EU state aid changes inadequate given what's ahead in the event of a crash out Brexit - IFA

Cheesemaker will be first firm in Europe to get approval for state aid on Brexit

IFA President Joe Healy
IFA President Joe Healy
Business Minister Heather Humphreys. Photo: Steve Humphreys

Kevin Doyle and Gavin McLoughlin

The European Commission's decision to increase the limit on State Aid for farmers from €15,000 to €25,000 is an important first step in what could be facing farmers in the event of a crash out Brexit, according to IFA President Joe Healy but he warned that significantly more funding would be needed in a worst- case scenario.

Healy said in a ‘no deal’ Brexit, State Aid limited to €8,300 per year will not be enough given the losses that farmers have already encountered and will be facing in such a scenario.

The IFA President warned that such is the scale of the losses from a Brexit crash out, the EU Commission will have to be the primary source of funds for a Brexit emergency support package. With the uncertainty around Brexit and the danger of unprecedented losses for farming and the agriculture sector, we cannot put a limit on support at this time.

Joe Healy said the IFA has put proposals to the Government and the EU Commission for a comprehensive package of market supports and direct aid for farmers.

“We need to see much more urgency from the Minister and clarity on the details of exactly what mechanisms will be applied. Aid must go to farmers and not be gobbled up by others in the supply chain.”

The EU move to relaxes stringent state aid rules as Britain threatens the dairy and beef sectors with trade war tariffs and a hard Border is imminent.

In an unprecedented development, the makers of Dubliner cheddar cheese will be the first company in Europe to benefit from approval to get state support to ride out the effects of Brexit, the Irish Independent has learned. It sets a precedent and will be watched closely across the EU.

The Cork-based Carbery Group is understood to have secured EU pre-approval to receive €6m from Enterprise Ireland as part of a larger €65m investment without being seen to breach state aid rules.

The money will fund diversification of the business, including finding alternatives to the UK market.

Almost half of Irish cheddar is exported to the UK.

There is no suggestion Carbery requires a rescue or is in any financial difficulty. However, winning approval to take on Enterprise Ireland investment will help the company shift production into mozzarella.

The cap for grant aids for farms will rise from €15,000 to €25,000 over three years under the new package.

EU state aid rules restrict government investment in companies and are heavily policed by Commissioner Margrethe Vestager, due to the risk of creating an uneven playing field for firms from different member states.

The approval for Carbery is a major coup for Business Minister Heather Humphreys and EU Agriculture Commissioner Phil Hogan.

Owned by four farmers' co-operatives, Carbery has 600 employees, eight plants and is active in 50 countries with sales in 2017 of €417m.

Irish Independent