Farm Ireland

Saturday 23 March 2019

Trade wars - dairy next in the Brexit firing line

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Louise Hogan and Philip Ryan

Fears are mounting that Ireland's lucrative cross-Border dairy trade is next in the firing line under a no-deal Brexit scenario.

The multi-billion-euro agri-industry has warned the "stakes are very high" in the case of a hard Brexit, with potential tariffs or quotas.

The Irish beef industry is facing a massive threat as it emerged the British plan to use quotas to allow in cheaper meat from Brazil without tariffs. But the dairy sector estimates that for just cheddar alone, the tariff threat is about €155m, and about €400m on overall exports to the UK.

It comes as the Government pledged to support the agri-food sector and beef processors while farmers fear low-price sellers such as Brazil or New Zealand will move into the vital UK market.

Conor Mulvihill, from Dairy Industry Ireland, warned: "With less than 900 hours remaining to the proposed Brexit day, it is vital a resolution is reached and a strong backstop protecting dairy trade and regulations on the island of Ireland is maintained."

The Department of Agriculture has estimated the cost of potential tariffs for the sector as a whole is €1.7bn, based on Irish agri-food exports to the UK of €4.8bn in 2016.

UK Environment Secretary Michael Gove this week warned of onerous tariffs on produce flowing in to the UK to protect British farmers. However, in addition it is understood there would be 'tariff rate quotas' that could potentially mean low-cost producers such as meat giant Brazil would gain a foothold in the valuable UK market.

Tánaiste Simon Coveney pledged the EU Commission will bail out Ireland's beef industry if a no-deal Brexit sparks an agri-food trade war.

Mr Coveney said the commission had "made it very clear" that it would "support and protect" the vulnerable Irish agriculture industry if Britain crashes out of the EU without a trade deal. The Tánaiste was responding to questions in the Dáil from Fianna Fáil deputy leader Dara Calleary, who raised the threat to the beef industry and said beef farmers already feeling the impact of Brexit are "hugely angry" over the Government's "inaction".

He accused the Government of taking a "it will be alright on the night" approach to Brexit.

There are also widespread concerns over the impact of the cross-Border trade that sees milk, sheep, cattle and pigs travel from the North for processing on a daily basis.

Mr Mulvihill said the UK government needs to appreciate the severe economic, social and environmental damage on the island of Ireland as a whole from the implication of tariffs.

Separately, EU Commissioner Phil Hogan has said that a swift agreement on the EU's budget post-2020 is essential to ensure continuity in farm payments. Agriculture MEPs announced that they will only vote on the legislation for the next Common Agricultural Policy in April, so the next European Parliament will have the final say.

Under plans for the EU's budget for 2021-2027, farmers would receive around €232bn in direct support, a drop of more than €30bn from the current seven-year budget.

Irish Independent