Temporary no-deal Brexit raises prospect of further volatility, farmers say

The prospect of a temporary no-deal Brexit in which a potential agreement cannot be ratified before January 1st raises the prospect of further volatility, according to farmers' organisations.

Farmers have also rejected the prospect of flying cattle and sheep to markets in Europe, citing the expense and that such a move would “leave farmers with nothing, or a bill”.

Eddie Punch, general secretary of the Irish Cattle and Sheep Farmers’ Association (ICSA), told the Oireachtas committee on agriculture that even if a Brexit deal was brought “across the line” it might be too late at this stage to have it in place for January, leading to a temporary period of World Trade Organisation rules.

He said the position could lead to further “unknown unknowns” .

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The issue he said was complex, with several negatives at play including the uncertainty causing weakness in sterling.

The further potential weakening of Sterling in the days ahead was another unknown. He said even as meat buyers in Britain and Northern Ireland stockpiled, amid fears of a no-deal Brexit, the exchange rate for sterling earnings was down because of the uncertainty.

Nobody knows where that stockpiling would leave farmers in January, he said.

Mr Punch said another unknown is the impact of a no-deal on consumers in the UK. He said apart from any tariff, there is the potential that they would buy less beef, so reducing the market. “It is hard to forecast, it is not just tariffs,” he said.

Mr Punch said sourcing other markets was possible and should be investigated. But he added that new markets tended to take tens of tonnes of beef, whereas the British market in 2019 was for 260,000 tonnes of beef.

Mr Punch said farmers are disappointed with the lack of progress by the meat industry in creating premium products from suckler beef. He also said the Comprehensive Economic and Trade Agreement between Canada and the EU, as well as the Mercosur deal between the EU and Argentina, Brazil, Paraguay and Uruguay, would be bad for farmers here.

Brexit emergency fund

He said the beef industry appears to have been sacrificed for other advantages in the overall trade deal.

John Enright, general secretary of the Irish Creamery Milk Suppliers Association, said Irish farmers must receive compensation under a €5 billion EU Brexit emergency fund. He said there is “support for others further up the supply chain”, but in the case of losses “we take the hit”.

Joe Connolly, chief executive of animal feeds supplier Red Mills, said World Trade Organisation rules would lead to the imposition of 10 per cent duty on horse feeds and potentially 32 per cent on pet foods. He said the business had built up a month’s supply in warehousing in the UK where it also had staff, but the business has serious concerns about the future of the UK market.

Tara McCarthy, chief executive of Bord Bia, said the organisation is working hard to develop business for Irish products in new markets. Since 2009 it has also had the responsibility for seafood promotion in domestic and international markets.

Ms McCarthy told Roscommon TD Michael Fitzmaurice that meat industry businesses in Ireland are free to attend trade shows worldwide and promote meat from anywhere on the globe.

Committee chairman Jackie Cahill said the hearings are taking place at a strategically crucial time. As we heard last week, “significant challenges and opportunities exist for our food producers and with much uncertainty regarding the type of Brexit to come after December 31st”.

On Thursday the committee will address Brexit and its impact on fisheries.