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The uncertain future of farm payments in Northern Ireland after Brexit is one of the main concerns for farmers and agribusinesses north and south of the border, with potential knock-on effects throughout the industry.
“It’s going to be another pressure on farmers,” beef farmer and contractor David Murphy told the Irish Farmers Journal in Killeavy, Co Armagh. He feared that a rift would develop in prices and payments between Northern Ireland and the Republic. This would affect both his farm and his contracting business, which has 75% of its customers in the North.
Across the border at the Station Road Mart in Cootehill, Co Cavan, another farmer said: “We are anxious that if payments are cut for Northern Ireland farmers, it will affect cattle sales here.”
Manager Jimmy Reilly said that some effect was already being felt on the number of animals processed through the mart’s export clearing service – though not on the mart’s own sales.
In October 2015, we had 70 to 80 cattle every Thursday. Last October, it was 80 a month
For the past two years, the mart has offered a weekly opportunity for any sellers sending cattle north to bring them along with those sold at the mart and have them checked and approved for export.
“In October 2015, we had 70 to 80 cattle every Thursday. Last October, it was 80 a month,” Jimmy said. The falling exchange rate had already taken its toll following the shock of the June referendum.
Northern Ireland farm incomes are also the main worry for Sean Reid, chief executive of Cookstown Dairy Services in Ardee, Co Louth. The company has been in distributing Dairymaster milking equipment for 32 years and opened a branch in Northern Ireland in 2010.
‘Return to normality’ under threat
Sean highlighted the reliance of his company on EU membership.
“Under the last CAP, 50% of our business was in Northern Ireland,” he said. This came to a virtual stop in 2016, when milk prices collapsed and Northern farmers waited for the new capital grant schemes to start.
“Since November or December 2016, we have seen a return to normality in Northern Ireland – but that’s EU funded,” he said. “Are British farmers going to be well looked after by the UK when they’re such a small proportion of the population and only 1.5% to 2% of the economy?”
It was like El Paso
Sean sees more risk in this than in the restoration of the strict border controls he had to go through when Cookstown Dairy Services started to trade with the North in the late 1980s.
While the British army blocked secondary roads with concrete blocks in the context of the Troubles at the time – “It was like El Paso” – he does not see this happening again.
“With the number of road crossings I’m familiar with, it would be impossible to man them,” he said. “We don’t think there will be a hard border.”
Sterling fluctuation
As for exchange rate swings, Sean is well used to them.
“In the past 25 years, we’ve dealt with currency fluctuations of huge proportions,” he said. Cookstown Dairy Services books sterling conversions with the bank for up to 12 months in advance to cover its orders in Northern Ireland.
On the day of the Brexit referendum, the company was offered an option to cancel such contracts on the assumption that a remain result would deliver a better exchange rate the next morning.
“I didn’t. We would have lost €60,000,” Sean said. “I’m not a gambler.”
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