Hard Brexit ‘catastrophic’ for Republic, Varadkar warns

A hard Brexit would be "catastrophic" for the Republic, with the Irish agrifood sector uniquely exposed, Taoiseach Leo Varadkar told the annual general meeting of the Irish Farmers' Association (IFA) on Tuesday.

Mr Varadkar told the meeting, which took place in Dublin, that the “future of Ireland” as well as “our peace and prosperity” were at stake in divorce talks between the European Union and the UK. “Everyone in this room is aware of the long-term, structural and disruptive changes that could happen as a result of Brexit.”

He said the agrifood sector was uniquely exposed. Some industries were significantly more exposed, such as beef.

“Even in the absence of tariffs, barriers such as sanitary and customs controls, transport logistics and shelf life are much more significant barriers for food than for other exports.

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“That is why we negotiated so long and so hard in the weeks before Christmas. At stake is the future of Ireland, our peace and prosperity. In a hard Brexit scenario food exports could face very high tariffs. That would be catastrophic and must be avoided.”

Mr Varadkar also described negotiations between the EU and South American trading bloc Mercosur as a “significant threat” to the Irish and European beef sector. He said he would work to ensure the Republic’s “sensitivities are well understood”.

Minister for Agriculture Michael Creed told the meeting there were “reasonable grounds for optimism” in relation to Brexit. “The next phase will be of huge concern to us. Our ask, unapologetically, is that we would continue to have tariff-free access to the UK, that we be protected from any deals the UK does with third countries, as well as maintaining regulatory alignment.

“We will work to ensure we enjoy as close as possible a trading agreement but we don’t control all the levers.”

Third countries

Earlier, IFA president Joe Healy said a post-Brexit scenario whereby the UK government “can do as they please” as regards agricultural trade with third countries could not be countenanced.

“If the UK wants continued access to the EU market, the EU must insist that the UK will not be free to open their markets to low standard or low-value products from outside the EU.”

In terms of retailers, Mr Healy said it was “clear that farmers are not getting a fair share” of the retail price. “The figures don’t lie. The retailer takes 51 per cent of the final price, the processor gets 28 per cent, but the farmer only gets 21 per cent.

“Retailers are the modern-day dictators abusing their power to accumulate vast profits. The more-established retailers have been joined recently by Iceland, who seem hell bent on putting every Irish fresh-food producer out of business with reckless and unsustainable discounting on fresh food.”

On climate change, Mr Healy said it was “incredibly frustrating” to hear so much emphasis on the issues involved.

“What is incredibly frustrating for farmers is to hear so much emphasis on climate issues by key European politicians, while at the same time they are proposing to give Mercosur countries, including Brazil, more access to the European market.

“Producing a kilo of beef in Brazil leaves four times the carbon footprint of a kilo of beef produced in Ireland. Therefore, cutting our beef output to allow Brazil increase theirs is reckless and makes no sense.”

Annual report

The IFA also published its annual report, which shows the organisation’s income to the year ended March 31st, 2017, dropped from almost €19 million in 2016 to €16.2 million last year. Expenditure was also reduced, dropping from €18 million to €17.7 million.

The organisation finished the year with an operating deficit of just over €1.4 million compared with an operating surplus of just over €960,000 the year before.

In terms of pay to key members of staff, Mr Healy’s remuneration was €111,846, which was up from €98,333 the year before. The average remuneration for the top 15 staff after executive management was down marginally on the year before to €103,823.