No-deal Brexit implications relatively benign for tillage

The average net profit margin on specialist tillage farms could increase by more than 10% per hectare, compared to current levels, in a no-deal Brexit, by the year 2026.

That was the conclusion of the most recent farm level analysis carried out by Teagasc economists, which was reported at the recent Teagasc National Tillage Conference.

The analysis assumed the UK imposes no-deal tariffs equivalent to the EU tariff schedule, and the EU treats the UK as a non-EU country, and applies tariffs on imports into the EU that originate in the UK.

The likely implications for Irish tillage farms are relatively benign, compared to the other main sectors of Irish agriculture, farmers were told.

Ireland is a net importer of cereals, a large proportion of which come from the UK.

It is assumed that after a no-deal Brexit, Irish importers would switch to cereals from other EU markets. These imports are more expensive, hence the farm gate price of Irish-grown cereal would rise.

It would become necessary to source crop inputs from beyond the UK, but it is expected Irish tillage farms would still come out ahead, in terms of profit margin.

However, the possible impacts of exchange rate movements, CAP support payments after 2020, structural change and wider economy inflationary factors, would all need to be considered also.