Farm Ireland
Independent.ie

Thursday 14 December 2017

'EU trade tariffs could sour sale of milk between Northern Ireland and the Republic'

Photo: Roger Jones
Photo: Roger Jones

Rachel Martin

The cross-border sale of milk from Northern Ireland to the Republic could be at risk following Brexit, it has been claimed.

Around a third of all milk produced here makes its way to processors over the border, but according to industry leaders, if the UK leaves the EU without trade agreements in place, the tariffs that would be imposed would render the cross-border milk trade no longer viable, bringing one of the biggest shake-ups to the industry in decades.

Around a quarter of all food and drink produced in the UK is sold within EU countries, including £700m worth of goods that go to the Republic.

But experts have warned it is becoming increasingly likely there will be no trade agreements on agricultural produce when the UK leaves EU.

Declan Billington, chairman of the Northern Ireland Food and Drink Association (NIFSDA), said he had no reason to believe the EU would strike a deal for the sector beforehand.

He indicated it was likely tariffs would lead to a 47% price hike on butter and a 56% rise on beef import and export costs.

Mr Billington also claimed there would be no room for picking and choosing which sectors would enjoy preferential terms.

"We can't cherrypick and say we will do a trade deal on automotive but not on aircraft, for example," he explained.

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The NIFDA chairman added that EU member states would be reluctant to offer a good tariff on agricultural produce as the UK would no longer be paying into the common agricultural policy.

However, he insisted there remained opportunities for food and drink in the home market, but only if the transition was carried out smoothly.

"My personal belief is that Europe will acknowledge the special circumstances of the border here," Mr Billington said.

"It could be possible to implement tariff-free quotas, so that up to a certain volume of goods can be traded without tariffs.

"The quotas would be very small to Europe, but large on a Northern Ireland scale.

"Just over 40% of what we consume in the UK is imported, and we have the opportunity to replace most of that with food produced here.

"If no trade deal is struck, it's unlikely we'll want to continue importing European food. We're not a wine region, but there's massive opportunities for food producers here to fill that gap."

Milk processor LacPatrick, formed following the merger between Ballyrashane and Town of Monaghan, has around 1,100 suppliers, mostly based here.

Chief executive Gabriel D'Arcy said his firm, which has a new £30m processing plant in Artigarvan, Co Tyrone, that can process up to 3.5m litres a day, was preparing for a hard Brexit.

He added: "Given the tone and content of the key protagonists on the British and European sides, it looks like this will be a hard Brexit, with much disruption likely. All producers need to understand where their processors' assets and markets are, as some processors are going to be more disrupted than others.

"LacPatrick is in a comparatively strong position, with our new investment in Artigarvan on target to process milk in March or April.

"Following the completion of the project, Northern Ireland, for the first time in a generation, will be able to process all of its own milk within the province."

Ulster Farmers' Union president Barclay Bell said a "tariff war would serve no-one well".

He added: "EU member states need to trade with the UK, and we are optimistic that they will recognise that during the negotiations.

"After Brexit, regardless of the deal struck on trade, the movement of products and access to labour between Northern Ireland and the Republic will be different. That will bring complications we do not have now."

Lakeland Dairies, the island's third largest milk processor - and the second largest in Northern Ireland - exports products to 78 countries, including several in the EU. Chief executive Michael Hanley said he was confident the co-operative would be able to continue doing so.

Belfast Telegraph