More than half of food and agri-business unprepared for Brexit
Optimism falls to three-year low as sector battles Covid-19
From left: David Leydon, Ifac Head of Food & Agribusiness and Minister for Agriculture, Charlie McConalogue
Six in 10 small and medium food and agri-businesses tapped one or more Covid-19 supports as they battled to survive the economic shutdown designed to halt the spread of the virus, a new report has found.
And more than half remain unprepared for Brexit, according to the study, even though the sector is expected to be hardest hit in the event of a hard Brexit, a scenario that looks increasingly likely.
The report published by Ifac, Ireland’s farming, food and agribusiness professional services firm, found that optimism in the sector has dropped significantly over the course of the pandemic.
Only 55 per cent of business leaders in the sector are optimistic about the future, compared to 74 per cent in 2018. The research was conducted by Amárach Research during June and July 2020.
As the deadline looms for Britain’s departure from the European Union, almost one in five respondents said they were not prepared at all. Smaller businesses appear to be least prepared, the report shows, with larger companies better able to allocate resources to the issue.
Among Covid-19 supports, the temporary wage subsidy scheme had been accessed by 39 per cent of businesses in the sector, the report says. That scheme has been replaced since the start of September with a new, less generous subsidy.
Companies have also turned to new tools to continue growing their businesses. This included a significant increases in selling via online channels.
The report notes a 54 per cent increase in the number of food and agribusinesses trading online, with 37 per cent of SMEs now trading online. The increase was more prevalent among the food companies, with 46 per cent of companies trading online versus 29 per cent previously. Among agribusinesses, online selling increased from 17 per cent to 25 per cent of the sector.
“Covid-19 and Brexit have created an exceptionally challenging environment for our Irish food and agribusiness entrepreneurs,” said David Leydon, head of food and agribusiness at Ifac.
“Yet despite all the challenges, the agility and adaptability of Irish food and agribusiness SMEs have been clear in the recent period with many pivoting to build their digital capacity and trade online. Embracing digitalisation has become a must-do at this stage; it now impacts every part of businesses, not just front-end online trading but also all associated processes.”
On the upside, nine out of 10 businesses said they expect to have the same number of staff or even increase their workforce in the coming year.