effectively a backstop for the Irish dairy industry," he said.
Critically, sources within the dairy sector said restrictions on the import of milk into the North from non-EU-compliant regions of Britain will be necessary to protect the integrity of the EU single market if free movement of milk within Ireland is to be allowed post-Brexit.
This view was accepted by Conor Mulvihill of Dairy Industry Ireland (DII), but he stressed that this was an issue for customs authorities in Northern Ireland, Britain and the Republic.
However, he said there was an acceptance at European level that Ireland was an "integrated dairy island" and the industry wanted the status quo relating to the movement of milk to be retained.
Mr Mulvihill said if milk produced in Northern Ireland qualified both as Irish and British milk then procedures could be developed which satisfied EU regulatory requirements.
He pointed out that some Halloumi cheese in Cyprus is produced using milk from the northern sector of the island - an area that is outside the EU.
However, the milk volumes involved in this Mediterranean trade are minuscule compared to Ireland, with less than 100m litres produced in total in Northern Cyprus. In contrast, more than 810m litres of milk moves across the Irish Border for processing each year.
Mr Mulvihill said the size of the cross-Border milk trade was reflective of its economic importance both locally and nationally.
He refuted suggestions that Northern Ireland could act as a backdoor into the EU for British milk should an all-island dairy market get the green light from Brussels.
Mr Mulvihill said milk imports from Britain to the Republic of Ireland had fallen to insignificant levels since dairy expansion gathered pace.
The continuing political deadlock at Westminster has heightened fears in the Irish dairy sector of a hard Brexit and a consequent hard border.
Processors warned that restrictions on the flow of milk would reduce plant efficiency and increase costs, while trade tariffs would hit sales in the crucial British market.
Northern Ireland and Britain remain Ireland's most important outlet for dairy produce, taking a quarter of all exports.
Dairy exports to the UK increased by 7pc last year to top €1bn, according to the latest Bord Bia estimates.
This included 117,000 tonnes of cheese valued at €380m - of which 97,000t was cheddar worth €310m. Butter exports to the UK amounted to 44,000t worth €225m, while the market took 48,000t of milk powders valued at €74m.
The continued growth and development of the dairy sector in the wider Border region is dependent on the free movement of milk being retained, local processors maintain.
Processors seek Government guarantee on post-Brexit trading conditions
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