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The economic unit within Teagasc is forecasting doom and gloom for many of the agri sectors in light of the Brexit challenge.
Members of the economic unit have been discussing options with Teagasc specialists over the last week and one of the favoured forecast scenarios is a 10% cut in all Basic Payment Scheme payments as well as a 20% drop in commodity prices.
Meanwhile, Minister for Agriculture Michael Creed said last week that he expects heads to cool in Europe by the time separation talks between the UK and the EU begin in earnest.
Timelines
“What is going to happen immediately? They trigger article 50, there are French elections, there are Dutch elections, there are German elections. I don’t expect that there will be serious engagement until the back end of 2017,” he told the all-island dialogue on Brexit and agriculture in Gormanston, Co Meath.
While he expects an “acceleration to finalise the divorce” after that, he does not expect the terms of the new trading relationship to be set immediately.
By that time, the minister expects the mood will have mellowed between UK and EU leaders – with his office already lobbying British and European officials on the plight of the Irish agri-food sector.
“If we’re predicated in our negotiations on damage and punishment for the UK, we also inflict damage on ourselves,” he said. “I can’t see how it benefits anybody to be motivated by revenge.
“I think once time passes and we negotiate a trade deal, it will be like we’re negotiating with any other third country in terms of a trading relationship,” he added, admitting that his assessment might be “wildly optimistic”.
Listen to an interview with the Department of Agriculture's head of EU and international trade on preparations for Brexit in our podcast below:
Listen to "How the Department of Agriculture tackles Brexit" on Spreaker.
Case in point
The case of Northern Ireland-based timber products manufacturer Balcas illustrates the upcoming headaches facing the sector if borders are erected between the UK and the EU, including Ireland.
“We take timber from both the Republic of Ireland and the North of Ireland, and indeed the very west coast of Scotland, and process it primarily in our sawmill in Enniskillen,” Belcas chief executive Brian Murphy told the Irish Farmers Journal. Listen to his interview in our podcast below:
Listen to "Balcas boss Brian Murphy on Brexit" on Spreaker.
“It’s very important that we can move freely between north and south, and our biggest concern with Brexit is that we are not inhibited in being able to work efficiently,” he added.
Northern Ireland
While the future of direct payment support to farmers in NI is in doubt after Brexit, for those farmers remaining within the EU, significant change is also likely.
Speaking at the third supply chain forum at Greenmount last week, ex-Dale Farm chief Dr David Dobbin questioned whether direct payments to European farmers will last much beyond 2020.
Dobbin has a strong insight into the thinking within the European Commission, having recently been part of a 12-member agri-markets taskforce set up by European Commissioner for Agriculture Phil Hogan to look at farmers’ position in the supply chain.
He believes there is a new direction of travel for agricultural policy in Europe. “The remaining EU 27 are under more budget pressure due to enlargement.
“Countries that joined in recent years didn’t come with big dowries. If we had stayed in, the next CAP reform would have reduced significantly direct payments. Europe is now heading back towards a capability investment,” Dobbin claimed.
For him, that means the Commission will seek to improve market transparency, regulate for unfair trading practices, look to reduce price volatility and put measures in place to stabilise farm incomes.
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