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The need for the UK government to change its approach to tariffs in the event of a no-deal Brexit is now the key lobbying focus for senior leaders within the NI agri-food industry.
The Irish Farmers Journal understands that a document was put to Cabinet Minister Michael Gove on his recent visit to NI that questioned some of the calculations done by the British government, and outlined why the UK should adopt the same tariff schedule as the EU. It is understood that Gove agreed to look at the issue, and that political lobbying has also been intensified at Westminster, right the way up to the Prime Minister Boris Johnson.
According to industry sources, the original plan set out by the UK government would effectively sell the NI agri-food industry ‘down the river’, and would leave the UK with a weak negotiating hand when trying to secure any new trade agreements.
The original plan, published in March, would see the UK implement tariffs across agricultural goods that are effectively about half that of the EU. However, there is also a tariff-free quota of 230,000t for beef and 245,000t for poultry that could be accessed by any country, and a commitment from the UK that goods from the Republic of Ireland could cross into NI (and on to Britain) without any checks or tariffs.
According to the Ulster Farmers’ Union (UFU), the UK tariff plan would be “disastrous” for NI farming. It is only designed to be temporary (lasting for 12 months), but as one source pointed out, “income tax was initially meant to be temporary”.
Instead, the UFU has argued that the UK should adopt the same tariff schedule as the EU on food imports.
To get an idea of how that would impact on producer prices, it is worth re-visiting the report produced by economists at the Agri-Food and Biosciences Institute (AFBI) in 2017. It highlighted the devastating impact that liberal trade (where product is allowed in tariff-free) would have on prices of beef (down 45%) and lamb (down 29%), with other sectors such as milk, pigs and poultry seeing prices drop by around 10%.
However, if the UK was to adopt the same tariffs as the EU, prices to UK farmers would potentially go up, particularly for beef (+17%), pigs (+18%), poultry (+15%) and milk (+30%).
The only sector taking a hit would be sheep, given the heavy reliance of the sector on EU exports during peak supply months.
Higher prices for farmers mean higher prices for consumers, something the British government is keen to avoid. However, any gaps in the market could be managed using tariff-rate quotas (allowing some produce in with low or zero tariffs), argues the UFU.
Ultimately, however, the union is still very clear that the best scenario for all farmers is that the UK exits the EU with a deal.
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