The extent to which Brexit is going to pose challenges for farmers on both sides of the Irish Sea is becoming clearer. A report released last week by Food and Drink Industry Ireland (FDII) put the value of agri food traded across the Irish Sea at €9bn per annum. Irish trade to the Britain stood at €4.4bn – or 41% of our total food and drink exports – while British imports to Ireland total €3.5bn per annum, with NI-ROI trade accounting for the remainder.
Any disruption to the free flow of goods caused by the UK’s decision to leave the EU single market and customs union will ultimately be detrimental to farmers on both sides of the Irish Sea.
Nevertheless, when addressing the National Sheep Association AGM in Scotland last week, it was clear to me that some farmers welcome the opportunity that Brexit presents – mainly to reach beyond Europe into international markets.
However, there is no doubt that the optimism is tinged with a level of naivety. As Irish food exporters can testify, international markets are not easily won – and often when access has been secured, the end prize is not as big as first envisaged.
The British beef, lamb and dairy market is one of the highest priced food markets in the world. British farmers have unrestricted access to it and have established a premium position in the eyes of consumers. Achieving this outside their domestic market while securing a premium price that compensates for the increased cost of doing business is not going to be a quick or easy process.
In a new post-Brexit era, UK prime minister Theresa May has identified a range of countries – including Australia, New Zealand, Brazil, India and the US – that would be targeted for trade deals. These make up the top beef, sheep and dairy exporting countries of the world, and there are no prizes for guessing what their priorities will be in trade discussions with the UK.
While the UK government has made positive sounds about protecting the future of the farming sector, the British farm organisation will be acutely aware that their sector accounts for just 0.6% of Gross Value Add within the British economy and just over 1% of jobs – compared with over 7% in Ireland. These will be important figures when considering the value politicians place on the sector when around the trade negotiations table.
Brexit presents a very different landscape for British and Irish farmers and one that perhaps requires a new approach to our relationship – one that shifts from being competitors to one where Ireland is viewed by the UK as a strategic food partner.
An understandable level of friction exists either side of the Irish Sea, fuelled on the Irish side by a British Red Tractor logo viewed by farmers as being designed to keep Irish product off the premium retail shelf, and on the British side by a fear of lower priced Irish product depressing the British farmgate price. Both are valid concerns.
Key to advancing towards a more strategic relationship would be the acceptance among British farmers that they would be in a much stronger position if deficits in their domestic market are supplied by Ireland – a country with high production standards and – perhaps more importantly – a similar cost production system.
We have long argued that in the case of beef, where the British market is most exposed to cheap imports, developing a live trade that would allow Irish cattle move on to British feedlots would yield a financial dividend for all concerned.
The challenges of Brexit perhaps provide an opportunity for this level of forward thinking. If we cannot convince politicians to protect the British market from a flood of lower value imports produced to lower standards, then British and Irish farmers should be working together to target the UK consumer.
There is effectively now a two-year window to perfect this unified message, perhaps even under a common British-Irish food brand for the British market.
SHARING OPTIONS: