The negotiations around the UK leaving the EU are intensifying following the official trigger of Article 50 last month. The guidelines for the EU negotiators will be finalised at a meeting of the heads of the EU Council on 29 April.

Barring a monumental change, the UK will no longer be a member of the EU by the 29 March 2019.

Why Brexit matters for agriculture

In the 10 months since the Brexit vote, there has been a huge amount of analysis on the potential implications for the Irish economy, and for the farming and food sector, upon the UK leaving the EU.

The results are fairly straightforward. Ireland’s economy will be the most affected in the EU by Brexit, and farming and agri-food will be the most affected sector.

So why are we so exposed? Irish farming and the food sector is particularly vulnerable to Brexit for a number of reasons.

  • Ireland’s agri-food sector has a high dependence on the UK market, with 40% of exports destined for the UK market annually. Disruptions to this market, through the imposition of tariff barriers, border checks, certification requirements, or other regulatory changes could all render this trade uneconomic.
  • High EU tariff protection applies to products of major importance to Irish farmers: namely beef, dairy products and lamb. A significant reduction in import tariffs by the UK for other non-EU countries – such as the Mercosur countries of South America – post Brexit, would fundamentally undermine the competitive positioning of Irish and EU products on the UK market and reduce the value of the UK market.
  • The existence of the land border between Ireland and Northern Ireland creates an additional challenge, with the potential to disrupt the highly integrated trade flows in agri-food products and to undermine the strong cooperation that exists on animal health. In the event that the UK leaves the EU’s Custom Union, the effect will be that Ireland’s border with Northern Ireland will become the EU’s external border. This has implications for customs checks and other official controls in the areas of food safety, checks on origin and animal health and welfare.
  • Finally, as a net contributor to the EU budget, the UK exit from the EU creates uncertainty on the size of the CAP budgets post-2020.

    • For virtually every sector in agriculture, potential disruption to the UK market would be seriously damaging. In addition, currency volatility during the negotiations could undermine the viability of farming enterprises.

    Teagasc has estimated that farm incomes could fall by 26% if there is a 10% reduction in the CAP budget and a reduction in UK food prices.

    IFA Brexit policy

    Since the vote, IFA president Joe Healy has led the campaign of engagement with key stakeholders. He has highlighted the very real threats posed to farming livelihoods.

    In the last week alone, he has met with Taoiseach Enda Kenny, with head of the EU negotiating team Michel Barnier, and the British Ambassador to Ireland, Robin Barnett.

    Maintaining UK market access and value

    The retention of tariff-free access to and maintenance of the value of the UK market is a key priority for Irish farming and the food sector. It is not sufficient that tariff-free access to the UK market alone is achieved.

    Along with this, the value of EU agri-food exports cannot be undermined by an increase in low-cost food imports into the UK market, which do not meet the high food safety, animal welfare, health and environmental standards required of EU producers.

    In the beef sector, for example, exports of 270,000t to the UK in 2016 represent almost 10% of the intra-EU beef trade. The potential displacement of these exports on to the EU market, due to a fall in the value of the UK market, could have a destabilising effect on the overall EU beef market.

    The IFA believes the EU must set, as a strategic objective in the Brexit negotiations, the maximisation of the future value of the EU farming and food sector.

    In order to achieve this, the optimum outcome is that the UK remains within the EU’s Customs Union.

    If this outcome is not possible, the EU must seek to negotiate a comprehensive free-trade agreement between the EU and UK, which would include the following specific elements for agriculture and food:

  • Tariff-free trade for agricultural products and food.
  • Maintenance of equivalent standards on food safety, animal health, welfare and the environment.
  • Application of the Common External Tariff for imports to both the EU and UK.

    • A strong CAP budget post-2020

    There cannot be a reduction in the CAP budget post 2020 arising from the UK exit. A reduction in spending power for Irish agriculture, arising from a cut in direct payments to farmers, would have a significant and negative knock-on effect on production decisions and the demand for goods and services in the rural economy.

    Next steps

    Both the EU and UK have stated clearly that they wish to avoid a hard border between the Republic and Northern Ireland. It is critical that minimising the disruption to trade – including maintaining equivalent standards in the areas of food safety, animal health and welfare – are priority issues in these discussions regarding the border.

    Both sides have also given clear indications on the need to minimise uncertainty on the future, although there are differences in emphasis here.

    The UK wishes to agree the terms of the future partnership between the EU and UK alongside agreeing the terms of the UK withdrawal.

    The EU wishes to make progress on agreement on the UK withdrawal, including its budgetary commitments and rights of citizens, before sketching out a framework for the future relationship.

    The IFA has clearly set out for political leaders in Ireland and the EU the critical issues for Irish farming and the food sector in the negotiations, and has identified the outcomes that must be delivered to secure the interests of this vital sector in the years ahead.

    The IFA president will continue to lead the IFA’s engagement with stakeholders in the Oireachtas, Government departments, European Parliament and European Commission on these issues.

    Read more

    Full coverage: Brexit