Cantillon: Uncertain outlook for Ireland’s beef industry

News last week that Ireland had ruffled Chinese feathers and potentially jeopardised a multi-million euro beef deal by supporting a UN motion criticising Beijing's human rights record sent zero shockwaves through the industry here.

This is because attention is firmly focused on trade talks between the EU and Mercosur, the regional bloc that includes beef-exporting giants Brazil, Argentina and Uruguay. After more than a decade of on-off negotiations, a deal now looks imminent, with the formal exchange of offers expected next month.

As one senior industry source put it, China is "1,000 times less important" than the EU-Mercosur deal. He even went so far as to suggest the Chinese story had helped to divert attention away from the deal and its potentially damaging implications for Ireland.

Farming lobby groups, including the Irish Farmers’ Association, are convinced the beef industry is being hung out to dry for the benefit of other sectors.

Specifically, they fear a reduction in tariffs will lead to a flood of ultra-cheap beef imports from South America, potentially lowering prices and eroding Ireland's market share.

Given that about 90 per cent of our beef exports , worth about €2 billion, go to Europe, Ireland has a unique exposure to Mercosur. Minister for Agriculture Simon Coveney had been trying to drum up support for Ireland's cause among his counterparts in Europe ahead of Monday's Farm Council talks in Luxembourg. So, while the reopening of beef markets in China and the US is important, it pales in significance when put alongside the potential impact of affording Brazil and Argentina free rein in Europe.

Similarly, an EU-US trade deal, under the umbrella of the Transatlantic Trade and Investment Partnership (TTIP), is also likely to afford US beef exporters more preferential access to Europe, another potential threat to the industry here.

With farmers already struggling to cope with price volatility and the Russian import ban, the outlook for Ireland’s beef industry is uncertain.