No-deal Brexit: 'It’s reckless. You are playing with farmer incomes'
‘We can’t afford to wait and see what happens – we have businesses to run’
Beef farmer Angus Woods on his farm in Co Wicklow: “We have this huge market right on our doorstep . . . we have been supplying if for hundreds of years and now we could end up with a scenario that we might not have free access into that market.” Photograph Nick Bradshaw for The Irish Times
In the pasture lands of Co Wicklow, the Woods farm has passed down through three generations. It is, says its owner Angus Woods, a typical family operation, producing cattle and lambs that will end up, via processors and exporters, on supermarket shelves.
Today, however, this once straightforward passage faces an existential threat. Like so many Irish farms, the Woods’s business has adapted itself to meet the exacting demands of British retailers. For these farmers, Brexit is not just about losing a market, it is about tearing up the blueprint of Irish agriculture.
“She has great enthusiasm for the farm,” Angus says of his 10-year-old daughter Evie who might one day hope to take over. “[But] it’s vitally important that the current crop of farmers can make a decent living if we want to encourage the next generation.”
The looming spectre of “no-deal” Brexit, coupled with the demands of global warming and carbon reduction targets, has cast a long shadow over Ireland’s agricultural community and tradition.
“We can’t afford to wait and see [what happens]; we have businesses to run,” says Woods of the uncertainty emanating from London.
Last week, Irish and British farming organisations gathered nervously in the UK capital as its politicians prepared to overwhelmingly reject Theresa May’s moribund exit proposal.
The organisations ruminated on the prospect of a “crash-out” – Irish farmers stand to lose a vital market while their British counterparts face the dual threat of vanishing European customers and the importation of cheaper, lower quality food at home.
The day after their meeting, Irish Farmers Association (IFA) president Joe Healy met EU Agriculture Commissioner Phil Hogan to push for reassurances on what Europe would do for Irish farmers in a worst-case scenario. Afterwards, the IFA said Mr Hogan “was clear” the commission was ready to support them. He said measures to address market disturbance were available, including intervention.
Whatever that might mean in real terms, there is growing unease at the perceived lack of attention at a political level. Mr Woods, who is also the IFA’s national livestock chairman, wastes no time setting out their stall: “The Government response to it so far has been inadequate. The UK is our biggest market: 298,000 tonnes of beef went in 2018; 250,000 into the rest of Europe and 25,000 outside of Europe.
“We have this huge market right on our doorstep . . . we have been supplying if for hundreds of years and now we could end up with a scenario that we might not have free access into that market.”
Like many Irish farmers, Mr Woods produces steers to suit the tastes of British customers, as opposed to the bulls more commonly consumed in Europe.
“Waiting until April [for the Government to respond to a potential no deal] is completely unacceptable. It’s reckless. You are playing with farmers’ incomes and livelihoods here,” he says. “To go and look for some kind of assistance [from Europe] takes time.”
Cattle production is a two-year cycle which cannot be easily changed overnight, he says, while “markets outside of Europe are not sitting there waiting to take that volume of beef.”
In a no-deal scenario Irish farmers and food producers face potentially crippling tariffs. Alternatively, if the UK opts for zero-tariff entry to its market, they would be competing with cheaper, potentially lower grade produce.
Last year, €4.5 billion worth of food exports from Ireland – 37 per cent of the total – went to the UK, a rise of 2 per cent on the previous year, illustrating the umbilical relationship even in what may be the last days of its current existence. More than half of Irish cheese exports, mostly cheddar, goes there. Virtually all mushroom production.
What would happen if everything changed overnight? “It’s absolutely not clear,” says the IFA’s Joe Healy. “Even the UK politicians that we spoke to [last week]; I put that question to them and they looked at me with a blank face. One guy in particular said ‘let’s just hope we don’t get to that’.”
The ripple effects would be far-reaching. Michael Wallace, professor of agriculture and food economics at University College Dublin (UCD), said a collapse in beef prices, for example, caused by a rapid change to market access and an ensuing backlog of unsold cattle would likely set off a chain reaction shaking the foundations of the rural economy.
“The implications would be very serious,” he says, explaining how potential job losses would feed into a decline in local spending. Doctoral research at Trinity College Dublin found that for every €1 change in beef prices at farm level, there would be a €1.50 hit to the local economy.
If the UK fell into a World Trade Organisation (WTO) scenario, it would have to apply tariffs. The assumption is they would initially select existing EU standards which, according to Mr Wallace, would mean about 60 per cent on Irish beef and 50 per cent on dairy.
In such a scenario, 100 kilograms of wholesale chilled boneless beef – the primary Irish beef export – costing €560, would see an “ad valorem” duty of 12.8 per cent as well as a flat rate tariff of €303, inflating the price, overnight, to €935.
“It would potentially decimate the beef price,” Mr Wallace said. “Farm gate” value could plummet by 40 per cent.
Then there are “non-tariff barriers” – additional costs arising when frictionless trade disappears. According to Mr Wallace, a recent Red Flag Consulting report for the European Livestock and Meat Traders Union found the cost of veterinary checks would be about €635 on a standard consignment of meat products.
Farmers in Northern Ireland could encounter more damaging consequences given the makeup of its sector.
Dr Viviane Gravey of Queen’s University Belfast, co-chair of the Brexit and Environment Academic Research Body, explains that four out of five farms in Northern Ireland are considered small. Most are of an older demographic, meaning finances and an ability to invest and adapt is not always there.
“We are not talking about 5 or 10 per cent tariffs that businesses doing well would be able to absorb. They are huge and would most likely cripple businesses,” she says.
In 2016, 35 per cent of Northern Ireland lamb was processed in the Republic. Pigs move in the other direction. Milk can cross the Border as many as five times during its processing life. How often tariffs would be applied in such cases is unclear.
“It’s an all-Ireland agri-food economy,” Dr Gravey says.
There is also the matter of direct payments under the European Common Agricultural Policy (Cap) and what might replace them for Northern Ireland farmers.
“Of course there is no government in Northern Ireland and so Northern Ireland doesn’t have much of a voice at the moment,” notes Dr Gravey of a world in which UK policy would have to be dramatically recast.
“The very thought of any restrictions on the Border from a farming point of view wouldn’t work,” he says. “We believe if there was no deal it would be devastating for Northern Ireland farmers, financially devastating.”