Farm Ireland

Wednesday 21 February 2018

UK's Brexit 'divorce' bill can plug CAP deficit

IFA pushes its wish list ahead of Britain's EU exit

Photo: PA
Photo: PA
Conan Condon, Alltech In Touch; Aileen Barron, Green Acre Marketing, and Rob O Keeffe Glanbia pictured at last week's Agricultural Science Association Brexit forum in Kilkenny. Photo Roger Jones

The UK's Brexit 'divorce' fine should go towards the "€3bn black hole" Brexit will leave in the next CAP budget, the IFA president has said.

Now that British Prime Minister Theresa May has officially pulled the trigger on Britain's withdrawal from the EU, Joe Healy said the organisation's short-term contingency plan is to secure "state aid flexibility" and "market disturbance supports" for primary producers in the weeks ahead.

Ensuring that CAP is fully funded despite the UK's departure is also top of the IFA agenda. "No one is an expert on Brexit because no one knows what is going to happen, but there are contingency measures that need to be in place," said Mr Healy at last week's Agricultural Science Association (ASA) Brexit forum in Kilkenny.

"Mushroom growers are finding it very difficult to get flexibility with lending institutions, so the first thing we need is that banks and the Government allow for flexibility.

"EU rules for state aid allows that aid be given where there is market disturbance and Brexit is definitely a market disturbance issue. We already lost a handful of good large mushroom growers and we need to learn from that as we face the coming weeks," added Mr Healy.

Last week, European Commission President Jean-Claude Juncker warned that the UK will need to pay up to £50bn (€58bn) as it moves to leave the EU.

The divorce bill is expected to cover outstanding payments owed for items such as pension liabilities and a settlement for the UK's part of multi-year expenditure the EU has committed to countries across the world - including CAP. "The best aid for Irish farmers is a fully funded CAP. Brexit will take €3bn, about 6pc, out of CAP and I think it's realistic to get some of the divorce money to go into the EU budget which funds CAP," Mr Healy said.

"The UK feel that they don't owe any money, but there is an argument that they owe a very real fee for departure," he said.

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The urgent need for Ireland to decide on key priorities on Brexit was stressed by panellists John Moloney, chairman FoodWise 2025, former TD and EU special advisor on Brexit Lucinda Creighton and economist Jim Power.

"We would prefer to see more definite pointers. Our politicians know how serious Brexit is for the agri-food sector but I think that the triggering of Article 50 will create a better focus to get the least possible disruption to trade," Mr Healy said.

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