Ray Ryan reports on industry-wide views that a British exit from the EU would have significant negative impacts on Ireland’s agri-food sector.
BREXIT, shorthand for a British exit from the European Union, sounded like a brand name for a new beer at first hearing.
However, it is now being seen by many in Ireland as a condition with serious consequences for the national economy, especially the agricultural sector.
Britain will go to polls on Thursday to decide whether it will leave the EU or remain a member. The implications of a decision to leave are enormous for Ireland and for the agri-food industry in particular.
Agriculture, Food and Marine Minister Michael Creed outlined some of those implications in recent replies to Dáil questions.
He told Fianna Fáil TD Shane Cassels that Central Statistics Office figures show that in 2015 we exported almost €5.1bn worth of agricultural products to Britain while imports from the UK were worth €3.8bn.
He said an ESRI report last year estimated that the potential reduction in bilateral trade flows could be as high as 20%, with an even higher impact on agriculture, food and beverages.
An analysis by Teagasc found that, depending on the assumptions made, the minimum impact could be a reduction of 1.4% or €150m per annum in the value of Irish agri-food exports, with a possible worst-case scenario involving a reduction of over 7%, or €800m, per annum.
Mr Creed said the possibility of a UK exit also poses a serious and complex situation for our fisheries’ sector. While the negative impact on trade could be significant — the UK is our second largest market for seafood after France — the most complex fisheries issues are those related to the possibility of restricted access to fishing grounds and resources.
Mr Creed, replying to Labour Party TD Willie Penrose, said Brexit is an issue of enormous concern and is exercising the minds of the whole government.
“While people ask themselves what they can do without being seen to meddle, there are 140,000 people in the State who are entitled to vote in that referendum, and many of us know people in those communities and should reach out to them.
“When the Mercosur trade agreement didn’t have an initial offer on beef, people breathed a sigh of relief. However, that achievement would pale into insignificance were the UK to leave the EU and be in a position to negotiate bilateral trade agreements with South America,” he said.
Mr Creed said slightly less than 50% of Ireland’s beef exports are on supermarket shelves in Britain. “This encapsulates the scale of the potential crisis we face,” he said.
Irish Farmers Association president Joe Healy said it is hugely important for Ireland that the UK remains within the EU.
Britain represents Ireland’s most important agri-food export market, accounting for over 40% of agricultural exports.
It is the destination for some 50% of our beef, 60% of our cheese, €350m worth of pigmeat exports and almost 100% of our mushroom exports. It is a high-value market, with customers sharing the same language and with similar consumer preferences as Irish customers.
Mr Healy said Irish agriculture would surely suffer negative consequences, in the short-term and the longer term, if Britain votes to leave the EU. With a long history of emigration to Britain, all Irish farm families have members, relatives and friends living in the UK and eligible to vote.
“We are asking farm families and families in rural Ireland and across the country to communicate the concerns and risks that we are highlighting.
“Our appeal is to those voting to take the concerns into account and to vote for the UK to remain within the EU,” he said.
The Irish Creamery Milk Suppliers Association has also warned that a British exit from the EU could be the biggest threat to the Irish economy since 2009.
Livestock Committee chairman Michael Guinan, said in the latest ICMSA newsletter that a substantial part of that threat falls on agriculture and beef exports. Analysts believe the mere threat of Brexit has been enough to precipitate a serious drop in the value of sterling and that a vote to leave would prompt a further significant depreciation, he wrote.
Uncertainty over whether Britain should stay in the EU or leave is already having an impact on land prices and agri-food exports here. That’s according to a market review and outlook for 2016 published by the Society of Chartered Surveyors Ireland and Teagasc.
The report notes the difficulty of measuring the economic impact of Britain leaving the EU, but predicts that in the broad economic sense it is expected to have negative consequences.
Jason Loughrey, Teagasc, one of the report authors, said if Brexit happens the effect on Irish trade and on the Common Agricultural Policy may have a knock-on effect on overall confidence in the land market.
“Ongoing uncertainty in the lead up to the vote is already having a negative effect on agri-food exports due to the depreciation of sterling against the euro.
“It has lost 7p against the euro since the end of 2015. So, Brexit is already having a dampening effect on land prices. If the Leave side wins the situation becomes more complicated, although it will be some time before the consequences crystalise fully,” he said.
Meat Industry Ireland has warned that meat exports to the UK, worth €2bn each year, will lose their competitive position if the UK leaves. Farmers in the North are split on whether remaining part of the EU is in their best interests.
However, Ireland rugby captain and Armagh farmer Rory Best has no doubts. He is urging North voters to keep Britain in the EU.
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