Johnson's Brexit proposals are of little use to farmers

The latest initiative by UK Prime Minister Boris Johnson to have a single market on the island of Ireland would address one of the problems for trade on the island of Ireland after Brexit.

However, to maintain the status quo, it would be necessary for both to remain part of the same customs arrangements as well, but that doesn’t appear to be part of the latest UK proposals.

Proposals to keep Northern Ireland in the same regulatory arrangement as the EU would remove the need for sanitary and phytosanitary (SPS) controls for trading agricultural produce on the island of Ireland.

If time-limited, any departure by Northern Ireland would mean a reversion to WTO rules, as the Irish border would be responsible for checks on behalf of the EU27.

Standards and customs alignment both required

Without customs alignment, remaining part of the single market on the island of Ireland for standards would solve half of the problem for farmers.

However, the other half is tariffs and if Northern Ireland and the rest of the UK leave the EU customs union, it means WTO tariffs being applied to produce traded across the Irish border.

These tariffs are prohibitive – they are in the region of 40%. In an industry that makes 3% margin, you don’t have to be an economist to work it out

If the UK leaves the EU customs union and carries on with creating a 230,000t tariff-free quota for beef, it will devalue the beef market in particular for farmers across the island of Ireland and Britain as well.

What this means

If this proposal was to go ahead, then it would mean all the problems of a no-deal Brexit would still be in place for farmers.

Northern Irish farmers and food businesses may not require health certification, but the reality is that the tariff barrier would make trade impossible anyway.

Industry view

Two senior leaders in the Northern Irish processing industry have highlighted this recently. As reported by the Irish Farmers Journal, Dale Farm CEO Nick Whelan warned that: “Fifty-three percent of the milk produced in NI would, in a no-deal scenario, be subject to an EU tariff.

“These tariffs are prohibitive – they are in the region of 40%. In an industry that makes 3% margin, you don’t have to be an economist to work it out,” he warned.

This week, Trevor Lockhart of the Fane Valley Co-op, which, along with ABP, owns Linden Foods, also highlighted concerns about the latest proposals in an interview with the BBC.

He said that Brexit uncertainty is losing them business and has already cost £5m.

He queried how “business in NI is supposed to build customer relationship, invest, borrow money on the back of that level of uncertainty,” and as for the latest proposal, he said it “might get us closer to a political solution but it is a step backward" for Northern Ireland businesses.

Proposal same as no-deal for farmers

Irrespective of issues on the island of Ireland, an even bigger problem is what would happen to the value of the British market if there was no deal and the UK followed through with its tariff proposals presented last March.

Most worrying in these is the idea of a 230,000t beef quota at zero tariffs open to all WTO members.

This would devalue the British market for Irish and UK farmers alike.

The bottom line of this week’s Brexit developments is that irrespective of how they are received in Brussels, they have effectively the same effect as a no-deal Brexit for farmers.

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